Lord Palmer of Childs Hill
Main Page: Lord Palmer of Childs Hill (Liberal Democrat - Life peer)
Lord Palmer of Childs Hill (LD)
My Lords, first I must declare my interest as the chairman of the advisory board of the Property Redress Scheme. It is clear that there is a shortage of housing—that has come through in the words of every other Peer who has spoken. The Government’s response is to make mortgages easier to obtain and to propose the sale of housing associations properties to their occupiers. Let it be said clearly that neither of those profound announcements increases housing supply by even one unit.
On mortgages, 20% of first-time buyers will be paying off their mortgage beyond the age of 65, which is a big increase from a few years ago. With all the Government’s boasts about housing, the Office for National Statistics says that home ownership fell for the first time in a century in 2011, while renting and overcrowding increased. The policy of right to buy, particularly of housing association properties, has been mentioned by other noble Lords. But to extend it to 1.3 million housing association homes with discounts, as the noble Lord, Lord Best, said, of up to £104,000 costs at least £5 billion—and not one unit more is made available.
Will the Minister say in detail how the sale of housing association homes for 30% less than their value can conceivably be enough to build a new home? Just selling off a few expensive homes—which again reduces the housing stock—cannot be an answer. Although I thank the noble Lord, Lord Whitty, for introducing this debate, I take issue with him on one point. He said that he had always supported the right to buy. I have always been against the right to buy, not because it gives a bonus to those who live there but because it reduces the housing stock available to the poorer people in society. That is what was and still is wrong with the sale of council stock and is even more wrong—in spades—with the sale of housing association properties.
In housing, one of the buzzwords is “regeneration”. That often means demolition of large tranches of council-owned housing that is replaced with a mixture of private homes and so-called “social housing”, often at high density. A point was mentioned in passing by another noble Lord about properties such as these that are compulsorily acquired for leaseholders and some freeholders. What happens on estates that I know is that when there is regeneration and people are forced to move, they are not given enough in the sale of their properties to buy a property on the same estate and therefore have to take out additional mortgages or move further away. I trust that the Government will look at some way in which people who are forced to move because of regeneration can at least have a property in the same development without having to borrow more.
Another buzzword used in the title of this debate is “affordable” housing, but “affordable” means different things to different people. To me, it has always meant social rented housing, which is the obvious way of providing affordable housing. There is also intermediate housing, affordable housing ownership and all the various different schemes where you buy a small part of the property, sometimes at a discount, with a covenant that you have to sell it at 80% of its value. But this is fiddling at the edges of affordable housing for those who really need it. This Government have a paranoia about private home ownership, which is often the nail in the coffin of affordable housing.
I now move beyond affordable housing to introduce another element into this debate that has not been mentioned so far. How do we extend this figure of 200,000 or 300,000 properties without relying on brownfield sites or the other methods that I and other noble Lords have mentioned? Perhaps the development of garden cities is the way forward to tackle the deficit in the housing stock. Communities need to provide proposals. I hope that the Minister can say what has happened to the proposal of the Liberal Democrats when in coalition to invite bids for £1 billion of investment that was announced in the Autumn Statement 2013 to unlock local housing schemes for, at that stage, more than 1,500 homes. The funding was intended to unlock up to 250,000 new homes between 2015 and 2020 in locally led garden cities. If people locally want the schemes, money should be available. They could be a great boon to the localities of various parts of the country and would provide additional housing in larger amounts than by tinkering with odd bits of brownfield site and increasing housing density, which impinges on the way of life of those who live within them.
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.
Lord Palmer of Childs Hill
Will the Minister say how the Government will replace them with 30% of the proceeds?
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.