Lord Campbell-Savours
Main Page: Lord Campbell-Savours (Labour - Life peer)
Lord Campbell-Savours (Lab)
My Lords, I thank my noble friend for tabling this debate. My comments today deal with a particular problem that arises with the availability of affordable housing in the Lake District, where a voluntary organisation, the Keswick Community Housing Trust, part of the National Community Land Trust Network, is struggling to deal with a local housing crisis. Trust members and supporters, many of whom are motivated by their Christian beliefs, are truly upset by the prospect of being forced to sell off their cherished housing stock. In that light I asked its chairman, Mr Bill Bewley, a prominent Quaker, to set out in a letter the concerns of the trust, which I now offer to the House as testimony from those on the front line in this debate:
“Dear Dale … First of all a short explanation of how Keswick Community Housing Trust came into existence and my motivation, with others, to forward its aims. KCHT was started by myself and a group of people who had been empowered by a series of meetings organised by Churches Together in Keswick, looking at all aspects of life in Keswick. At all five meetings the problem of a lack of affordable housing in Keswick was raised. Keswick suffers from the double blow of high house prices and low wages. In order to afford an average priced house in Keswick you would need a family income of £70,000. The average wage in Keswick for 2014 was £14,000 for the lowest 25%. So a quarter of the couples in Keswick could not even afford half the cost of an average house. After a public meeting to look at this very point we were strengthened by more … committed people. So in December 2010 we managed to formally establish Keswick Community Housing Trust as an Industrial and Provident Society with Charitable Status. We have a board of 12 active volunteers.
My motivation is based on my deeply held Quaker convictions. If the words of Jesus ‘To love God and your neighbour as yourself” mean anything it means to do whatever you can to make a difference in your community. I feel I can do that as Chair of KCHT. Quakers have always had a concern for ‘proper housing’. The Cadbury’s Bourneville and Rowntree’s New Earswick housing schemes strongly demonstrate this. Present day Quakers are also involved in this area with Quaker Housing Trust, Quaker Social Action and The Joseph Rowntree Trust. Others on my board are motivated by a desire to keep Keswick a vibrant community, which is very close in our view to what David Cameron may have had in mind when he so powerfully spoke of ‘The Big Society’. We are the living and working proof of that, now-a-days, less mentioned initiative. We completed our first project of 11 3-bed houses in November 2013. One was for local occupancy sale, five for shared ownership and five for affordable rent. In order to keep the shared ownership affordable we do not charge rent on our half. Our current rents are below the National Housing Federation’s target of affordability. If we take the previously quoted income figure of £14,000, a couple in the lower quartile could earn £28,000 so rent should be less than £7,000 pa (25% of income). Our rents are currently just over £6,000 pa.
The above financial model is very secure for the moment unless an earthquake in the form of the ‘Right to Buy’ strikes. If this scheme should badly affect Keswick Community Housing Trust, it will make all of our houses unaffordable and destroy all our hard work. We are currently two months away from refurbishing a disused building into 4 x 1-bed units and 18 months from completing a further 22 affordable homes. These projects were financed using our existing houses as assets, and should we lose a significant number we would be unable to finance future developments. This is because our assets would have been jeopardised by loss of collateral. We all feel very proud of the fact that in under seven years we will have delivered 37 affordable properties to help keep Keswick a vibrant community. We would be heartbroken if all the thousands of hours spent on this fantastic community effort, was taken away from us by some ill thought out idea. I have recently visited Bulgaria, where in the last 20 years over half of the villages have become deserted due to rural decline. I do not want this to happen in Keswick or anywhere else. Just a few years ago, David Cameron was happy to take a drink with Rory Stewart and others”—
he is a local MP—
“to celebrate the work of the Lyvennet housing trust. The Trust had delivered a scheme of 16 affordable houses in Crosby Ravensworth, not far from Keswick. Surely this is the height of hypocrisy in the present light. There are hardly any spare sites in that village and certainly not enough to replace all the houses they have already built, should they be forced to sell them. It is absolutely imperative that this impending disaster is NOT allowed to happen.
