Housing (London)

Lord Goldsmith of Richmond Park Excerpts

Tuesday 15th February 2011 Westminster Hall

[Jeremy Corbyn (Islington North) (Lab)]

I am very pleased that we have secured this debate on housing needs in London. There is a feeling of déjà vu about it, although the cast is smaller than usual for debates on housing in London. We have had many such debates and discussions and I suspect there will be many more, because the biggest single issue facing constituents of London MPs is housing problems, which affect just about everyone in every sector. I remain acutely disappointed by the Government’s policies in this respect and the response they have offered so far to the deepening crisis that people in London face.

Homelessness has returned to the streets of London and is increasing fast, as anyone walking around London late at night will quickly observe. I am talking about the numbers of desperate and destitute people sleeping in shop doorways, hanging round outside tube stations and sleeping over central heating exhaust vents. Indeed, the Evening Standard reported that a number of people had been found sleeping in rubbish chutes in west London. That is not a good advertisement for what is a very large, multicultural and diverse city in the 21st century—a city that sees itself as a world-class leader.

Other issues, which I shall go through in my remarks, include the costs of housing for people living in the private rented sector, the enormous shortage of council housing, and what I believe is something of a democratic deficit in the administration and development of housing associations.

Later today, a housing lobby will take place outside the House and probably also in Committee Rooms here. Many people who are council tenants and others will be making the very strong point that the desperate housing shortage in London and the rest of the country must be dealt with, that the market alone cannot solve the problem and, indeed, that the Government strategies, far from solving the problem, are making it considerably worse.

I shall say more about this later, but within the mix of housing in London, the difference with the rest of the country is that the national average for home ownership is about 70% and declining, whereas in London it is declining much faster and, in constituencies such as mine, the proportion of people living in and owning their own home hovers at about the 30% mark and falling. For my constituency and for most of central London, as my hon. Friend the Member for Hammersmith (Mr Slaughter) will testify—similar figures will apply in his constituency—the difference is the very large numbers of people living in private rented accommodation.

Let me first deal with the issues relating to home ownership in London. For the majority of people on anything approaching an average income, the idea of owning one’s own property in London is a pipe dream. They may have a chance of purchasing on a part-rent, part-buy basis—a shared-ownership scheme. However, in central London constituencies such as mine, people would need to have an income well above the national average—indeed, we are talking about an income of £40,000 or more—to get anywhere near meeting the mortgage requirements, if they can get a mortgage and if they can raise the deposit required. For the majority of people in London, unless they have a degree of inherited wealth from their parents or someone else, or access to the very large deposits required by banks and building societies, home ownership is an impossible dream.

Many people have opted to buy into leaseholds or shared ownership with housing associations, and there are deep concerns about the service charges imposed by housing associations and other holders of freeholds who sell on leases in their properties. There is a need for even greater transparency on capital works undertaken to improve those properties. Those of us who represent constituencies where there are a considerable number of leaseholders who have bought in on the right to buy, or bought from people who bought their flat under the right to buy from the local authority, know that there are constant disputes about the costs of capital works and the repayments required. Indeed, they leave some people in a penurious state.

I suspect that many people, when they buy into leasehold properties, are completely unaware of the implications of lease ownership in relation to capital works and vastly and rapidly increasing service charges. I look to the Government to be prepared to be much more transparent and much tougher on regulation in this respect. It is an area of inquiry that the Select Committee on Communities and Local Government ought to be looking into.

The Government’s normal refrain in any debate on anything is that everything that is a problem in our society is the fault of the previous Government. I want to place on the record a couple of points about the previous Government’s record. First, I strongly praise them for the work they did on the decent homes standard, and for the huge and very necessary investment that was made to deal with the repair backlog in council and housing association accommodation. It is a joy to see estates that have been transformed with new kitchens, new bathrooms, new roofs, new windows, new entrance areas and common parts, improvements in the community facilities and improvements in community centres. That creates a sense of pride and well-being in a community that it is hard for anyone to appreciate who has not been through the misery of living on badly run council estates with run-down common areas and high levels of vandalism. I am talking about the sense of pride that comes from the improvements and the reductions in vandalism and antisocial behaviour that result from them. By and large, the decent homes standard work that has been done has been a very good experience. I regret the way in which the so-called choice was put to tenants—that they had to go either to an arm’s length management organisation or for a stock transfer in order to receive central Government money for that. Fortunately, those policies were eventually changed so that all tenants, irrespective of the quality of management or otherwise of their local authority, could receive the central Government money that is so necessary and valuable.

However, as the Minister will know from a recent debate on this subject, a number of local authorities in London did not do very well or did not get any decent homes standard money. They and their tenants desperately need those improvements. I am thinking particularly of Camden and Lewisham, but I suspect they are not the only examples of authorities that need that special attention to achieve improvements in their properties.

