Housing: Young People

Lord Jackson of Peterborough Excerpts

Thursday 14th March 2024 Lords Chamber

[Lord Jackson of Peterborough (Con)]

My Lords, it is a pleasure to participate in this debate, and I pay tribute to my noble friend Lord Young of Cookham, whom I have known for over 30 years, for his persistent and indefatigable approach to campaigning on housing.

I will talk about two specific macroeconomic societal issues, and then focus on planning and some possible solutions. I will talk first about quantitative easing—I draw noble Lords’ attention to an excellent article in the New Statesman of 1 March—and how it impacts young people. Essentially, the policy of quantitative easing, developed by the coalition Government in 2013 and euphemistically described by George Osborne as “active monetary policy”, actually created an asset price boom and had very significant distributional implications, making asset owners richer, as my noble friend Earl Attlee said, and leaving many young people locked out and relatively poorer. There is a reason, of course, why the polls show that only 8% of 18 to 24 year-olds intend to vote Conservative at the election. You cannot extol the virtues of capitalism if your target market cannot eventually own capital.

In 1979, the right-to-buy policy of the Conservative Party gave ordinary working people a real stake in their future and those of their families and communities. Over the last 10 to 14 years, we have failed to develop policies which similarly deliver for working people. We have seen a collapse in home ownership over the period of the last two or three Parliaments.

On the second issue, immigration, we absolutely have to look at demand. I am afraid that I disagree with the noble Lord, Lord Best. Of course, I pay tribute to his expertise. If we are going to have a debate based on empirical evidence and honesty, and in good faith, we cannot ignore the implications of, and the massive changes wrought by, uncontrolled, unfettered immigration, whether it is illegal or, more likely, legal.

Last year, we built 204,000 homes against a target of 300,000. The French regularly build 400,000 to 500,000 homes. The Migration Advisory Committee says that a 1% rise in population generates a 1% rise in house prices. Uncontrolled immigration has a big effect on the rental market too. Net migration of 672,000 is something that cannot just be dismissed from the housing debate. In 15 years, that trend—

[Baroness Valentine (CB)]

On the subject of migration, as far as I recall, a very large number of migrants are students. I wonder whether the noble Lord would like to comment on student housing in that context?

[Lord Jackson of Peterborough (Con)]

I am going to develop my argument in terms of numbers. We are looking at an increase to the population of 6.6 million people, to 74 million by 2036. The indicative figures are that in 15 years, we are going to have to build another 5.7 million homes, or 550,000 homes per annum.

In London, 20 people are chasing every flat. Some 40% of foreign-born individuals are in the private rented sector, as are 75% of new migrants, and 48% of all social housing in London is headed by someone who was not born in the UK. That is an issue that goes to the heart of fairness. I do not think it is defensible, and it is certainly not sustainable. It is about equity and community cohesion.

I want to talk about planning. I believe that the Levelling-up and Regeneration Act 2023, although very much lauded, was a missed opportunity. The promise contained in the consultation on the National Planning Policy Framework of 2022 did not come to fruition; it was a missed opportunity. As my noble friend Lord Young of Cookham said, the Government capitulated, regrettably, to the nimby, short-termist tendency in the Conservative Party. Robert Colville of the Centre for Policy Studies was quite right when he described that decision, or the decision to reject any housing targets, as “selfish and wicked”.

We have a situation in which scores of local planning authorities have paused, reviewed or abandoned their local plans. That has rendered obsolete previous commitments to local housing targets. It has given a green light to planning committees to block development across the country. The five-year land supply test was dumped, green-belt reviews stopped, and the housing delivery test watered down. This has exacerbated the problems of capacity: many principal authority planning departments have a shortage of well-qualified, experienced and commercially savvy planners in particular, and of properly resourced planning departments.

Reference has been made to the CMA report into the state of the housebuilding industry, published on 28 February. I am glad to say that it put to rest the persistent accusation that major housebuilders are land banking; there was no empirical evidence to support that. But even if they were, surely the broken planning system is logically inherently to blame. The CMA actually said that

“the planning system is exerting a significant downward pressure on the overall number of planning permissions being granted across Great Britain … insufficient to support housebuilding at the level required to meet government targets and … assessed need”.

It made particular reference to the impact on small and medium-sized builders.