The special problem in Keswick is that we need to provide truly affordable housing for people who work here on low wages and to RETAIN available affordable housing against a property market which attracts high prices from wealthy purchasers nationwide seeking second homes or to retire here. To grant a ‘Right to Buy’ measure in the proposed form defeats the object of our charitable trust and totally undermines our … efforts. I ask you to do all in your power to prevent the ‘Right to Buy’ being imposed on Community Land Trusts like ourselves. Larger Housing Associations should be adequately compensated for any loss they could incur”.
That is signed by Mr Bill Bewley, a man who, with his colleagues, has made a huge contribution, and it would be absolutely wrong if people like that were stopped in their tracks because of the madness of the policies that the Government are going to pursue.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank all noble Lords who have taken part in this debate and thank the noble Lord, Lord Whitty, for introducing it.
I will start by casting noble Lords’ minds back to 2010, to a situation in which the banks were not lending, the builders were not building—as the noble Lord, Lord Stoneham, said, and of course that led to a loss of skills in that sector—and working people were denied the opportunity of home ownership. At that time there was a top-down planning system with regional spatial strategies which produced not houses but the lowest peacetime rates of housebuilding since the 1920s. The regional strategies and the guidance that accompanied them ran to thousands of pages. However, apart from breaking the bookshelves of planning officials across the country, they were notable for building resentment rather than homes for working people. Crucially, the stock of social rented homes had fallen by 420,000 since 1997, with 1.4 million families languishing on social housing waiting lists. Now, we are meeting people’s aspirations to own their own home by expanding on improvements in housebuilding and providing support for those who aspire to own their own home.
The noble Lord, Lord Whitty, and many other noble Lords, including the noble Lord, Lord Kerslake, said that we are not building enough homes. It is clear that if we do not supply the homes, there will be a problem. More than 260,000 affordable homes have been delivered in England since April 2010. The Government’s 2011 to 2015 affordable homes programme has exceeded expectations by delivering nearly 186,000 affordable homes since April 2011—16,000 more than originally planned. In all, 570,000 new homes have been built since April 2010, and there are now nearly 800,000 more homes than in 2009. The starts on new homes in the year to March 2015 totalled 140,500—the highest level since 2007. Homelessness is now at less than half of its peak level under the Labour Government in 2003.
We have wasted no time unveiling an important set of measures, including a new housing Bill announced in the Queen’s Speech which will increase housing supply, support home ownership and give housing association tenants the chance to own their own home.
Lord Campbell-Savours
On that point, I wonder whether the noble Baroness will answer my question. Why should Quaker Housing Trust—another interdenominational- sponsored housing trust—be forced to sell off its assets when it is run by volunteers and linked to all the churches?
Baroness Williams of Trafford
My Lords, I say at this point that we intend not to seize anyone’s assets but to enable people who aspire to own their own home to do so. I will come later to the noble Lord’s specific point concerning Keswick, if that is okay.
The housing Bill will help more tenants of housing associations to buy a home of their own. It will increase the supply of starter homes, help those wishing to build their own home and ensure more control over planning. I can confirm to the noble Lord, Lord Kerslake, that we will deliver 275,000 affordable homes with £38 billion of public and private investment, achieving the fastest build rate for 20 years. I can also confirm to the noble Lord that the Minister in the other place, Brandon Lewis, is already engaging across the sector, because, as he has said, that is very important. On the 10-year rent policy settlement, the Budget will be on 8 July. As the noble Lord will know, the settlement will then follow, so I cannot give any commitments at this stage.
