Housing and Planning Bill

Lord Best Excerpts

Tuesday 26th January 2016 Lords Chamber

[Lord Best (CB)]

My Lords, at the Bill’s next stages I look forward to joining debates on starter homes, self-build and custom housebuilding, rogue landlords, right to buy, sales of vacant council housing, rural housing, pay-to-stay rent increases, planning, CPOs and more. Tonight, my six minutes must concentrate on the principal, overarching housing strategy that the Bill seeks to take forward.

The housing strategy has two admirable goals: first, to increase significantly the number of homes built each year in response to acute shortages, with a respectable target of 1 million extra homes over the life of this Parliament; and, secondly, to enable many more households to become owner-occupiers, with a more level playing field between first-time buyers and buy-to-let landlords. These are two worthy aims and I commend them both. The problem is that they exclude support for hundreds of thousands of households, with 70,000 out of a total of 240,000 new households formed each year not being able to take advantage of the new opportunities to buy. Lots of people, particularly in London and the south-east, many with good jobs, simply cannot afford to buy, even at 80% of market value. These will be the losers from a Bill that makes the home-ownership option effectively the only game in town.

Worse, the Bill not only does so little to enable new housebuilding for those on below-average incomes, it actually reduces the existing stock available to those who cannot buy. To a large extent, it is these less affluent households that will pay the price for measures that help people who are better off than them to buy a home. The Bill robs Peter to pay Paul, even though Peter starts off in a worse position. The biggest winners are those who were going to buy anyway and now get substantial financial benefits—for nothing.

In three ways the Bill seeks to achieve its ends by taking resources away from those who are not going to be able to access home ownership. First, in relation to the building of new homes on practically every site in this country, the Bill is proposing that the mechanism of planning gain—the placing of social obligations on housebuilders through planning agreements—switches from requiring affordable housing for rent for the least affluent to requiring starter homes for sale for those who are better off. Councils will be ordered to demand these homes for sale, even if the local authorities’ market analysis and housing needs assessments show that in their area the real need is for affordable housing for rent.

The second way in which the Bill would help potential homeowners but at the expense of those who are in no position to buy is through the replacement of the housing association rented homes that are sold under the voluntary right-to-buy arrangement with homes for sale. Over the years ahead this measure would gradually see the loss of many thousands of existing rented homes that would otherwise have come available to be re-let to poorer households.

There is a third way in which the Bill helps home ownership, but at the expense of affordable renting. This is in the requirement for local authorities to sell their higher-value homes when they become vacant, instead of re-letting them to a family desperately waiting for one. These homes are to be sold on the open market: in London, no doubt, often to overseas buyers. But funding constraints will not make it possible for their one-for-one replacements—or assuming that it really can be achieved, two for one in London—to comprise similarly affordable rented homes, let alone in the same locality. I am thinking here not only of London boroughs but of most rural areas.

I understand that the Government are expecting 100,000 affordable rented homes to be built over the next five years, out of the total of 1 million new properties. This would leave 50,000 of the additional 70,000 lower-income new households formed each year with no new housebuilding for them. They would have to join longer waiting lists for re-lets in the council and housing association stock diminished by the Bill. I just do not know where these households are meant to go.

Neglecting the needs of less well-off households is not only a huge problem for them and for localities, which need a workforce who cannot all be homebuyers; it will also prevent the Government achieving their goal of 1 million homes to be built between 2015 and 2020. Putting 90% of the eggs in the one basket of home ownership—I think that eggs in baskets have now cropped up four times tonight, for which I apologise—means that the country becomes dependent on the single stream of new housebuilding for sale. But housebuilders will build for home ownership only at the speed at which people buy, whereas the subsidised housing of councils and housing associations can be built outside those constraints. It is the contribution of these two streams of housebuilding in combination that can achieve the Government’s target—as history shows us.

If only the Government could be persuaded to boost the supply of affordable homes for rent as well as giving more help to first-time buyers, we could really get on top of the dire housing situation that faces the next generation. However, if austerity policies forbid the necessary investment at this time—despite the opportunities that low interest rates currently create—then at least the division of available resources should give as much priority to ensuring a decent home for those not in a position to buy as for those who can.