Housebuilders

Lord Hunt of Wirral Excerpts

Thursday 11th January 2018 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I first draw attention to my interests as set out in the register, in particular as a partner in the global commercial legal firm of DAC Beachcroft. We are grateful to the noble Lord, Lord Best, for enabling this vital issue to be discussed. I am delighted to see my noble friend in his place, and I know he has no illusions about the scale of the challenge we, as a nation, now face. In their housing White Paper just 11 months ago, the Government candidly acknowledged the housing market as “broken”.

Just as the First World War was breaking out, the American poet Robert Frost mused that home was:

“Something you somehow haven’t to deserve”.

Whatever would Frost have made of the UK housing market today? In just two decades, the ratio between the average cost of a home and average earnings approximately doubled, and the social and economic consequences are far-reaching. Housebuilding in the UK has been on a long-term downward trend for almost half a century now, despite a rising population. The decline has been reversed very recently, with more than 500,000 new homes in the past three years, but the challenge now is: how do we sustain that?

Undoubtedly, one of the damaging developments in recent times has been the stark decline of smaller housebuilders. About 60% of new homes are being built by just 10 companies. The situation is primarily and principally a consequence of the planning system itself so, as we seek greater diversity, I strongly welcome the home building fund, specifically designed to support small, independent builders. The Help to Buy equity loan scheme is also an excellent innovation. Builders are private, commercial companies, but they operate within a highly constrained and regulated market. They are often hampered by a proliferation of pre-development start conditions. It would be helpful for the Minister to set out what the Government are doing to help developers cut through this red tape.

Further, more can and should be done to release further public sector land for development. The Letwin review into build-out rates is welcome, but we all know one major source of delay to housebuilding is a lack of infrastructure. To pump prime the sustainable settlements we all want to see and to make them viable, we need substantial public investment in major, off-site infrastructure, not least public transport networks. Perhaps the Minister might like to explain what the Government are doing to ensure that essential infrastructure is built up in the right place, at the right time.

There are other market failures, too. In light of unfair leasehold practices, might the Minister give us an update on what progress the Government have made on tackling abuses of leasehold? There is some recent evidence of a decline in customer satisfaction with new-build homes. What are the Minister and his team doing to help bring everyone up to an acceptable standard of design?

The housing market will work effectively only if national and local government, the public and private sector, and large and small housebuilders work together in a positive, public-spirited partnership. I strongly welcome the constructive approach the Government are taking to the broken housing market, and I hope colleagues from around the House will seek to work with the major players in the housebuilding industry in that spirit of partnership to deliver the homes that our people need, and, in the spirit of the late, great Robert Frost, to deliver the homes our people deserve.