The noble Lord, Lord Whitty, talked about the lack of affordability for first-time buyers. I can confirm to both him and the noble Baroness, Lady Warwick of Undercliffe, that, in addition, during this Parliament we will be committing to build 200,000 starter homes, to be exclusively offered to first-time buyers under the age of 40 at a 20% discount on the open market value. The starter homes will also help those in their 20s and 30s to have the opportunity to gain the benefits of home ownership which their parents’ generation enjoyed. We have introduced a new planning policy to encourage developers to build starter homes, and we will shortly set out a further package of reforms to support the delivery of these 200,000 starter homes.
The noble Baroness, Lady Warwick, passed me a note saying that she omitted to ask whether she could have a meeting with me. I assume that it would be to discuss housing. I shall be very happy to meet her, although I should add “in due course”, as at the moment I am quite busy.
The noble Lord, Lord Haskel, referred to supply constraints. Many noble Lords talked about lack of supply driving up house prices. As I have started to outline, we are increasing supply. We have granted planning permission for 261,000 new homes in the past year. House prices are affected by the economic cycle and we have a strong economy.
The noble Lord, Lord Stoneham, referred to the lack of discussion on Help to Buy. Forty-nine thousand people have been helped to buy, and more than 225,000 households have been helped to buy a home of their own by government schemes such as Help to Buy. Our manifesto committed us to extend the Help to Buy equity loan until 2020. We will introduce a Help to Buy ISA in the autumn to help aspiring home owners save for a deposit on their first home with contributions from government. For every £200 that someone saves through the scheme, the Government will contribute £50.
The noble Lord, Lord Whitty, and the noble Baroness, Lady Valentine, talked about borrowing without caps. The Government have no plans to remove the borrowing caps. They are necessary while we tackle the national deficit inherited from the previous Labour Administration. Local authorities have £3.13 billion of borrowing already.
The noble Lord, Lord Whitty, spoke of the need for a White Paper on a whole new approach to housing and suggested a target of 250,000 new homes—of which a proportion should be social housing—with clearer local responsibilities. As I have said, housing starts are at their highest annual level since 2007. Under Labour, despite the targets, housebuilding fell to its lowest peacetime rate since the 1920s. We are focusing on building more homes.
The noble Lord talked also about the cost of housing benefit rising in the private rented sector. Housing benefit cost rose by 50% in real terms in the 10 years to 2010. In 2013-14, welfare spending fell for the first time in 16 years. Some £470 million in discretionary housing payments has been made available for the period 2013-16 to help vulnerable households during welfare reform transition.
I think that it was the noble Baroness, Lady Bakewell of Hardington Mandeville, who talked about the right to build and neighbourhood planning. Councils will identify and provide land and a right to build for people who want to build or commission their own home. Already, 1,500 communities have started the process of neighbourhood planning, with more than 11% of the population of England living in one or more of the 1,300 designated neighbourhood areas. We will further simplify neighbourhood planning to make it even easier for communities to have more control over housing. The number of homes planned for locally has risen substantially and we saw planning permissions granted to 253,000 homes last year.
Many noble Lords talked about right to buy. As I outlined earlier, we believe in helping people in their aspiration to buy their own home. We will offer more than 1 million housing associations tenants the option to buy their own home in the same way as generations of local authority tenants. Until now, 1.3 million tenants in housing association properties have received little or no assistance in this area, which is clearly unfair. Aspiration should not be determined by the organisation that manages your home nor be limited by it, especially if it is funded ultimately by the taxpayer. That is why we will ensure that housing association tenants have the same opportunities for the right to buy a home at a higher discount level as council tenants. Revenue from sales will be invested in more affordable housing, and for every home sold a new home will be built, which relates to the point raised by the noble Lord, Lord Whitty, about addressing the lack of supply. Through the right to buy refresh scheme, 33,000 homes have been built, with 40,000 since 2010.
The noble Lord, Lord Best, talked about affordable homes being lost for ever because of the extended right to buy. We have been very clear that every home sold will be replaced by another one.
Baroness Williams of Trafford
My Lords, that is a policy announcement to be made later. Given the amount of time left, I am happy to write to the noble Lord in due course, but I am aware that the clock is ticking and I still have a pile of questions to get through.