The other great step forward that the previous Government made was on homelessness and the rough sleepers initiative, increasing the number of hostel places and encouraging the various charities that run hostels, or local authorities, to provide, as a priority, transfers from those into long-term, permanent, affordable accommodation. That was an important step forward, as was giving priority to people who have come out of prison—long-term offenders who need to be rehabilitated into society. Forcing them into homelessness and poverty is not a way of rehabilitating them and is no good for society as a whole. I am constantly and increasingly shocked by the number of homeless people one meets who are either ex-service people—usually ex-servicemen—or ex-prisoners and convicts. It does not do our society any good to ignore those people and force them into homelessness.

I realise that the Government’s general strategy on housing allocation policies is to leave the issue to local government and to walk away from it entirely, but I ask Ministers and local authorities to think carefully about those policies. We have rightly emphasised the needs of families with children, the vulnerable, those who suffer illnesses, including mental illness, and vulnerable elderly people. Obviously, they are all a priority, but we seem completely to ignore the needs of youngish single people when it comes to providing reasonable, publicly accessible local authority or housing association properties.

It is depressing to have such young people come to see me in my advice bureau, and I am sure other colleagues have had the same experience. The person in front of us will usually be a young man, who will often be in a reasonable job. They will be earning £18,000 or £20,000 a year, but they simply cannot get anywhere to live, because they cannot afford the deposit on a private rented place. In any event, the rent would be very high—possibly £250 or more a week. These people cannot access local authority housing because they are not deemed to be in priority need. One therefore comes across people—I am sure colleagues can bear this out—who hold reasonable jobs but who have no permanent home. They are sofa-surfing or, in some cases, even sleeping in cars, which is tragic. When we look at housing allocation, we need to address the needs of not only families and others, but single people.

[Zac Goldsmith (Richmond Park) (Con)]

I accept that the onus cannot be entirely on local authorities, and that point is well made. However, there is a lot that the local authority can do to place empty homes back on the market. My constituency covers Richmond and Kingston, and there are up to 2,000 empty homes in each of those boroughs. By that, I do not mean homes that have been waiting to be refurbished or homes that cannot be sold, but empty homes by any standard. If, for starters, we multiply the 4,000 homes in those two boroughs by the number of boroughs across London, we have an enormous number of empty homes that could be brought back on to the market and used. Does the hon. Gentleman think that the Government could do more to empower local authorities to get such homes back on the market?

[Jeremy Corbyn]

The hon. Gentleman makes a fair point. Local authorities have powers in this respect, if they care to use them, and some authorities do. Indeed, the local authority in my area is extremely proactive in pursuing empty properties and trying to bring them into rented use or have them taken over by a housing association or somebody else. Typically, these are places such as flats above shops. The hon. Gentleman is absolutely right: there is something criminally wrong about large numbers of good-quality homes being deliberately kept empty across London. Some owners see them as long-term, reserve places that they might live in at some distant point in the future. Some see them as an investment and will wait for property prices to go up. In a society where there is so much homelessness and housing stress, it is simply immoral for places to be kept deliberately empty. I would therefore support effective measures to bring those homes back into use by people who are in desperate housing need.

Where the previous Government did act rather belatedly was on the construction of housing association and council properties. There was an increase in housing association build, most of which came about under section 106 of the Town and Country Planning Act 1990 and planning agreements on particular local sites. However, there was not enough intervention, and the previous Government were not proactive enough. Only rather belatedly did we start building council housing. I am pleased to say that my local authority is now building council housing again. That started during the latter period of the previous Government, when the then Liberal-controlled council brought the programme into being. That programme has continued and is being expanded under the current Labour-run administration in Islington. However, the authority lacks the capital that it requires from the Homes and Communities Agency. When the Minister replies, therefore, I hope he will understand that housing and building costs are high in London, that housing need is desperate and that the only long-term, efficient way out of the housing crisis is to construct council housing at fixed rents and with permanent tenure, which gives people a sense of security, a decent home and an environment in which to grow up.

Before I come to housing benefit, let me say one thing. If we go to any primary school, secondary school, police station or social worker in London and ask what the biggest problem is that we face, we will be told that it is related to housing in one way or another. Young people are growing up in small, overcrowded flats, with two or three siblings sharing a bedroom. That is no way to grow up. Young people in those circumstances cannot bring friends home and they cannot do their homework. There are fights over the television, there are fights over when the lights should be switched on and off—there are fights the whole time simply about space. Anyone who goes into a flat where three teenagers are sharing a room will see the arguments that go on and the stress that is caused to the whole family. What happens as a result? The teenagers do not stay home of an evening; they go out. They do not have a lot of money, so they get into bad company when they go out, and problems result from that. These teenagers underachieve in school. Illness runs rife throughout the whole family. The family breaks up. There is a huge cost to us all in terms of wasted lives, underachieving children, broken families, divorce and everything else. We must recognise that unless we provide all our young people with decent, secure, clean, dry and properly repaired accommodation, it is very unlikely that they will achieve their full potential in school, college or university. We are wasting a whole generation as a result of our failure to address the housing crisis in London.

