Social Housing in London
Debate between Mary Macleod and Andrew Love
Mary Macleod
All I know is that there is an incredible shortage of housing in London, so the last Government did not do nearly enough to solve the problem. Look at what Ken Livingstone did not achieve as Mayor; the current Mayor of London is trying to address the issue massively in creating new affordable homes.
The new homes bonus announced by the Minister for Housing and Local Government last month also provides powerful incentives to transform house building by encouraging local communities to support development rather than resist it. Under the scheme, the Government match the council tax raised from new homes for the first six years, and communities themselves can decide how to spend the extra funding—for example, to provide local facilities such as libraries, swimming pools or leisure centres. The scheme will also encourage councils to bring empty properties back into use, as they will receive the cash bonus for that.
Mary Macleod
That question is best directed at the Minister, who will, I think, disagree. I am sure that he will respond to it at the end of the debate.
The new homes bonus shows the concept of localism in practice, with local communities, local government, business and the third sector coming together to make decisions that will bring real benefit to the local area. The Mayor of London has made a commitment to deliver 50,000 new affordable homes by 2011, of which 30,000 will be social rented homes; the remainder will be for low-cost ownership. He is on target to deliver his manifesto by the end of his mayoral term, despite the biggest downturn in the market for many years. By the end of the financial year 2010-11, 40,000 homes will have been completed, with a higher proportion of social rented homes being family sized than in any previous mayoral term. The Mayor has also fulfilled his manifesto commitment to invest £60 million in bringing 3,142 empty homes back into use.
Secondly, let us consider the increased use of the private rented sector. We have been used to an “Englishman’s home is his castle” approach to housing, but it is clear that we need to move more towards a European model, whereby long-term renting is much more the norm. Private companies can play a role in that, and several are now developing models that provide grant-free housing for economically active families who find that they are unable to get social housing or who have no realistic prospect of getting on the housing ladder—the so-called sandwich class. Those companies work in urban areas to develop brownfield sites and provide good-sized family accommodation for under the £340 a week housing benefit threshold.
For example, the London Rental Housing Company intends to build 2,000 private rented units in the next five years, and it is currently searching for 10 sites across London that can accommodate at least 150 three-bedroom apartments. It also intends to build larger units for families and sharers. That is part of a new, emerging build-to-let sector, which is entering the market to build purpose-built mass housing. Perhaps one of the greatest indictments of the Labour years is the previous Government’s rigid adherence to political dogma and their ignorance of the private sector’s potential to help solve some of the problems.
The Mayor of London believes that, by attracting institutional investment, there is significant scope for the private rented sector to play a bigger role. He is also committed to ensuring value for money in the private rental market and introducing the London rents map, which enables prospective tenants to see the going rental rates for any given postcode area in the capital.
Thirdly, let me deal with increased mobility. The majority of tenancy agreements are currently made on a lifetime basis, with no regard for future needs. Indeed, tenants can leave properties to family members after their death, with no regard to their housing needs. Although I understand that it would be difficult to change the arrangements for existing tenants, and I appreciate why the Government have decided not to do that, the suggested changes for the future represent a much more realistic model for moving forward.
Mr Andrew Love (Edmonton) (Lab/Co-op)
It is a delight to follow my hon. Friend the Member for Lewisham East (Heidi Alexander). I shall be interested to hear how the Minister responds to her devastating critique. I congratulate my very good friend the hon. Member for Islington North (Jeremy Corbyn). As he said, we go back a very long way. When I joined Haringey council many years ago, it was pronounced to me, as a new member, “Don’t worry; we’ve almost solved the housing waiting list problem in Haringey.” That was a year before Mrs Thatcher savagely cut housing investment programmes—and if I may say so, we appear to be going round the same cycle again.
I want to focus on two main areas. The first is the local housing allowance changes and their impact throughout London. Secondly, I want to reiterate points that have been made by many other people, including my hon. Friend the Member for Lewisham East but also, very pleasingly, by the hon. Member for Ealing Central and Acton (Angie Bray), on affordable housing and the problems that the new regime is creating. Before I do, I should like to give a brief overview of the housing situation in my borough, the London borough of Enfield.
