Local Housing Need Assessment Reform

Kevin Hollinrake Excerpts

Tuesday 13th May 2025 Westminster Hall

[John Milne]

I thank my hon. Friend, who makes a very good point. The system is working almost to the reverse of what was intended.

In my constituency of Horsham many people either work for London businesses or perhaps have traded down from a more expensive London property. From their point of view, Horsham represents excellent value. The official affordability ratio does not reflect real working conditions in Horsham for locals, and therefore overstates local targets.

Local councillors all strive to get the best for their communities, but the way we receive targets under the standard method destroys our negotiating position with developers. Developers are not stupid. They can work out as well as anyone else how many sites are needed to meet our targets. They have no need to concede on civil amenities or on affordable housing because they know that, at the end of the day, they have got the council over a barrel.

I have no issue with a private developer seeking to make a profit—what else do we expect them to do?—but do not rely on them to do social planning. In areas like Horsham, years of free market ideology have turned councils into mere editors of private developer proposals. We build on greenfield sites because they are the only ones that get presented. There is literally nothing else to choose from in Horsham. The free market approach to affordability does not work for the housing market. Competition has driven prices up, not down. In Horsham we would arguably be better off if we granted a monopoly to one single developer and let them push down local land prices.

To add insult to injury, we also have the standard method’s bullying friend, the housing delivery test. I am not sure whether there ever was a carrot in this process, but the HDT is definitely the stick. Failure to meet targets can ultimately result in losing local control over planning altogether. It is a Catch-22 situation: the developer controls the rate of delivery, but the council pays the price if targets slip. Heads they win, tails we lose.

In fact, the single biggest factor that influences prices has nothing to do with house building. It is availability of credit. If interest rates were to double tomorrow, the price of a mortgage would soar and we would see a house price crash, yet all that would happen without a single new home being built. A succession of policies under the Conservatives only served to make the problem worse, not better. Subsidies such as Help to Buy or stamp duty holidays simply inflated prices further, like a giant Ponzi scheme. The market adjusts, and the subsidy ends up in the pockets of developers until the next upward turn in the spiral.

Therefore, any analysis of UK house building must take into account the key role of finance. Since Thatcher, houses have come to be seen not simply as homes but as investments. In line with that, the explosion of the buy-to-let market in the 1990s correlates suspiciously closely with overall house price inflation. Older generations benefited from decades of property asset inflation, but today it is getting harder and harder to board that train. Putting all that together, it is clear that the standard method is getting its social sums all wrong.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate the hon. Gentleman on securing this very important debate. He mentioned some of the incentives for first-time buyers. Through the stamp duty discounts, we saved the typical first-time buyer around £6,000 on their purchase, which helped about 640,000 young people get on to the housing market. Is he saying that he is not interested in that and that it was the wrong thing to do to help those first-time buyers on to the housing ladder?

[John Milne]

For the individuals who benefit, no one can argue with it. It is the same with the sale of a council house—if you are the family that gets it, it has clearly given you a massive uplift. What I am saying is that we have a national societal problem to solve in the housing market in general. We have a certain amount of money to put towards it. That was a subsidy. There are far better things to do with that subsidy that do not inflate prices further, as that simply eats up the subsidy.

As I was saying, putting all that together, it is clear that the standard method is getting its social sums wrong. The affordability ratio is actually a lousy proxy for actual housing need. What we need to do is factor a proper analysis of local housing conditions back into the system. That should include an assessment of local homelessness rates, the need for social housing, pensioner poverty and all the other factors that make communities tick. We also need to find a clear role for neighbourhood plans. Neighbourhood plans started as a great way to bring local consent and local knowledge into housing, but from the day the standard method was introduced, they have been effectively overruled. In the latest planning reforms, they were completely marginalised and were not even mentioned.

How can we change the standard method to do the job it is supposed to do? I suggest at least two inputs: a local needs calculation, which focuses on helping local people into the homes they need, and a national needs top-up. Having a separate national needs figure will help us to focus on the delivery of new towns. When our housing needs are as great as they are, new towns are essential. In contrast, the standard method spreads targets indiscriminately across every area. It leads to endless incremental add-ons to existing settlements until they begin to lose their identity altogether. In rural areas such as mine, the standard method has an inherent tendency to create low-density suburbs. Not only do they tend to be more expensive houses, but they use two or three times as much land as they strictly need to.

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[Yasmin Qureshi (Bolton South and Walkden) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I thank the hon. Member for Horsham (John Milne) for bringing this timely debate for all of us to consider. Before I come to the main thrust of my speech, I should say that it is universally accepted that, irrespective of the Government in power, over the past 20-odd years hardly any housebuilding has happened. The last time there was a proper housebuilding programme in place was in the ’70s, ’60s and ’50s. I am going back in time, but it has not happened in a number of years. It does not matter which political party has been in charge.

[Kevin Hollinrake]

I appreciate the hon. Lady’s giving way. By way of correction, during the period of our last 10 years in office, there was an average of 207,000 net new home additions every year, which was higher than in the 1970s.