Local authorities have great difficulty fulfilling their statutory housing obligations to house homeless families or those in desperate need. They do not have enough council or housing association allocations to do that. Incidentally, there is a whole science around allocation, with people looking at the choice of bidding or desperately looking on internet sites and reading newspapers to find out how many points they need to get which flat, how many steps are involved and all the other details, which are so important. However, most of those people, most of the time, will be desperately disappointed because they will fail even to be selected to look at a place, never mind to be shortlisted for possible allocation. For thousands and thousands of people, it is like losing a lottery every week, but the consequences are desperate. We therefore need to address the issue.

Local authorities often place families in private rented accommodation. I do not blame them for that; they have no choice. A whole industry has therefore grown up around the housing shortage, with letting agencies and private landlords charging as much as they can get away with. The housing benefit system will usually pay the rent. Although it varies slightly from borough to borough, the rent for a typical two-bedroom local authority flat in central London is of the order of £100 a week. A two-bedroom flat in poor condition in the private sector costs at least £250 a week, and £300 is quite common. For a house, we are looking at £500 or £600 a week. The difference is paid through housing benefit, so we are all paying the exorbitant profits made by letting agencies and private landlords; they are the people who are living off the housing benefit system.

When the Government say, as the previous Government did, that they have to address the problem of the cost of housing benefit, particularly in London, I absolutely agree, because pouring money into the private sector in this way simply is not a good use of public funds.

--- Later in debate ---

[Mr Slaughter]

I can tell the hon. Gentleman that, of course, budgets and housing benefit would have been reviewed, but he is wrong to think that a Labour Government would have been party to the mass eviction of hundreds of families from areas in which their children attend school and they have low-paid jobs. We are talking not about indolent people but those doing low-paid essential jobs in inner London. Before the hon. Gentleman gets on his high horse, he should think about the consequences of his Government’s policy.

Far more fundamental in the long term will be the review of social housing policy. I almost admire the speed at which the Government have moved to ring the death knell of social housing. There has been consensus on that policy certainly since the second world war, and in the charitable sector since the beginning of the last century. That, however, is not good enough for this Tory-led Government.

There are four principal changes. The first is the introduction that I alluded to earlier of near-market rents for new lettings. In London, they will effectively be unaffordable, even to those on average incomes. Rent for two and three-bedroom flats in Hammersmith will rise by three or three and a half times. The second is the two-year tenancy. The speed of their introduction is amazing. I printed a leaflet to warn tenants that the Government might be introducing five-year tenancies, but before I was able to deliver it they had introduced two-year tenancies. The third element is the almost complete collapse of capital funding for the social sector.

As I mentioned earlier, there is the end of the requirement to provide permanent housing in the long term, with the private sector being used to discharge housing need obligations. If, God forbid, the Government were elected for another term, within 10 years there would not be a recognisable social rented sector left in this country. The proud tradition of providing affordable good-quality homes for people on low and average incomes will be gone, and a fundamental part of the welfare state and the post-war settlement will be gone with it.

Finally, let me turn to planning policy, which is a slightly trickier area to consider. I accept what Government Members say about the previous Government’s record in this regard. Over the past 40 years, our record on building sufficient numbers of high-quality affordable homes in this country has not been good. It is almost as if we lost the will to build such homes in the 1970s. In my constituency, we have good examples of the estates and properties that were built in the 20th century: the “homes for heroes” in the 1920s, the “garden” estates in the 1930s and the good quality brick-built council estates of the 1940s and 1950s. We even have some 1960s properties, which, although they have gained a bad reputation, are generally solidly built to Parker Morris standards. They are popular with people who live in them, even if they have not been maintained properly over the years.

The consensus on the will to build good quality council and housing association properties in sufficient quantities has gone. Individual local authorities—including, I hope, my own when it was under Labour control—did their bit and had to be resourceful in doing so. For example, there were the infill developments. We saw building on existing estates, public land being given to people who were prepared to build affordable housing, and building on top of supermarkets. We managed to build about 3,000 good, affordable units over a period of years, but it was a struggle. I do not pretend that it is easy to build social rented houses in areas of high land prices. Nevertheless, as my hon. Friend the Member for Islington North said, for many people—even those on average and above average income—social rented housing is the only type of affordable housing. The definitions of affordability in London have been stretched to ridiculous lengths. The Mayor and some councils say that an income of £70,000 to £80,000 qualifies under the affordable definition, because the types of discounts available on properties for sale or for rent in new developments demand such an income. I am sorry, but I do not accept that people who earn £80,000 a year are in housing need—even in London—which is the perverse definition of my own council.

