Foreign-owned UK Property
Debate between Mark Prisk and Simon Hughes
The Minister for Housing (Mr Mark Prisk)
I congratulate the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) on securing a debate on this important matter and on offering, as usual, a range of ideas. I received his shopping list—thankfully it was not confused with Mrs Prisk’s shopping list, which might have been awkward—and take it in exactly that vein, as a set of positive suggestions. It recognises some of the challenges, some of which I will seek to answer. I also undertake to reflect in detail on his list’s itemised elements, rather than seeking to do so in the remaining 11 minutes.
The right hon. Gentleman has a strong record of speaking eloquently and frequently about housing stress in London. I will preface my remarks by looking at the housing market as a whole and then focus on the question as it relates to London, because I think that is where the heart of the problem lies. For too long now, regardless of which party has been in government, our housing markets have been dysfunctional. From my political background, and my professional background as a surveyor, I think that this country has probably built only half the homes we need year on year for perhaps a generation.
As the right hon. Gentleman rightly said, that has caused a long-term housing shortage and, with it, significant social problems, and that is especially true in Greater London. That is why the coalition Government are determined to take a different approach. Our housing strategy seeks to be comprehensive and to address both supply and demand and both freehold and leasehold, and it seeks to start to reverse the loss of 421,000 affordable homes that, sadly, we saw under the previous Administration. It is why we are reforming the planning system to speed up the development process, why we are unlocking large sites to create lasting settlements, and why we are building over 170,000 more affordable homes. It is also why we are seeking to create a bigger and better private rented sector that gives tenants greater choice and quality.
At the same time, we are supporting demand for new homes through the Help to Buy equity loan scheme. Boosting demand matters, especially after the record lows of recent years. I believe that not just because I am a passionate supporter of home ownership, but because a rise in demand gives builders the confidence to accelerate building and can boost overall market supply, including of affordable homes. That is an important point about how the flow of cash and investment helps the market as a whole, a point I will return to in a moment.
On the specific question of foreign investment in housing, it is natural to look principally at London. We have to recognise that London, as the right hon. Gentleman correctly said, is a truly global city; perhaps it is the global city. It has not only the fastest growing economy and population in the UK, but immense international appeal. I think that Members on both sides of the House recognise that as a highly desirable position to be in.
London’s success is in part the result of our open and free markets. Being a global city brings many economic benefits, with wealth creation and inward investment in jobs. Only a week or so ago the Mayor announced the securing of £1 billion of Chinese investment in the area that used to be covered by the old London Docklands development corporation but is now an enterprise zone, which is a very welcome long-term investment. The preparedness of others to invest here is a vote of confidence both in this country’s current economic strategy—that of the coalition—and in London’s future. I think that that openness is also vital to the character of London. It is a diverse city with a fantastic range of influences and cultures, and that is something to be welcomed.
As a result of that, the housing market in London is quite different from the housing market across the rest of the country. Across the rest of the UK, domestic demand has suffered, with mortgage constraints and the difficulties builders have had in securing development finance, but in London the availability of foreign investment has kept development going. It has generated the cash flow that developers need to progress schemes.
The right hon. Gentleman mentioned research. A recent report by the Greater London authority looked at barriers to housing delivery. It estimated that in prime London markets—the very highest—up to 75% of buyers are from overseas, and across London as a whole approximately a third of buyers are foreign. The report goes on to note that
“construction activity demands investor sales—many, if not most, major London residential schemes only commence due to the expectation of the sale risk being mitigated by the chance to sell to UK-based and overseas investors.”
We should also pay attention to what developers say. Tony Pidgley of Berkeley Homes recently said that to try to curtail foreign investment sharply is unrealistic, because it is only through such funding that Berkeley and others can build more homes and affordable homes. Before turning to the specific matters raised by the right hon. Gentleman, I will quote Tony Pidgley, who says:
“Basically most sites that Berkeley are building are a third affordable, a third goes abroad, and a third to the UK market”.
He goes on to say that without foreign investors,
“London would be worse off and we would have fewer affordable homes and fewer private homes.”
I say to the right hon. Gentleman that I totally understand the sense of frustration and challenge that local authorities and, indeed, local people may feel about this issue, but if we seek to curtail inward investment in a crude or ill-defined way I think we can both agree that it would lead to a significant set of unintended consequences.
Simon Hughes
I will be brief, because I know the Minister has other things to say. A report that is about to be published will show that, sadly, the figure given by Tony Pidgley of a third is much lower in reality, both in London and across the UK. Although that may be the theoretical quota, in my borough the figure is much lower and I fear that nothing like that is being delivered, because, to be blunt, companies get more money out of having fewer affordable homes.
