Affordable Housing (Devon and Cornwall)

Matthew Pennycook Excerpts

Wednesday 27th April 2022 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Hosie. I congratulate the hon. Member for North Devon (Selaine Saxby) on securing this debate, on the thoughtful way in which she opened it, and on her tenacity in returning to this issue time and again. I know that she has been highlighting it since she was elected. I also thank all Members who have participated this afternoon. We have had a series of excellent contributions, as well as a range of practical suggestions and questions, which I hope the Minister will respond to.

As many of the hon. Members present will be aware, having taken part in them, this is not the first debate this year to grapple with the issues of access and affordability relating to housing in rural and coastal communities. Indeed, there have been several Westminster Hall debates over recent months in which Members from across the House have raised serious concerns, particularly about the impact of second homes and short-term and holiday lets on the availability and affordability of homes for local people to buy and rent. That, in itself, speaks to the importance of this matter to a great many people across the country, as well as the pressing need for more to be done to address the problem so that we get the balance right between the benefits that second homes and short-term lets undoubtedly bring to local economies and their impact on local people.

It is clear from the strength of feeling expressed in this debate, and in those other recent debates, that there remains a clear view among a sizeable number of hon. Members, on both sides of the House, that as things stand the Government have not done enough, and have not got that balance right. That lack of action on the part of the Government has real consequences. I do not think it is hyperbole to use the word “crisis”, as many hon. Members have done. I think that this is a crisis, particularly as it applies to Devon and Cornwall—but also to other parts of England, as we have heard.

What does that crisis look like? As we have heard, as well as entailing the loss of a significant proportion of the permanent population—and the impact that loss has on local services, amenities and the sustainability and cohesion of communities—excessive and growing rates of second home ownership are, in a great many rural and coastal areas, directly impacting the affordability, and therefore the availability, of local homes, particularly for local first-time buyers. The staggering growth in short-term and holiday lets in many rural and coastal constituencies is having the same detrimental impact, albeit on not only the number of affordable homes for local people to buy, but access to private rentals—as we heard—for those who cannot buy and also cannot secure social housing.

Incidentally, when it comes to the shrinking private rental markets in many rural and coastal communities, the issue is not only of access but of security. Many renters in these parts of the country—particularly key workers—are finding that their landlord wishes to begin using their property exclusively as a short-term or holiday let, and they are evicted as a result. That is yet another reason for the Government—who I must say have failed to bring forward a renters’ reform Bill in this Session, despite promising to do so in the Queen’s Speech—to get on with it and finally introduce the legislation necessary to ban no-fault evictions, rather than delaying matters for another year or year and a half with a White Paper.

What, then, needs to happen to ensure that we make available more affordable housing in Devon, Cornwall and other rural and coastal communities across the country? First, as I have said on previous occasions, there is clearly more that could be done to mitigate the negative impact of excessive numbers of second homes and holiday lets.

When it comes to non-planning levers—primarily taxation—we accept that the Government have taken action over recent years by reforming stamp duty, allowing local authorities to increase council tax to 100% for second homes, and proposing that properties be required to have been let for 70 days in any given financial year to be liable for business rates, rather than council tax. However, there is a strong case for going further. We believe the Government should explore providing local authorities with powers to, for example, introduce licensing regimes for second homes and short-term lets, and giving them even greater discretion over their council tax regimes, perhaps, as my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) just mentioned, allowing local authorities, as Labour has done in government in Wales, to levy a premium or surcharge on second homes and long-term empty properties if they believe that is what is required in their locality.

I believe there remains a strong case for reviewing whether the current 3% rate of stamp duty surcharge on second homes and the 5% rate levied on non-UK buyers are set at the appropriate level in light of the boom that we have witnessed over the course of the pandemic. When it comes to planning levers, the system does now enable residents to put in place local neighbourhood plans that can go some way to managing second-home ownership rates, but again it is clear that further measures are required. We believe that the Government should explore further changes to planning restrictions and enforcement that might enable local authorities to bear down on excessive numbers of second homes and holiday lets in a way that, if designed well, would not exacerbate the problems of affordability and availability that have been touched on in today’s debate.

Secondly, as well as doing more to mitigate the negative impact of, in particular, second homes and holiday lets, Ministers really do need to start grappling with what reforms are required to deliver the right quantity of new housing in the right places, at prices that local people can actually afford. They need to do so because at present the Government are failing to deliver on this front, both in terms of sufficient numbers of new affordable homes to rent—where Ministers are presiding over a system that sees a net loss of thousands of genuinely affordable social rented homes each and every year—and new affordable homes to buy.

The hon. Member for South West Devon (Sir Gary Streeter) mentioned shared ownership and the first homes scheme. I could spend a long time speaking about the deficiencies of shared ownership as an intermediate model. I gently suggest to the Minister that, like its starter homes forerunner, the Government’s flagship first homes scheme, as a policy, looks to all intents and purposes like it is already an abject failure. Not only is it leading to a significant reduction in the number of social and affordable homes to rent by top-slicing funding secured through section 106 agreements, but since it was first introduced, rising house prices, coupled with a rising new build premium, have already eroded the value of the first homes discount, by my calculations, in almost three quarters of local authority areas.

The simple fact is that the policy does not address the underlying reasons why young people and key workers cannot get on to the housing ladder, particularly in areas with overheated housing markets, such as Devon and Cornwall. Labour is committed to giving first-time buyers first dibs on new homes in their local area, and to establishing a new definition of affordable, set at a rate of 30% of local incomes, rather than the present definition, which is linked to those overheated market rates that we have discussed.

I conclude by saying that this has been a worthwhile debate, and I have no doubt that we will return to this subject once again in the next Session unless the Government decide to heed the demands of hon. Members, including many on their own side, and act quickly on this issue. I very much look forward to hearing from the Minister, both that the Government are minded to do so and precisely what that action will entail.