Housing: Young People

Lord Young of Cookham Excerpts

Thursday 14th March 2024 Lords Chamber

Moved by

[Lord Young of Cookham]

That this House takes note of the housing needs of young people.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to the usual channels in my party for selecting this debate, as my contributions on this subject have sometimes caused distress. I am also grateful to those who have put their names down to speak on a subject whose salience is rising up the political agenda, and I look forward to an informed and constructive debate.

I want to outline what steps might be taken in the next Parliament to improve housing outcomes for everyone, but particularly for young people. They have been one of the principal casualties of the housing market, which the Government themselves admitted in their White Paper seven years ago was broken and which is now, at best, convalescing. The foreword to that White Paper said:

“Soaring prices and rising rents caused by a shortage of the right homes in the right places has slammed the door of the housing market in the face of a whole generation”.


In 1989, more than half of those aged 25 to 34 had a home of their own; now that figure is about a quarter. The most common form of living for those of that age is with their parents. Shelter tells me 45% of renters aged 16 to 24 spend half or more of their income on rent. Many would spend far less with a mortgage on the same property, but the high rent means that they cannot afford a deposit—and, not always mentioned, they are now getting much less space within each flat.

There are wider political consequences from this. That generation of young people have parents and grandparents who share their concern—and may indeed be sharing their home—and will be looking for solutions when they vote later this year.

I was lucky enough to have done nine years as Housing Minister, in four Parliaments, under seven Secretaries of State—counting the noble Lord, Lord Heseltine, twice—and with four Permanent Secretaries, confounding the usual “Yes Minister” caricature of transient politicians and permanent civil servants. I draw on that experience in my contribution to this debate, recognising that I got many things wrong.

The first job of the Prime Minister after the election is to make it clear that the Housing Minister will be there, barring accidents, for the whole of that Parliament. That was not unusual. In my first nine years in the other place, there were two Housing Ministers, each lasting the whole Parliament, and both were highly effective. Since 2010, there have been 16. It is important to understand why this is a serious mistake.

An effective Housing Minister who will drive through the radical changes that are needed must build a strong personal relationship with the key players: the National Housing Federation, Homes England, the LGA, the Chartered Institute of Housing, the Town and Country Planning Association, the Home Builders Federation, and many others, including the think tanks. You cannot subcontract the building of those relationships to civil servants. That takes time.

Those relationships will be crucial in getting a picture of the challenge, but also later on when one needs to draw on trust and good will to get reform through. You need to know which go-ahead directors of housing are making the weather, which housing associations have some interesting solutions, and which group of talents is turning around a difficult-to-let estate. There are some really good people in housing today.

More than that, you need to understand the complexities of public expenditure—you need to know your AME from your DEL—and you need to watch the Treasury like a hawk. That requires an understanding of Treasury theology as well as economics. If the Housing Minister is ever in doubt about what to do, he should consult the person who knows more about housing and has done more for housing than anyone else: the noble Lord, Lord Best. To make my point about continuity: who has been the most successful Cabinet Minister in this Parliament? Ben Wallace—he was there for four years.

The key word in the White Paper I mentioned, Fixing Our Broken Housing Market, was “market”. A market is where buyers and sellers meet and where supply matches demand. A good market would make it easier for people to move, promote mobility and make it easier to buy and sell. The group that would benefit most from this extra mobility are those waiting for their first home.

There are 3.6 million homes with two or more spare bedrooms. Many older people want to trade down or to rightsize, freeing up their homes for young families. Professor Mayhew estimated that we need 50,000 homes for older people who want to rightsize, but we are only producing 8,000. An older person rightsizing triggers a chain of movements, promoting labour mobility and making better use of the stock we have. The planning system should be more proactive in securing the right mix of new builds. The best way to help younger buyers is to help older buyers.

Stamp duty is an important impediment to the market—£15 billion of friction—and then there is the hassle of house purchase. Last year, I sold my car. I took a photo, uploaded the details on a website and had an acceptable offer within hours. Later that day, a flat-bed truck arrived and, as the car was driven up the ramps, the money arrived in my bank account. What comparable progress has been made using modern technology to simplify house purchases? None, since I bought my first home 60 years ago.