I share with the House the observations of the former Mayor of Cambridgeshire and Peterborough, James Palmer, who was also formerly the leader of East Cambridgeshire District Council. He says, quite rightly:

“Over the past 50 years the Local Plan system (or derivations of it) has failed to deliver the number of homes needed in England, yet we steadfastly refuse to change the way we plan for growth. Local Plans can create the illusion of promoting growth while simultaneously restricting housing development. A carefully drawn line in a town hall can turn landowners into lottery winners. Where developers don’t bring forward housing, landbanks arise. When landowners decide not to sell, new lines need to be drawn. What’s more, local authorities need only throw a cursory glance at what their neighbours are doing, which leads to disjointed and incoherent planning across wider geographies”.


That is a very important point.

The construction industry is still suffering a very difficult hangover from Covid, the Ukraine war, the rising costs of materials and energy, higher interest rates, and skills shortages. In my own area of the east of England, 17% of all business is construction-related—with £18 billion of output, according to the Construction Industry Training Board. Policy changes, especially in planning, have slowed down the construction of new houses, and this was predicted by the Home Builders Federation in March 2022. Professor Noble Francis, the economics director at the Bartlett School of Sustainable Construction, commented:

“There was a sharp fall in house building in December 2023 as house builders continued to focus on cost minimisation and completions for the subdued level of demand rather than starting new developments after the rise in mortgage rates in 2023 that priced out many new buyers, especially first-time buyers”.


Another issue, which we have discussed in your Lordships’ House on a number of occasions, is quango overreach. As your Lordships will know, in August 2023, the Government announced that they would legislate on the impact of defective EU laws intrinsic in the nutrient neutrality regulations. Despite a promise of a £280 million investment over seven years to ameliorate these issues, protect precious habitats, tackle the issue of run-off from agriculture and upgrade wastewater works, your Lordships’ House decided to kibosh that legislation and force the Government to abandon it. We are now in a position where 120,000 homes, according to the Home Builders Federation, have been subject to a moratorium on new builds. That means an unelected and unaccountable quango, Natural England, has stopped 41,000 new houses being built in Norfolk and 18,000 in Somerset, just as an example. In what other advanced, liberal democracy would such a ridiculous and incoherent policy be tolerated?

I welcome some of the things the Government have done in the long-term plan for housing announced last month around SME builders; refocusing on repurposing public sector land and brownfield development; giving greater weight in the NPPF to the benefits of housing delivery in areas of residential housing shortages; and other areas, such as permitted development. But I am not convinced that it is radical enough.

We need to look again at residential estates’ investment trusts. We need tax breaks for supported living for older people. We need to repurpose planning fees to sufficiently resource planning departments. We need to bring back local plans that are up to date to deliver housing. We need to introduce a presumption in favour of development in small sites. We need to abolish stamp duty for all purchases of homes with an EPC rating of B or above. Housing is a national emergency. We also need a Cabinet Minister specifically focusing on housing, as well as a housing ministry. This and previous Governments have, regrettably, failed young people, but it is not too late to begin to develop a vision and an ambition to deliver both for them and for our country more widely.

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

The noble Baroness is right, and I have heard similar stories. That is why we have the leaseholder Bill coming through, which we will be debating in just a few weeks’ time.

In 2022-23, of those reported to my department, an estimated 77% of shared ownership purchases were made by first-time buyers and 33% of those purchases were made by buyers under the age of 30—a testament to the effectiveness of the action of this Government. Furthermore, our First Homes scheme offers first-time buyers under the age of 40 a minimum 30% discount on the price of an eligible new home, helping the younger generation get a foothold on the property ladder. The noble Baroness, Lady Donaghy, asked for further detail on what the programme has delivered. I have only the top line, which is that there were 1,250 completions through the First Homes early delivery programme to the end of September 2023. If the noble Baroness wants more detail, she is welcome to come and ask me.

Through our lifetime ISA scheme, we have helped more than 56,000 account holders to become first-time buyers. More recently, we have recognised and responded to the challenging market conditions for lenders and buyers alike through the introduction of the mortgage guarantee scheme. This supports participating lenders to continue providing 5% deposit mortgages. We have extended this until June 2025 so that we can continue providing this vital support.

My noble friend Lord Young raised the question of stamp duty, land tax and cutting capital gains tax when landlords sell to sitting tenants. The Government have already taken action by cutting stamp duty during the pandemic, up to March 2025. This is reducing the financial burden on first-time buyers across the country, but particularly in and around London and the south-east, where these pressures are felt most acutely. On cutting capital gains tax for landlords’ sales to sitting tenants, this is not a policy the Government are currently considering. Taxation is a matter for the Chancellor and any decisions he takes on tax are considered, obviously, in the context of the wider public finances.

