Affordable Housing

Lord Bourne of Aberystwyth Excerpts

Thursday 15th December 2016 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a councillor of the London Borough of Lewisham and a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the Government do not do a formal assessment in this area but we recognise that the country’s housing shortage can act as a barrier to employers recruiting the skills that they need.

[Lord Kennedy of Southwark]

My Lords, the problem is particularly stark in London, where a survey by Grant Thornton found that 84 % of businesses in the capital believe that London’s housing costs and housing shortage pose a risk to its economic growth. When are the Government going to start working with the Mayor of London to build the thousands of council and housing association homes at true social rents that are needed and accept that the overreliance on the affordable rent model, at up to 80% of market rents, is just not working and is damaging businesses, jobs, prosperity and growth in London?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will be aware that we have just reached a record settlement in London with a £3.15 billion package, which has been acknowledged by the Labour Mayor of London and widely welcomed, not least by the Labour mayor of Lewisham, Sir Steve Bullock. Therefore, I think the noble Lord will associate himself with that welcome.

[Baroness Eaton (Con)]

Will the change of tenure flexibility and additional funding make a difference to the overall supply of affordable housing?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is right in the sense that it was announced in the Autumn Statement that we would provide funding across a range of tenures. This will enable housing associations and local authorities to step up their delivery of a range of housing to meet local needs.

[Lord Shipley (LD)]

My Lords, does the Minister agree that there is a basic principle at stake here—namely, that a person in work on the living wage should be able to live reasonably close to where they work? Do the Government accept that principle?

[Lord Bourne of Aberystwyth]

My Lords, certainly it is right to say that people should be within easy reach of where they work. That informs our policy in relation to affordability. As the noble Lord will know, affordability in London is based on 65% of average property price; outside London the figure is 80%. I associate myself in general with what he says.

[Lord Tebbit (Con)]

In view of the remarks from the Liberal Democrat Benches, has my noble friend had any representation from them or, indeed, from the Labour Benches about the efforts of the railwaymen to prevent people getting to work when they are living within a reasonable distance of London?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend’s point about accessibility to work, and how important that is, is right. With regard to the noble Lord’s Question, I am keen to stress that it is important to be able to get to work; it is not just a question of the physical distance. I associate myself with the general principle of my noble friend’s question—that we need a settlement in this dispute.

[Baroness Watkins of Tavistock (CB)]

Have the Government considered exactly what the algorithm of 65% of market rent means when set against public health worker and teacher salaries in London? The fact that those salaries have been kept linked to a 1% increase for so long while rents have gone up so heavily makes the algorithm ludicrous in terms of rents for some of those workers.

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is right to pose that question. Of course, as I have indicated, part of the answer is that we are looking at flexibility of tenure—it is not just with regard to purchase but also shared ownership and affordable rent. But the noble Baroness is right that there is a problem, and we are seeking to address it.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, can the Minister return to the original Question he was asked by my noble friend Lord Kennedy, to which I am not sure he quite gave an Answer? Will the package of funding that has gone to the Mayor of London, which he referred to—although some of us do not know the detail of that—include or be capable of including provision for rents not at the affordable level we have just heard discussed but at levels that people can actually afford?

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness addresses the issue of the money for London. I can only repeat that it is a record settlement—a point made by the Labour mayor. It addresses issues not just of affordable rent but of purchase for shared ownership. This is the best settlement there has ever been for housing in London, as was stated by the mayor.

[The Lord Bishop of St Albans]

My Lords, the lack of affordable housing in recruiting local workers is also felt acutely in many rural areas. Rural exemption sites have proved a good way of providing affordable housing but, with the uncertainty over the recent extension of right to buy, some landowners are reluctant to bring forward land. In light of this, will Her Majesty’s Government publish clear guidelines on the potential for restrictive covenants on rural exemption sites to provide affordable housing in perpetuity for local workers?

[Lord Bourne of Aberystwyth]

My Lords, the right reverend Prelate is right to address the issue of rurality, which is a particular problem in terms of affordability. He is absolutely right that the problem is associated not merely with big urban centres. The Government are looking at this in the broad context of what to define as a rural area, and will bring forward proposals at some stage to seek to address the problem he just outlined.

[Lord Flight (Con)]

My Lords, does the Minister accept that buy to let has been extremely important in the provision of additional accommodation, particularly in London and the south-east? Is he concerned that the increase in taxation on buy to let may reduce the number of units, relatively speaking?

[Lord Bourne of Aberystwyth]

My Lords, I do not agree with the noble Lord’s last point. Measures were taken by the Treasury to raise finance for this. It is part of the mix, but the Treasury has to assess in the round how to address the deficit in the Exchequer, and one move was to target the taxation of those who were deemed able to afford it.

[Baroness Greengross (CB)]

My Lords, has the Minister ever thought about whether underused government buildings are available? If they were made available for housing at low cost or for rent, it might ease some of the issues, particularly around London.

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness addresses an issue that was tackled to a degree in the Autumn Statement, when we announced £1.7 billion for pilots on surplus public sector land. We will take that forward; it is a considerable investment, but the noble Baroness is right to highlight the matter.