Affordable Housing

Lord McKenzie of Luton Excerpts

Thursday 25th October 2018 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I draw attention to my interest in the register. Like others, I welcome this debate, initiated by the noble Lord, Lord Shipley. My starting point was to put this debate into the no-brainer category, although I have been forced to reflect a little on such a simplistic approach by our Library briefing, which looks in more detail at the definitions of affordable housing and the types of affordable housing included within it.

Factors influencing the availability of affordable housing include stock and building levels, rental and purchase prices and household formation. We have a plethora of housing statistics. The most recent I have seen are to March 2017 and identify the number of affordable homes delivered in 2016-17 to be 41,530. This comprised just 5,380 for social rent, 24,000 for affordable rent and 11,800 for intermediate affordable housing. This last category includes 2,060 affordable home ownership, 8,810 shared ownership and 940 intermediate rent levels.

So the term “affordable housing”, covering all of that provision, does not carry the tag that it is universally affordable. Affordable rented housing let by local authorities or private registered providers of social housing is subject to rent controls of up to 80% of the local market rent. The noble Lord, Lord Shipley, dealt with this. In some cases, this puts so-called affordable rents way beyond the reach of most families.

In Luton, rental costs in the private sector are significantly above affordable levels, and 22% of homes are now in the private sector. The loss of a private sector tenancy, in Luton as in the rest of the country, is the main reason for homelessness. Another challenge in Luton is the gap between local housing allowance rates and actual rents. The local authority has mapped these matters, showing that a household on median income could not afford anything larger than a one-bedroom property in the private rented sector—a family in a one-bedroom property. Families looking to rent a three-bedroom home at average market rents need to be within the top 30% of incomes in the town for it to be affordable. Luton is by no means unique in facing these challenges. The briefing from Shelter, referred to by others, tells us that 268,000 people are now homeless in England, including 123,000 children. Some 80,000 households are living in temporary accommodation, and 1.2 million households were on council waiting lists last year.

In what is now my home town of Luton, homelessness is a significant challenge, with more than 1,000 households currently living in temporary accommodation and more than 12,000 currently waiting for affordable housing. Last year, only 551 homes became available for letting, and only 10 homes for the 579 families waiting for four-bed or larger accommodation.

All of this supports the argument in favour of more affordable housing, particularly social housing, which others have mentioned and which, Shelter asserts, is the most effective way of reducing levels of homelessness and taking the pressure off the housing benefit system. Its analysis shows that, nationally, the private rented sector has more than doubled over the past 20 years, with private rents rising 60% faster than wages. Home ownership has, as we know, declined.

Shelter also argues for changes to planning legislation, which, it asserts, gives too much control to landowners and developers over what gets built and who takes the profit. The Minister may care to comment on this. Could he also say how he thinks the duty to co-operate is working, especially given the welcome opportunities provided by the lifting of the local authority borrowing cap, albeit not just yet?

Despite what seems to be complacency on the part of eminent economists, I submit that the extent of our housing crisis is best judged by those who suffer the misery of homelessness, dilapidated and rat-infested accommodation, high rents and diminishing prospects of home ownership.

The noble Lord, Lord Shipley, is right to call for more affordable housing and a related strategy. I think that my noble friend Lord Whitty has written a big chunk of the latter for him.