Oral Answers to Questions
Debate between Mark Prisk and Simon Hughes(11 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Prisk
It is true to say that home ownership fell to a record low under the last Labour Government. That is a record that the Opposition need to bear in mind. The long-term funding question that the hon. Gentleman raises is important. However, the money we are putting in—the £10 billion for new rented homes and the £19.5 billion for affordable homes—is something that, sadly, we did not see when the last Labour Government were in office.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Will Ministers look at the idea of helping first-time buyers by allowing local authorities, particularly in cities including London, to designate areas where people should not be allowed to buy residential housing unless it is for their personal use?
Housing
Debate between Mark Prisk and Simon Hughes(11 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text
Simon Hughes
I welcome the Minister to his new post and the Government’s commitment to delivering the housing that Britain needs. May I alert him to one issue we need to address? Recent figures show a lot of investment in housing that is for use not by occupants, but as investments by companies around the world. Properties are being built and bought, but not put into use. We need to ensure that the properties that will be built will be available for people to live in, and not held empty as investments to make money, which often goes abroad.
Mr Prisk
That is a perfectly sensible point, but I want to look at it in a little more detail and get to understand the issue. I am a chartered surveyor, so have perhaps the dangerous quality of a little knowledge of the subject I deal with as a Minister, but I want to ensure I understand the aspect to which the right hon. Gentleman refers, because the way in which the market works has changed.
With respect to interventions, many hon. Members wish to speak in the debate, so I shall make some remarks on the important issue of homelessness and then conclude. We want to ensure that we tackle homelessness and the problems of the most vulnerable. As the right hon. Gentleman and other hon. Members have said, the problem has been with us for many years. All Governments need to ensure that they are positive and determined to tackle the problem, but they also need to reflect on the fact that outside issues and complex causes underlie homelessness. I want to look, for example, at ex-service personnel and other groups with regard to homelessness, even if the Government have made important steps before I was able to take on the role of Housing Minister.
It is important to bear in mind that the statistics are not quite as bad as the hon. Member for Birmingham, Erdington painted—he was a little unnecessarily partisan. The statistics show us that homelessness is half the level it reached under the previous Labour Government and that it remains lower than in 28 of the past 30 years. I am under no illusion that there are things to do, but we have one of the strongest safety nets in the world to protect families and vulnerable households from losing their home. In addition, through the Government’s measures, councils have been able to help more than 13,000 vulnerable households to secure alternative accommodation when faced with the prospect of homelessness.
We are already taking action to help 50,000 households in temporary accommodation—all hon. Members will know of that challenge from constituents in that situation who have come to see them. We have consulted on a new power that will allow local authorities to use the private rented sector to house homeless families. That will mean shorter waiting times for homeless households and less time in temporary accommodation. Those with young children in particular will want the time they spend in temporary accommodation to be reduced—that is important.
I shall conclude now in order to allow as many Back Benchers as possible to contribute to the debate. The Government are working hard to substantially increase the supply of housing, from the low point of 2008-09. Our housing strategy combines practical measures with an understanding that Whitehall cannot, and should not, try to control the housing markets. Our work in helping first-time buyers, in freeing up the planning system and in unlocking stalled sites is all part of our commitment to enable more homes to be built. But we are not complacent. The global financial squeeze is continuing to impact. That is why, later this week, the Government will have more to say about how we can accelerate the progress already made in housing and infrastructure.
By tackling the deficit, we have built the foundation for a sustainable economy. We are now focused on getting houses built, providing more affordable homes and making sure that home ownership is affordable once again. I commend the Government’s amendment to the House.
Oral Answers to Questions
Debate between Mark Prisk and Simon Hughes(12 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
The right hon. Gentleman raises an important industry and an important location. The local enterprise partnership is doing very well in that area and we are encouraging offshore energy through the work of UK Green Investments. If there were additional points in his comprehensive question, I know that the relevant Ministers will be happy to deal with them.
Simon Hughes (Bermondsey and Old Southwark) (LD)
T7. The Government’s introduction of the national careers service is welcome. The Business Secretary has made it clear that there must be face-to-face careers advice for targeted groups of adults. Will the Department try to win the argument across Government, including in the Department for Education, that face-to-face careers guidance is vital for everybody, and that mentoring for all young people in an important complementary project?
Oral Answers to Questions
Debate between Mark Prisk and Simon Hughes(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Simon Hughes (Bermondsey and Old Southwark) (LD)
8. What steps he plans to take to address executive pay and reduce rewards for failure.
Oral Answers to Questions
Debate between Mark Prisk and Simon Hughes(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Prisk
It is nice to have the hon. Gentleman back on planet Earth. It appears that he has been away from it for a long time. We have heard about the work that the Government are doing on apprenticeships, we have seen the investment in infrastructure, and there is a positive story to tell. Why cannot the Labour party understand that?
Simon Hughes (Bermondsey and Old Southwark) (LD)
Very much on planet Earth, there are many sites that are not being developed but could be. Will the Minister talk to his colleagues in the Department for Communities and Local Government and the Treasury to ensure that financial incentives are offered to the owners of sterile land so that it can return to use and be developed, thus providing jobs in the construction industry?