Residential Construction and Housing Supply

Lord Best Excerpts

Wednesday 24th April 2019 Lords Chamber

[Lord Best (CB)]

My Lords, I thank the Minister for his helpful introduction to this debate. I will forfeit my opportunity to offer him 10 ways for government to ensure 300,000 affordable, high-quality, well-designed homes a year. However, I recommend that he and all interested parties look out for the forthcoming reports from the Centre for Social Justice’s housing commission and from the Affordable Housing Commission organised by the Smith Institute and the Nationwide Foundation—I declare my interests as chair of these two commissions. I also declare interests as a vice-president of the LGA and the TCPA.

I want to use my few minutes to draw attention to the quite dramatically changed policy context in which we are now debating the construction of the new homes the nation needs. Over recent years there have been some quite fundamental, but largely unremarked, shifts in government housing policy, and I want to highlight and commend these important U-turns.

I have now counted over 20 significant reversals of housing policy over just the last three years or so. In essence, I detect the abandonment of a range of earlier policies which would diminish the social housing sector—the council and housing association sector—and would rely on a handful of volume housebuilders. Now, instead of that agenda—so familiar to those of us in your Lordships’ House who argued over the fateful Housing and Planning Act 2016—there are positive new measures to encourage, grow and expand social housing, while curbing the endlessly disappointing performance of the big housebuilders. In passing, I note equally the measures to redress the balance of power in the private rented sector from landlords to tenants, not least with last week’s very welcome announcement from the Secretary of State of greater security of tenure for renters.

Of particular relevance for today’s debate, the items from my long list of 20-plus policy reversals are these: first, the freedom for councils to borrow to build, in place of a tight cap that has prevented most local authorities building new homes; secondly, new grant funding for social rent—low-cost rentals—ending a virtual ban and the substitution of so-called affordable rents, which are not affordable to those on lower incomes; thirdly, dropping the flagship scheme to require councils to accept “starter homes” for sale in place of the previous planning obligations on housebuilders to ensure provision of low-cost rental homes; fourthly, pledging to close the “viability loophole” which has allowed housebuilders to renege on Section 106 planning obligations to provide affordable homes; fifthly, revival of the Government’s multibillion-pound loan guarantee scheme for housing association borrowing, which had been scrapped earlier; sixthly, dropping a controversial plan to put rents for specialist, supported housing on to a new basis that had stalled many developments for older people and others; seventhly, a full reversal of the imposition of a compulsory annual 1% real reduction in social housing rents—which has reduced the capacity of social landlords to develop new homes—and instead the substitution from next year of CPI-linked rent increases; eighthly, batting the idea of extending the right to buy to housing association tenants into the long grass and, more significantly, dropping the dreadful plan to make councils sell their best properties on the open market, when they fell vacant, to pay for the new right to buy discounts for those housing association tenants; ninthly, scrapping policies that make life tougher for social housing tenants, forcing social landlords to end long-term security of tenure and to raise rents for those who achieve improved earnings—“pay to stay”—and, in contrast, following the Grenfell Tower tragedy, promising measures to strengthen the regulation of social housing landlords and enhance the status of social housing tenants; and, finally, rather than putting increased faith in the major housebuilders, instead coming forward with at least four new constraints on them: deciding to create a new homes ombudsman to handle the numerous complaints from house buyers; outlawing appalling practices by housebuilders in selling leases with rip-off ground rents; requiring higher standards from housebuilders, not least to improve energy efficiency; and starting the phasing out of the multibillion-pound Help to Buy subsidies that have been so lucrative for the big housebuilders.

I see each of these turnarounds as a triumph of good sense and a credit to the relevant Secretaries of State and their Ministers. All of us can now build on the near-universal recognition that housing shortages and deficiencies will not be cured by volume housebuilders and “the market”. More, not less, government intervention —through both investment and regulation—is sensible, positive and necessary. I am not saying that the reorientation I have described means that everything is now sorted—sadly not. But what has changed is that so much housing policy is now facing in the right direction; what is needed now is for it to move forward further and faster in the direction now set. Government now has the opportunity to embrace further shifts in the same direction and accelerate progress—for example, with greater funding for social rent, with the adoption of Oliver Letwin’s recommendations for capturing land value, with more progress on garden towns, with changes to standards of accessibility and energy efficiency through Building Regulations and, yes, by promoting and incentivising modern methods of construction. If government sustains its significant shift in emphasis to more proactive governmental input, there will be new hope for the tens of thousands who need a better housing solution.