Pension funds were mentioned by one noble Lord, which brought to mind what is happening in Manchester. Greater Manchester, which has a healthy pension fund, and the city council have signed up to a £30 million joint venture that will see new homes for rent managed by Places for People.
The noble Lord, Lord Haskel, and my noble friend Lord Horam talked about foreign investors in London. The former Government also took action to tackle tax avoidance and to ensure that those individuals who envelope UK residential properties by owning or purchasing them through corporate structures without a commercial purpose pay a fair share of tax. We are also levelling the playing field by introducing capital gains tax on future gains made by non-residents disposing of UK residential property.
The noble Baroness, Lady Bakewell, also asked why thresholds for exemptions on Section 106 were set at 10 houses and asked why local authorities could not set their own thresholds. Ten homes represents a major development in planning terms and this is accepted across the country. The thresholds policy states that affordable housing contributions should not be sought from sites of 10 units or fewer and 1,000 square metres or less, and a lower threshold of five units applies in national parks, areas of outstanding national beauty and designated rural areas as a direct result of concerns raised. New developments tend to be predominately smaller scale in rural areas.
The noble Baroness, Lady Bakewell, also said that there should be more targeted funding for rural affordable housing through the HCA. The HCA looks at a range of factors, including local circumstances, when allocating funding. There is no set amount of grant funding. Higher costs that can occur in rural areas are taken into account.
The noble Lord, Lord Campbell-Savours, talked about the impact on community housing trusts of the extension of right to buy. To some extent, I have already started to address that point. The development of that policy is ongoing and we are engaging with that sector.
Lord Campbell-Savours
Is there any chance that this particular group will be exempted from legislation?
Baroness Williams of Trafford
I hope that the noble Lord will forgive me if I do not give a response at this point.
Baroness Williams of Trafford
I will certainly write to the noble Lord, but I am not in a position to make policy announcements at the Dispatch Box.
The noble Lord alluded to Keswick, so I will outline how we are supporting housing in Allerdale council. There have been 460 affordable homes delivered in the Allerdale local authority area between 2010 and 2015. In terms of help to buy, there have been 80 equity loan sales to March 2015, 58 mortgage guarantee loans, 158 homes supported by 20 new-buy mortgage loans and, up to 2014, the new homes bonus for Allerdale has been £791,455.
The noble Lord, Lord Best, said that the current right to buy has become more generous with increased discounts and shorter qualifying periods. The qualifying period was reduced from five years to three years under the Deregulation Act 2015, returning to the original qualifying period set in the 1980s, and the right to buy discount has increased to realistic levels after years of stagnation when the discounts became irrelevant.
A question was raised about making land available. We want to make brownfield land available because people want new homes to be built near existing residences while the green belt and the local countryside are protected. They might even want to build their own home. We will ensure that brownfield land is used as much as possible for new development. We will require local authorities to keep a register of what is available and ensure that 90% of suitable brownfield sites have planning permission for housing. I mentioned in this House the other day that we will create a brownfield fund to unlock land. There will also be a new London land commission to identify and release all surplus brownfield land owned by the public sector and fund housing zones to transform brownfield sites into new housing, creating 95,000 new homes.
The noble Lord, Lord Haskel, made the point that no one believes that one-for-one replacement will work, especially in London. There is inevitably a lag between sale and replacement in order to assemble land, get planning permission and so on. That is why in 2012 councils asked for three years to deliver the one-for-one figures that we have published today. They show that 3,053 additional homes were sold in 2012-13, and 3,337 have been started or acquired. The numbers have doubled in the last year, so councils are delivering the one-for-one replacement to date. However, we cannot expect to see the figures on that replacement immediately.
Two noble Lords talked about the definition of affordable housing. It is set out in the National Planning Policy Framework and in the Housing and Regeneration Act 2008. The definitions are as follows. The National Planning Policy Framework defines it as:
“Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices”.