Madeleine Moon
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Tony Baldry
The point that I am trying to make is that at present we have an artificial division in the housing market. On housing estates in the right hon. Gentleman’s constituency and mine, families that would have been the anchors of traditional 1950s estates on which those of our age grew up—working families from Cowley and so on—find themselves in an insecure position as assured shorthold tenants. Whether the categories of tenancies and tenants are endurable in the 21st century is a legitimate debate. I am trying to understand exactly what the Government are proposing. I am seeking knowledge, because our councillors and constituents will soon come to us asking for an explanation, and I would like to be able to provide one.
That takes me to housing benefit, and I have some questions for my hon. Friend the Under-Secretary. I have heard my right hon. Friend the Minister for Housing and Local Government say that the Government intend to increase rents in both the private rented sector and, particularly, the social sector, to nearer 80% of market rents, but families will be able to access housing benefit. I am not clear about this; I need an explanation of the suggestion that a greater return from housing investment would attract more investors from the private sector—banks and so on. That may be a worthwhile objective, but if that is funded by housing benefit, I do not understand how it will reduce the housing benefit bill. I want to understand how those two policy imperatives relate.
When public finances are tight, we cannot pretend that we can do as Harold Macmillan was able to do in the halcyon days of the 1950s and build as many new homes as we want. Sadly, that option is not available to us, but if we are not to have a frustrating non-debate, the more information that the Government can provide about what is intended, the better.
Tony Baldry
I am about to finish, because I know that other right hon. and hon. Members want to speak.
The Government have given a lot of information about the new homes bonus, and I think we all understand it. What we now want to understand is: what is intended for the relationship between social tenants and private sector tenants; how the Government will go forward; the nature of the various new tenancies, including under the affordable rent scheme; and how housing benefit rules will relate to those who pay higher rents, so that we can attract investors into the housing market.
Mrs Madeleine Moon (Bridgend) (Lab)
I apologise to hon. Members, because I have another appointment that I cannot get out of, so after making my presentation, I must leave. I request that hon. Members accept my apology for that.
The hon. Member for Banbury (Tony Baldry) has said that it is in everyone’s interest to keep the housing market moving and commented on the huge waiting list for social housing in his constituency. In some areas of my constituency, the wait for social housing is up to 14 years; in one of my local towns, people can wait 14 years to get into the social housing market. The problem has been exacerbated by the selling of council housing, which has reduced the number of houses locally. We do not have any council housing stock. We had a housing stock transfer and all the stock went to a social housing landlord—Valleys to Coast. I met with it recently to discuss the success of the public-private approach to funding housing associations and how that could be undermined by a combination of the drastic changes to housing benefit and the knock-on effect on the confidence that lenders will have in the social housing sector. The success is based on housing associations having been previously perceived to present a low risk to lenders.
In a letter to my local housing associations, the Council of Mortgage Lenders has said that it estimates that
“housing benefit typically underpins 60% of rent income for housing associations.”
That means that housing associations have a steady and robust income flow, which helps them to attract new investment. The CML has stated categorically to my local housing associations that changes in the payment of housing benefit
“will result in a loss of confidence and appetite for lending to and investment in the sector.”
The proposed changes mean a squeeze on everyone concerned: the new tenant facing a rent increase to up to 80% of the market rate, current tenants coping with the impact of the benefit cap and housing associations facing difficulties in securing investment because of a loss of confidence in their sector. Confidence in the sector is being undermined, yet somehow the Government believe that thousands of new homes will be built in the next four years. In my view, the cuts will fundamentally undermine confidence in a successful sector and condemn thousands of tenants to a lifetime of poverty. The chief executive of the National Housing Federation summed up the result of what has been announced by saying that
“it shows that providing affordable housing is no longer a government priority.”
Before I came into the House, I worked for many years in social services. I am ashamed to say that I remember when social workers took children into care because their families were homeless. I never want that to happen again, but I am now living in fear that it will.
One of my constituents took the challenge of moving out of social housing and took out a mortgage with Redstone. When he took it out, it was not at a bad rate—5.15%. He then, as happens to many people, became unemployed. He lost his job and has struggled since to find employment. Unfortunately, his payments have now been reduced because of the change in mortgage interest payments. His mortgage payment is £158 a week, but he now receives only £94 a week, leaving him with a weekly shortfall of £63 a week. However, his benefit support is only £64 a week. He has been told by Jobcentre Plus to go to the mortgage lender. The mortgage lender has sent him back to Jobcentre Plus. He is trapped. He is unable to sell. The mortgage cannot be met. He faces repossession and losing his home. I have written to Redstone, asking what it can do to help.
I used to spend much of my time in my surgeries dealing with people who were desperate to get into social housing. Increasingly, I see people who have made a decision to try to get into the market living in fear of losing those market-based homes because they are in a housing trap. That is what worries me most. At every turn, the lowest-income people in this country face a trap that will lead them into homelessness. Labour Members are desperate to avoid that. I hope that the Government are listening and will address the housing needs of those families.