On the work of government on preventing homelessness and rough sleeping, as raised by the noble Baronesses, Lady Thornhill and Lady Valentine, I want to set out the measures we have prioritised to prevent vulnerable people—young people particularly—such as care leavers ending up homeless. In 2022 we published our cross-government strategy Ending Rough Sleeping for Good, which recognised that young people face particular challenges accessing and maintaining accommodation.

For young people with disabilities, my department, alongside the Department for Health and Social Care and the NHS, provides capital grant funding to subsidise the delivery of a new supply of supported housing, including for disabled people. Young people with disabilities who satisfy needs-assessment eligibility criteria and a means test benefit from a wider statutory duty to provide home adaptions. There are powers to provide adaptions for those who do not qualify under that duty. Under this Government, the disabled facilities grant has risen from £220 million in 2015-16 to £625 million in 2024-25—a more than doubling of the grant. This has been well received by disabled people.

When young people do find themselves homeless or at risk of homelessness, within the next 56 days they are owed a homelessness duty by their local authority. Our single homelessness accommodation programme will deliver over 650 homes and support services for young people in this situation. This is in addition to other support, including the £109 million top-up to the homelessness prevention grant for councils and an initial £6 million for rough sleeping winter pressures.

Many of our young people want to be free to move to places where they can connect their talents with economic opportunities before choosing to settle down. This is where the private sector steps in. Increasing security and quality in the private rented sector requires ambitious reforms and the Government have stepped up to deliver. We have introduced the Renters (Reform) Bill, which will support tenants with a raft of measures, including applying the decent homes standard to the private rented sector for the first time and abolishing Section 21 evictions. The Bill is awaiting Report in the other place, which is subject to parliamentary scheduling, and it will be announced in the usual course of business management. I say to the noble Baroness, Lady Thornhill, that the proportion of private rented sector households has remained relatively stable for nearly a decade, and the number of renters has doubled since 2004.

For those in the social rented sector, we have enshrined in law, through the Social Housing (Regulation) Act, a rebalancing of the relationship between landlord and tenant. We are ensuring that landlords are held to account for their performance—an important step in improving the quality of houses across the market, which was an issue raised by the noble Baroness, Lady Valentine. We are creating a housing market fit for the future.

The Leasehold and Freehold Reform Bill will reform the outdated leasehold system in this country. From 2025, the future homes standard will future-proof our homes, ensuring that new homes produce at least 75% less CO emissions than those built to previous standards. We know that making long-term changes takes time to deliver, and the Government are doing all they can against a challenging economic background to ensure that the younger generation can access affordable, safe and high-quality housing.

Following the £188 million allocation to the housing projects in Sheffield, Blackpool and Liverpool at the Convention of the North on 1 March, last week’s Spring Budget allocated over £240 million to housing projects in London, an area where affordability is challenging, particularly for young people, as we have heard today.

The noble Lord, Lord Best, my noble friend Lord Young of Cookham and others brought up intergenerational housing. I totally agree with them that we need better older people’s housing and more choice for older people because, if we give them better housing and more choice, we can start to move the housing stock around. Some local authorities are doing that really well, but more can be done. The Government’s independent older people’s housing task force is looking at housing for older people, and it will make its final recommendations to Ministers this summer.

I hope I have answered as much as I can—

[Lord Jackson of Peterborough (Con)]

There is consensus across the House, among Members of all parties and none, that we should reinstate the local housing targets. Nevertheless, 65 local planning authorities have frozen their local plans. Is my noble friend in a position to explain or tell the House when the Secretary of State is likely to invoke his statutory powers to force those local planning authorities to come up with local plans?

[Baroness Scott of Bybrook (Con)]

I cannot say when he will do that; all I can say is that the Act is now in statute. The NPPF is now being updated, so we will encourage and support those local authorities to get the local plans in place as soon as possible.

I am being told I have run out of time, so, in conclusion, we fully recognise the unique housing needs of young people and the importance of homes to their lives. The Government are absolutely committed to ensuring those needs are met, whether that be through home ownership, the private rented sector or social housing. This debate has served as a valuable reminder of the critical responsibility we share in supporting the next generation and making sure that the housing market works for all. I once again thank my noble friend Lord Young of Cookham for bringing forward this debate and all noble Lords for their contributions today. I look forward to continuing discussions and working with noble Lords on issues relating to the housing needs of not just our younger generation but the whole of our communities.