[Yasmin Qureshi]

I know, but that is still not a sufficient amount. Some of those houses did not come through. There was an amount of housing that needed to be done and was not done. It was done in the ’50s, ’60s and ’70s, which cannot be denied. We need to build more homes, including more affordable and social homes. This is an important debate because it asks Government and builders to look at how to assess local housing need.

In Bolton, more than 20,000 individuals are on the social housing waiting list. Families face an 18-month wait for a three-bedroom house, with 800 to 900 applicants for each available home. Many are referred to the private sector, where of course the rents are very high, increasing the financial strain on already struggling households.

The current methodology for assessing local housing need fails to capture the realities on the ground. It overlooks income disparities across our country, the availability of affordable housing and the specific needs of our communities. That disconnect results in inadequate housing provision, leaving many without suitable options. There are homes out there that could be used to reduce housing waiting lists, but they need substantial work to bring them up to standard.

In my constituency recently, I hosted a roundtable with housing providers as well as homelessness charities, and one of the things that they asked for was a ringfenced fund to help social housing providers to make their stock fit for purpose, release more housing and give more people the homes that they desperately need. In the private rented sector, what is called affordable housing is often not affordable, because many of my constituents are on the minimum wage or living wage and they are not able to afford homes that people in the south or in other parts of the country might think are reasonably affordable. They are not affordable for those living in Bolton and the surrounding areas, because “affordability” is based on market prices, not what people are earning locally. It is all about the central, national figure, whereas we should be looking at local wages and what is affordable to people there, as opposed to somebody in a more prosperous part of the country. Of course, the current system also allows landlords to charge higher rents and make profits because they are taking advantage of the fact that the need for homes is greater than the availability.

We have to understand that housing is not merely about shelter; it is about dignity, stability and opportunity. It is not a coincidence that often the people we find in the criminal justice system have come from an economically and socially deprived background, and housing is a big part of that. We saw during the covid time that in poorer areas, where many people live in one house, there was a higher rate of covid being spread among them as opposed to people who lived in large houses, where they could properly and safely quarantine themselves. In a lot of the smaller houses where many people were living, they were not able to do so.

There are a lot of reasons why a decent home is important for everyone. What I ask is that we all work collaboratively, and certainly I try hard to ensure that individuals and families in Bolton South and Walkden have access to safe, affordable and appropriate housing. I therefore welcome the Government’s plan to create 1.5 million homes. I wish them luck and hope they will be able to achieve that. It is a welcome—[Interruption.] The hon. Member for Thirsk and Malton may laugh, but at least it is an initiative. It is a great initiative, a great thing to work towards, a great aim to have, because if we do get there, that should hopefully alleviate a lot of the challenges.

I wish the Government great luck on this and hope it will happen. In the meantime, could we have some additional funding, especially for social housing?

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[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to serve with you in the Chair, Mrs Hobhouse. I thank the hon. Member for Horsham (John Milne) and congratulate him on securing this important debate.

I am afraid this is just another example of the two-tier society that this Government are presiding over. We have had two-tier taxes and two-tier justice and now we have two-tier targets. That is the reality, and it militates against the basic British principle of fairness. I will go through the numbers in a second, but Labour’s own council leaders have called the Minister’s targets unrealistic and impossible to achieve. The leader of West Lancashire council used exactly those words: “impossible and unrealistic”. The targets are unachievable.

I am in no way, shape or form a nimby. Unlike 15 of the Minister’s colleagues in the Cabinet, I have never objected to any developments in my constituency as a Member of Parliament or as a member of the public. I am absolutely on the side of young people who want to get on the housing ladder and those on lower incomes seeking affordable homes. The only way to deliver that is to deliver more homes. I am not against the Minister’s 1.5 million target, but it will be very challenging. We should look at the data: over the last 10 years we were in office, average net housing additions were 207,000 a year. That was the highest level for 50 years—even higher than in the 1970s, because we were knocking down an awful lot of houses back then.

The targets have been driven by the change from assessment of housing formations to a measure of stock already delivered in an area, with a multiplier on top for affordability, but they are totally unfair. London has seen an 11% decrease in its target, Leicester a 32% decrease and Birmingham a 38% decrease. Coventry has seen a 55% decrease in its housing target, yet the neighbouring authority of North Warwickshire has had a 123% increase. That is despite the fact that North Warwickshire, like my right hon. Friend the Member for East Hampshire (Damian Hinds) said of his authority, has over-delivered on its housing targets. Nuneaton, another bordering authority that is over-delivering, has had a 75% increase in its housing target compared with Coventry.

I am trying not to be too parochial but in my neck of the woods, York, which has been under-delivering massively against its housing target for years and years, and had not had a local plan since 1956—it has just got one in place, thank God—has seen a 19% increase, yet neighbouring North Yorkshire, which is my local authority, has had a 199% increase, despite significant over-delivery.

