National Policy for the Built Environment

Lord Best Excerpts

Tuesday 24th January 2017 Grand Committee

[Lord Best (CB)]

My Lords, I am grateful indeed to the noble Baroness, Lady Andrews, not just for introducing this excellent report but for initiating, alongside the noble Baroness, Lady Whitaker, the ad hoc Select Committee that produced it. Thanks go also to the noble Baroness, Lady O’Cathain, for chairing the committee and steering it through to its eminently sensible recommendations for easing the nation’s acute housing problems.

The special value of the more than 50 recommendations in the report is that they not only address problems of housing shortages and affordability but highlight the dangers of sacrificing quality—in relation to design, accessibility, and environmental, health and heritage factors—in the quest for quantity. On that theme, I note that last year’s report on quality in housebuilding from the All-Party Parliamentary Group for Excellence in the Built Environment drew attention to a recent deterioration in build quality and customer service and satisfaction. This is likely to be compounded by growing skills shortages, which of course could worsen after Brexit.

I see no reason why the Minister should not in principle welcome almost all of the committee’s recommendations. No doubt he will note that a number are already being pursued, including in the Neighbourhood Planning Bill. Tantalisingly, he may tell us that the committee will find more to approve in the forthcoming housing White Paper. Thanks to the significant changes of emphasis from Mrs May’s new team of Ministers, some of the least acceptable aspects of the Housing and Planning Act 2016 have now evaporated. Those of us who spent many long hours arguing about that legislation have happily overcome the frustration of thinking, “Why didn’t the Government get the point earlier?”.

In choosing from the committee’s cornucopia of important suggestions, time permits a brief word about just a couple. I declare my housing interests, as on the register, including as a vice-president and immediate past president of the Local Government Association, a vice-president of the Town and Country Planning Association, chair of the Property Ombudsman Council and co-chair of the APPG on Housing and Care for Older People.

My first issue concerns the committee’s call for new housing that will attract older people who want to downsize from bigger family homes. After a decade of promoting this issue, I hope very much that the White Paper will come up with some incentives to kick-start new building by the private and social sectors for our ageing population; for example, the stamp duty exemption advocated so persistently by the APPG on Housing and Care for Older People would actually benefit the Treasury by unlocking a chain of three other property sales on which stamp duty would be paid, if stamp duty is exempted for a pensioner downsizing.

I noted in a report published just yesterday by the Council of Mortgage Lenders that there are still only half the number of home moves each year compared with the levels in the years before the banking crisis. The CML says that low housing market turnover is pushing up property prices and leading to inefficient occupation of housing, with more people in homes that are too small, or too big, for their needs.

A government-backed “help to move” package for older buyers—like Help to Buy for younger ones—plus financial advice akin to that available to those thinking about their pension pots, could achieve the tipping point for downsizing. Attractive, accessible, energy-efficient retirement accommodation, as the Select Committee’s report notes, could also mean huge savings to the public purse by preventing or delaying the need for residential care and by facilitating earlier discharge from hospital. It would mean fewer accidents at home, a reduction in premature winter deaths and, indeed, in many areas, in isolation and loneliness. At the same time as improving physical and financial well-being for our later years, incentivising new retirement housing would open up those much-needed opportunities for younger generations to upsize.

I think time permits a second dip into the Select Committee’s box of first-class recommendations, so, secondly, I note the committee’s call for,

“much greater co-ordination and integration across the multiple Government departments that effect and respond to the built environment”.

My anxiety is about the clash between housing policies from the Department for Communities and Local Government and welfare policies from the Department for Work and Pensions. I was delighted to see that the Select Committee covering the work of the DWP in the other place has just got together with the Select Committee that covers the DCLG to look at the constraints on rent levels that the former department is imposing on supported and sheltered housing. It is vital that the DWP’s measures do not undermine the work of those at the sharp end who are catering for older citizens and people with special needs. The DWP has already achieved savings to its housing benefit bill by requiring social landlords—housing associations and councils—to cut rents by 1% plus inflation for each of four consecutive years because 60% of these rents are paid by housing benefit. These social rents are already well below market rents, and this compulsory rent reduction is simply a tax on the resources of social landlords. The expected 12% rental loss over four years sucks money out of social housing, making it more difficult for these social landlords to create the high-quality built environments that the committee advocates. Is it too late to stop these rent cuts before the four years are up?

My greatest concern in this clash between the aims of these two government departments relates to the private rented sector, where the DWP has limited the rent it will cover—the local housing allowance—to a figure that is slipping further and further behind the open market rent. Already two-thirds of private landlords are not keen to take in anyone in receipt of housing benefit, and landlords terminating shorthold tenancies for those on the lowest incomes, principally those in receipt of some housing benefit, already constitutes the most common reason for people becoming homeless. Below-market caps on rental payments add another, very significant, deterrent to landlords accepting those who need help paying their rent. Such tenants already struggle with deposits and rent in advance, and payment of the housing benefit direct to the tenant rather than to the landlord is further increasing the risk of arrears.

There are something approaching 800,000 households in receipt of benefit in the PRS, yet in areas of shortages, which now means not just London but most of southern England and hotspots elsewhere, landlords seem very likely to replace all those whose rent is being covered by housing benefit—or, to be technical, increasingly by the housing element of universal credit—with tenants who are able to pay the full market rent. Out goes the single mother with young children to make way for the two-earner household or perhaps the three students. The DWP may be hoping, Canute-like, to turn the tide, buck the market and expect private landlords to accept rents that, in real terms, go down each year. This approach might have some effect in areas of very low demand, where tenants requiring housing benefit are a big part of the local market, although squeezing rents in these areas where properties are often of low quality could mean landlords cutting back on overdue repairs and maintenance. But mostly the DWP’s approach will simply mean landlords not accepting any tenant who relies on housing benefit, including of course many households in work but on the lowest wages. This means accelerating the numbers of those with nowhere to go in either the private or the social housing sector.

I am looking forward to piloting the excellent Homelessness Reduction Bill—the Private Member’s Bill supported by the Government that should be with us in a few weeks’ time—through your Lordships’ House, but I see a real need for DWP welfare policies to be better aligned with DCLG housing policies if we are not to see escalating homelessness and the massive cost that would bring. I congratulate the ad hoc Select Committee on this extremely good report, and I suggest we use its recommendations as the yardstick against which we can judge the merits of the eagerly anticipated housing White Paper next month.