Many young people have to rent, but private landlords are leaving the market, due to high interest rates, fears about impending legislation, a less attractive tax regime and new energy efficiency standards. The NRLA says that private landlords are more than twice as likely to sell properties than they are to purchase them, exerting upward pressure on rents. We should say to private landlords that, if they sell to their tenant, no capital gains tax or stamp duty will be payable—not a right to buy but an incentive to sell. That would have a dramatic effect on home ownership for young people, almost certainly lowering their housing costs and enabling them to move up the ladder.

I support the Renters (Reform) Bill—by the way, what has happened to it?—but it will reduce supply. The Bill should have been accompanied by measures to increase supply and put the private rented market on a more sustainable basis. Other countries have a different model, which we should progressively adopt. In Europe, long-term institutional finance provides secure, well-managed rented accommodation; in this country, it provides 2% of the rented stock. We need to progressively reduce the overdependence on the private landlord, who can release capital only by selling, and get the pension funds and insurance industry to invest in what, historically, would have been a better investment than equities. The next Minister needs to get those institutions in the room with the Treasury and unlock the barriers to that investment.

I mentioned selling to the tenant, but what about the deposit? I read in the Times that there is £2.5 trillion tied up in housing equity. That is £2,500 billion, money will eventually end up with children and grandchildren, but not when they need it. I understand all the caveats about equity release and the need to take advice, but the product today avoids any negative equity on death and can reduce inheritance tax. People are cautious about it because of the unknown care costs. Many more would take that option, and help young people buy, if the next Government implement the recommendations of the Dilnot commission in 2011 and cap care costs. Again, focusing on the older generation helps the younger ones.

Many young people will not be in the fortunate position of having that help and will need access to social housing, adding to the 1.2 million people on the waiting list. My party needs to overcome its residual resistance to social housing. The old norms that trade unionists and council tenants voted Labour while home owners and professional people voted Tory have been blown out of the water by Brexit and the 2019 election. In 1953, 250,000 council houses were built and my party won the next two elections. What regime encouraged the local authorities, now going bankrupt, to invest in speculative shopping centres and office blocks when they could have been building houses?

A new Administration should look at the role of social housing for young people. Forty years ago, a young couple could put their name on the waiting list and be reasonably confident that, in due course, they would get to the top. Today, if that young couple are sharing with in-laws or living in rented accommodation, they are not likely to have that ability.

Social housing is focused, rightly, on priority groups: those threatened with homelessness—increasingly under Section 21—threatened with domestic violence, in poor health or living in very poor conditions. Then there is additional pressure from those from Ukraine, and as the Home Office stops using hotels for asylum seekers. Access to social housing has become an accident and emergency service. This raises the sensitive question of life tenancies. If a family face a crisis and then, thanks to social housing and the support that goes with it, rebuild their lives and other options become affordable, should they make way for another family who face the crisis that they once faced? I am not suggesting making them homeless again, but perhaps some nudges.

This is relevant because, the last time I looked, a young couple on the waiting list is eight times more likely to be rehoused through a re-let than through a new build. Increasing the flow through social housing will help them. There is a role for an expanded tenant incentive scheme to help families move on, securing a re-let for those on the waiting list at a fraction of the cost of new build and far quicker.

We need to build more new homes of all tenures to meet demand from first-time buyers. Veterans of the LUR Bill will know my views about planning, confirmed by last month’s CMA report, which referred to a

“complex and unpredictable planning system”

with “under resourced” planning departments. There is no need to increase public expenditure to unblock the system—just allow planning departments to recruit the staff they need and cover their costs with application fees.

Then my party has to confront the nimbys within our ranks. Yes, we may lose a few votes to the ever-opportunistic Lib Dems if unpopular development goes ahead, but we will lose far more if we do not have a coherent housing policy. We should recognise that the green belt is not sacrosanct and should reinstate local authority targets. You cannot rely on the good will of local government to provide the homes we need.