Of Members who have spoken in the debate, my right hon. Friend the Member for East Hampshire has had a 100% increase in his area; the hon. Member for Horsham a 48% increase; the hon. Member for St Ives (Andrew George) a 63% increase; the hon. Member for Chichester (Jess Brown-Fuller) a 72% increase; and the hon. Member for Newton Abbot (Martin Wrigley) a 66% increase. I like the Minister and we get on very well, but his authority in Nottingham has had a 32% decrease. How can that be fair? It is against the basic principle of fairness. Yes, there is a 50% increase in delivery across the board, but why have some targets been decreased and others massively increased? That is simply unfair.

Those are not anecdotal cases. Based on information from the House of Commons Library, across the board, mainly rural areas are seeing an average 71% increase and urban areas an average 15.6% increase. On top of that there is the duty to co-operate and strategic planning, which is likely to see even more houses going into rural areas. There is no justification for that unfairness. It also sits against the principle that the Government say they adopt, as we did, of a brownfield-first approach.

Brownfield development is the least controversial approach, and it is what we would all like to see, but it is complex and costly, particularly in a world of increased costs of delivery. Over the past few years, developers have seen a 40% increase in costs of building. On top of that is the building safety levy, the Building Safety Regulator, biodiversity net gain, the future homes standard, section 106, the community infrastructure levy and the remediation of brownfield sites. Those things, and the Government’s policy on grey belt, will mean that more and more development will be pushed from urban areas into greenfield and green belt.

What the Government are doing with the national planning policy framework cannot be divorced from the Planning and Infrastructure Bill and the Trojan horse that they called grey belt. What they sold to the public as being a few former garage forecourts or wasteland is far from that. It is greenfield and green belt. The Minister cannot shake his head. There used to be protections between villages to stop them merging, and they have gone. There used to be protections to stop villages merging into towns, and they have gone. This is not about grey belt; it is a fundamental change to green belt.

Of course, this is not about targets. It would be pointless to have this debate and just talk about targets—we have to talk about delivery. The 1.5 million homes are a huge ask. The reality is that to hit that target for England, for the rest of this Parliament, delivery will need to hit not 207,000 a year, which we averaged, but 375,000 a year. That is a 180% increase—a doubling.

[Chris Bloore (Redditch) (Lab)]

I congratulate you, Mrs Hobhouse, on your chairmanship and the hon. Member for Horsham (John Milne) on securing the debate, which has been well-mannered and thoughtful on all sides. The hon. Member for Thirsk and Malton (Kevin Hollinrake) is giving a fighting and boisterous speech, but I remind him that we both stood on manifestos that contained numbers of new homes that we would build. In fact, his party’s number was bigger than the Government’s: it was 1.6 million. If we are going to talk about facts and how we deliver these things, let us talk about sense and pragmatism, and not rhetoric, because, unfortunately, what he is saying now is not what he said at the election.

[Kevin Hollinrake]

Good for the hon. Gentleman for reading our manifesto—not enough people did, I am afraid. He is right: we did set a more ambitious target, which I am not against. As I said right at the start, I am in no shape or form a nimby. However, I am for honesty and fairness. The point is that the housing targets have been moved away from certain types of area where people tend to move. They tend to move from rural to urban to take their first job or start their first business, as I did, but the targets are going from urban to rural.

The Minister faces many challenges alongside the huge number he has set himself. The Office for Budget Responsibility and Homes England have said that the number targeted is impossible. Let us see. I wish him well for delivery, although not on the skewed figures that we have discussed today. There are real challenges here, as the Minister knows: things such as the Building Safety Regulator; the skills issue; small and medium-sized enterprises, which build a far smaller proportion of homes than they used to; and making sure that we get first-time buyers on to the housing ladder.

We have tabled a number of amendments to the Planning and Infrastructure Bill that will solve all these problems, and I very much hope that the Minister will look at them. One of them proposes no solar on any best and most versatile land. I am sure that the Minister will look at that, because it would potentially leave space for more British farmland to produce fantastic food. We have also tabled amendments on protected landscapes—my right hon. Friend the Member for East Hampshire has a significant section of protected landscape in his patch, which is bound to constrain supply, but no recognition has been made of that—and on ensuring that there is no plus or minus beyond 20% in any of these targets, which would be fairer. We will also seek to amend the national scheme of delegation, which disgracefully removes votes from councillors, and restore the protections for the green belt. As some in this excellent debate have said, we need a better mix that is more suited to demand in local areas.

I very much hope that the Minister will support those amendments, but, because I feel that he will not, I will make one plea to him: please, look at the Building Safety Regulator. There is a queue of 18,000 homes with planning consent that are waiting six months or more for an answer from the Building Safety Regulator. That is a huge bottleneck in supply. I hope that the Minister will at least touch on that point.

[Wera Hobhouse (in the Chair)]

I know that the Minister has quite a lot of time, but I ask him to leave two minutes for the Member in charge to wind up.