We suffer from extreme housing stress. Indeed, we are told that Enfield is the fourth most stressed housing authority in the country, and easily the most stressed in outer London. For owner-occupation, the cost of an average house in Enfield has tripled since 1995. That is not particularly exceptional for London. The price to income ratio is now 9—again, not exceptional, but it makes owner-occupation unaffordable for a very large majority of the people living in the borough.
One in four of all households in Enfield are currently in receipt of some form of housing benefit. That is a 36% increase since 2005. There is some relatively good news, in the sense that the number of households in temporary accommodation has gone down from 3,400 in 2006 to 2,300 in the latest year for which we have figures. Interestingly, that has happened mainly as a result of the deposit scheme that the previous Government introduced, which has made going into the private rented sector a good deal more secure than it was.
Sadly, locally, overcrowding in the social sector, and particularly the council sector, has increased markedly in recent years. The most common form of overcrowding in the social sector is in two-bedroom properties, among families looking to move to three, four and five-bedroom accommodation. That is where the biggest overcrowding problem is, and I will return to that because it is critical to what we are discussing today.
Others have already said that local housing allowances are very much a London issue. It is not just that rents are 50% higher in London than anywhere else; the private rented sector is much more important in London than anywhere else. Enfield is not currently affected by the changes being made to the caps. I note from documents recently released that there is some transitional protection for those in the private rented sector in central London, but that lasts only until 2012, so we can see the nightmare looming on the horizon. Indeed, there are already signs of it: my local authority did a little survey of who was claiming housing benefit or local housing allowance, and 28% of recent claims were made by people coming into the borough from outside. Many will not be from central London, but quite a lot of them will be.
London Councils estimates that more than 18,500 households will be affected by the changes, so we see that the changes could have a dramatic impact, not just in inner London—Members have spoken about the impact there—but in outer London. By 2016 quite a lot of outer-London boroughs will be unaffordable for tenants in the private rented sector. Quite a lot of boroughs will be affected, including Barking and Dagenham. In Enfield around three quarters of accommodation, mainly in the eastern half of the borough, will still be affordable then. Indeed, Enfield has estimated—I should probably say guesstimated—that upwards of 2,000 additional local housing allowance claims could be made following the ending of the temporary support for people on local housing allowance in central London.
What impact would that have on Enfield? We discussed the subject earlier. My hon. Friend the Member for Islington North mentioned that quite a lot of Islington tenants are temporarily housed in Enfield. I think the latest estimate is that more than 2,000—certainly a very significant number—of temporary accommodation tenants from other parts of London are housed in the London borough of Enfield. I mention that because if we have an influx as a result of the policies introduced by this Government, it will add quite a lot of pressure.
The issue of school places in Redbridge was raised earlier; we already have an acute problem. We have knocked on the Government’s door, asking them to help us with primary school places. That will be another difficulty for us. Of course, additional demands will also be placed on social and welfare services. We have not been able to estimate locally what the impact would be on private sector rents, but if demand increases, rents are likely to go up. Will that lead to greater overcrowding? Possibly. Even though we have a better record on homelessness in our area, it is still very high locally. Of course, that will put additional pressure on the very limited social housing in the borough.
I could talk about increases in poverty and deprivation. Many are concerned that with the changes in London, community cohesion is being strained to the limit. I would not subscribe to that view, but the significant movements that are going on are having an impact. Not all those impacts are caused by local housing allowance changes, but the changes will certainly exacerbate them.
To pick up on a point that the hon. Member for Brentford and Isleworth (Mary Macleod) put to Labour Members, what should we do? The first thing that we need to do is review the cap; it just does not make any sense for inner London. Setting the local housing allowance at the 30th percentile of rents will have a negative impact on London in particular, and the Government really need to look seriously at the implications of the local housing allowance changes that they are suggesting.
Mary Macleod
Does the hon. Gentleman not agree that in some cases, albeit not many, ridiculous sums of money were spent? There were families receiving £104,000-worth of housing allowance. That is ridiculous, when other people who are working and earning much less cannot afford the rents that we have discussed.
Mr Love
If we searched long and hard enough we might be able to find an individual instance of someone receiving such sums. If I may say so, it is a bit like the Bob Crow issue that was raised earlier, and is entirely a diversion from the reality that people face in London. What we need to do in any debate in the House—indeed, it is incumbent on us to do so if we are to represent our constituents—is discuss the reality, rather than a figment of someone’s imagination involving Bob Crow.