I do not have time to mention all the relevant factors: the tension between second homes and first homes, skill shortages in the building sector, the dominance of large builders, slow buildout rates and getting the balance right in social housing between new build on the one hand and maintenance of existing stock on the other. I hope other noble Lords will fill the gaps. Nor have I mentioned the many good things this Government have done, a deficiency that I know my noble friend, whose commitment to good housing I applaud, will remedy.

Finally, the next Minister will need what I call a following wind—public opinion. In 1966 “Cathy Come Home” did for homeless young families what “Mr Bates vs The Post Office” has done for sub-postmasters. It mobilised public opinion, drove housing up the agenda so that political parties had to respond, and gave birth to Shelter.

My most formidable opponents—Des Wilson and Sheila McKechnie of Shelter—were also my greatest allies. Their tireless, well-targeted and well-informed campaigning was deeply uncomfortable, but it strengthened my bargaining position with the Treasury and more broadly within the Government. We will need that following wind to open the door that was slammed in the face of a whole generation. I beg to move.

--- Later in debate ---

[Lord Young of Cookham (Con)]

My Lords, I am grateful to all those who have taken part in this debate. It could go on until 6.26 pm, but the House will be relieved to hear that I plan to speak for just a couple of minutes.

The noble Baroness, Lady Donaghy, quite rightly mentioned Lord McKenzie of Luton, who shadowed me when I was on the Front Bench and asked the most difficult questions with the utmost courtesy. We all miss him. She rightly pointed out the illogicality of current ratable values and the HMO loophole, which does need to be looked at.

I am grateful to the noble Baroness, Lady Thornhill, for her comments, particularly on the need to arrest the drift from long-term lets to short-term lets. There are a number of provisions in the pipeline, and I know she will be keeping a close eye on that.

My noble friend Lord Lilley raised the issue of demand. He was right to do so if one is talking about the housing market, where supply and demand are relevant. Where I think I agree with the noble Lord, Lord Best, is that one needs to raise housing in immigration debates as well as raising immigration in housing debates. I know he and I will both pursue that.

The noble Lord, Lord Best, was also right to mention the disenchantment of young people at the current housing position: it is feeding into disenchantment with politics as well as disenchantment with housing. I am grateful, as always, to the noble Lord, Lord Best. I thought the point he made about the public expenditure benefit of home ownership because it reduces the housing benefit costs of older people was a valid one. I hope the Treasury can feed that into its computer when it looks at future expenditure plans. The noble Lord also rightly mentioned the Letwin review, which had a whole lot of worthwhile policies which I think should be pursued.

We welcome my noble friend Lord Attlee to housing debates, with his robust common sense. We learned that the planning system was a conspiracy to keep the rich rich, but I agree with him on what he said about some of the complexities of the planning system.

I am very grateful to the noble Baroness, Lady Valentine, who focused on temporary accommodation and its huge cost to local authorities; and on the disruption to the families who are caught up in the moves, including the disruption to education. She was right to mention housing benefit. I think she was the only person in the debate to mention housing benefit, which is highly relevant to any debate on housing. She also reminded us of the good people who are doing heroic work in voluntary organisations on the front line.

I am grateful to my noble friend Lord Jackson. On nutrient neutrality, I was slightly surprised after the defeat in your Lordships’ House that the policy was not overturned in the other place, but my days of party management are now way behind me, so I will not go too much into that.

I am grateful to the noble Lord, Lord Shipley, for endorsing the need for the planning departments to have the resources that they need, the need to have up-to-date plans and, of course, the need to increase supply.

The noble Baroness, Lady Taylor, reminded us of Housing First and what we could do when we really had to and how we got everybody who was sleeping rough off the streets. That was a fantastic response by local authorities and voluntary organisations. She agreed with me on the need to reinstate local authority targets.

Finally, I am very grateful to my patient noble friend the Minister, who provided an important balance to our debate by setting on the record the Government’s many achievements. She dealt, as helpfully as she was able to do within the confines of her brief, with all the issues that were raised.

In conclusion, this debate has been a rich quarry for material for party manifestos. I beg to move.

Motion agreed.