The problem of planning development is slightly more complicated. At the moment—and the debate is opportune for this reason—London councils are going through their process of approving local development frameworks, which replace the unitary development plans. In preparing for this debate, I looked at my own borough’s LDF, which may or may not be typical, and it appears to give good news. It seems to say that it will build 13,000 houses over the next 20 years, with a maximum of 20,000 allowable. However, when I examined those figures I found that what is actually planned goes well beyond them.

Perhaps the biggest new development under planning consultation in London is the Earl’s Court and West Kensington Opportunity Area, which the LDF says could provide about 2,000 new homes, at least in Hammersmith, over the next 20 years. The developer says it will provide 8,000 homes over the next five to 10 years. The Hammersmith town centre development, which is somewhat misnamed because it includes areas way outside the town centre, including the historic riverside—the hon. Member for Richmond Park (Zac Goldsmith) may be interested in this because he has written about it—is not one development but a string of developments along the riverside. The traditional low-rise buildings of this historic area are being converted into hideous tower blocks of luxury one and two-bedroom apartments. We have seen such developments springing up along many parts of the river on the south side of the Thames. The apartments are built principally for people coming from abroad or for those who wish to have a London pied-à-terre in addition to accommodation elsewhere. We are talking about buildings that are not just at the top of the market, but above it. The LDF for Hammersmith says that over 20 years, up to 1,000 new homes will be built in this area. Some 1,300 homes are currently being built or are under planning consideration for this area, so that target appears to have been exceeded already.

What we are seeing in planning terms, certainly in central London and in my part of London, is a development grab. Those parts of land that might be available for affordable and sustainable development in the future are being cannibalised for luxury high-rise blocks. Some of the blocks on the riverside are up to 15 storeys, and some in the west Kensington area are up to 30 storeys or more. That is a massive increase in residential units, but they are exactly the wrong type of residential units for the local population and will not meet housing need in London. That is a scandal and a misuse of planning powers. Of my local authority, the developer of the Hammersmith riverside says:

“Now the council says it is ‘open for business’, and I think they are—that’s why the development community has embraced the new administration”.

You bet they have. Helical Bar, the developer of the Hammersmith riverside development, has a dispensation to have no affordable housing in it whatever; in fact, there will be a net loss of affordable housing because trust properties for visually impaired people will be demolished to make way for the skyscrapers.

Mr Slade, the founder of Helical Bar, gave £20,000 to the Mayor in the run-up to his election campaign. He made this very prescient comment:

“You do run the thin line of someone saying: I am doing this to have access and influence, but that was what politics was always about. It is a little unfair, but there must be 20 per cent truth in it.”

Helical Bar wants to build high-rise flats in outer London. It now has that consent on the way despite the opposition not just of the hon. Member for Richmond Park, but of almost all my constituents, who do not want to see the destruction of their living environment and of the things they hold dear. They want to see not luxury high-rise flats, but affordable homes for themselves and their children.

[Zac Goldsmith]

I absolutely share the hon. Gentleman’s concerns about the nature of this development. As he knows, I have spoken on the record about it and submitted a number of objections. However, is it not true that the decision comes from the local authority and is not one over which the Mayor has any influence at all?

[Mr Slaughter]

The developments I am talking about are of sufficient size and scale to require the Mayor’s approval, or the Greater London authority’s dispensation regarding factors such as their height and their not containing affordable housing. In addition to the town hall development to which the hon. Gentleman refers, there are other developments along the river. St George has just decided it wants to build 750 similar properties with no affordable housing in them just south of Hammersmith Broadway, and has its eye on redeveloping a council estate, which the council may wish to demolish, for luxury housing. We are not talking about not enough being done to promote affordable housing in London, or about neglect or negligence. We are talking about a concerted policy to socially engineer areas by demolition, and the removal of social housing units in London and their replacement with luxury, small high-rise developments. The ability to build in London for London’s population will not exist again for another generation. That is the real damage being done by this Tory-led Government and their creatures in town halls around London. I am afraid that that is the depressing message.

I entirely endorse what my hon. Friend the Member for Islington North said. I fear that the news, when one looks at the situation on the ground, is actually worse than inaction: it is the deliberate destruction of the consensus on housing policy that has sustained this country for many decades.