Housing and Planning Bill (Sixth sitting)

Matthew Pennycook Excerpts

Tuesday 24th November 2015 Public Bill Committees

[Mr Thomas]

I am grateful to the Minister for that. In which case, helpful as his comments have been, it sounds to me as though some housing co-operatives, but not all, could be covered by the clause. Given the forces arrayed against me, I will perhaps accept the Minister’s words of encouragement for one part of the housing co-op sector and return to my concerns about the need to support the wider housing co-op sector later in proceedings on the Bill.

Amendment 88 was very much a probing amendment. I say gently to the Minister that this is a very bad Bill overall, but, in accordance with the spirit of Committee proceedings, we can make it slightly less bad through our debates; I hope my remarks are seen in that spirit. I welcome at least part of the Minister’s remarks, which were helpful. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

I beg to move amendment 84, in clause 8, page 5, line 29, at end insert “and without unreasonable cost”.

This amendment would protect authorities in cases where the provision of access to a public highway, connections for electricity, water and waste water and other services required to ensure a plot of land is fully serviced would entail excessive cost.

It is a pleasure to serve under your chairmanship, Sir Alan. In the same spirit that the Minister and my hon. Friend the Member for Harrow West have made clear, the amendment seeks to improve the legislation on a matter where there is a large degree of consensus. It would ensure that, in strengthening the role of local planning authorities to make plots of land available for self-build and custom build, the Bill did not place disproportionate or unreasonable burdens upon those authorities. It therefore probes the Minister on what measures will ensure that local authorities are not overburdened when it comes to the costs of servicing plots of land.

With your indulgence, Sir Alan, I will briefly set out the Opposition position on self-build and custom build, to aid our debate. Four and a half years ago, the then Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps), heralded a “self-build revolution”; yet now, despite encouraging signs, that revolution has still failed to materialise. According to some industry surveys, over 50% of people in this country would consider building their own home if given the opportunity to do so. An Ipsos MORI survey has suggested that approximately 7 million people would consider doing so within the next 12 months. We therefore know that there is significant unmet demand in this area.

No accurate figures exist, but estimates produced by AMA Market Research suggest that self-build and custom build output remains steady, at between 7% and 10% of the overall number of new homes built each year, with self-build completions still below a peak of around 14,000 units in 2007. As a number of hon. Members have already suggested, in comparison with continental parallels, the UK’s performance in this area remains poor. In Canada, Germany, France, Sweden and Ireland, self-build or custom build often accounts for more than 50% of the market, and in Austria it accounts for more than 80%. Crucially, in those countries building one’s own home is not just the preserve of a privileged few, as there is a strong tradition of self-build and custom build right across the social spectrum. In this country, unfortunately, self-build is still seen as a niche pursuit for intrepid enthusiasts or an elite club that is open to a small minority able to fund the kind of ambitious projects made famous by “Grand Designs” that win awards from the Royal Institute of British Architects. That needs to change, and we hope the Bill will help to achieve that.

The Opposition firmly support the Government’s aim of getting the self-build and custom build sector to scale, in order to progress towards building the homes that our people need. Self-build and custom build can provide a lifeline for those currently shut out of home ownership, as well as an alternative—some of the cases we have heard about have made this clear—for those seeking more collective approaches to meeting housing need. My hon. Friend the Member for Harrow West gave a number of good examples in that regard. A strong custom build sector would open up new opportunities for medium-sized and smaller housebuilders. As the Minister has rightly said, in putting the customer at the heart of the process, the sector can expand choice, support innovation, promote energy efficiency, drive up quality and strengthen communities—we know that people who take this route are more likely to have a longer-term stake in the homes that they shape.

Taken in the round, the sector has the potential to correct some of the systemic flaws in the housing market. For that reason, we supported the Self-build and Custom Housebuilding Act 2015 and are broadly supportive of clauses 8 to 11, which build on that. At this point, it would be remiss of me not to mention and commend the work of the hon. Member for South Norfolk in bringing this issue to the fore in both this and the previous Parliament.

The interplay between the three factors at work for self-build and custom build—land, finance and planning—is complicated. There is general agreement that more needs to be done, especially about the lack of suitable accessible plots of land to build on and about facilitating the assembly of such land to allow for the scale of sites needed—of 100-plus plots—to deliver custom build economically. The Lyons review, which was commissioned by the Labour party, identified that as a significant barrier that would need to be addressed and pointed to the need to take a more innovative approach to the use of land more widely if the sector is to realise its potential.

It remains to be seen whether the measures in the Bill will deliver the 20,000 or more self-build and custom-build units a year that the Government seek to realise. It would be useful if the Minister set out what levels of demand were registered in each of the 11 vanguard authorities set up to trial the full right to build. We on the Opposition Benches suspect that the results may have been mixed, but we believe that the strength of clauses 8 to 11 lie principally in the strong signal they will send to local authorities to make this sector a priority.

We supported the creation of registers in the 2015 Act, but in building upon them, as this Bill does, and inserting new definitions and making related amendments, as clause 8 does, we want to ensure that the Bill does not place unreasonable burdens on already over-burdened local authorities. We know that the Government share that aim, and that is what amendment 84 seeks to do.

[Mr Thomas]

Before my hon. Friend gets into the substance of the concern about the clause, which he has helpfully set in context, he will remember, having read the Hansard extracts from the debate on the private Member’s Bill introduced by the hon. Member for South Norfolk, that our then housing spokeswoman, my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), raised concerns about access to finance for those wanting to go down the self-build route. Might my hon. Friend encourage the Minister to give us an update on the extent to which finance is genuinely available for self-build and custom house building, and, indeed, the housing co-operative field, which is covered by the self-build and custom house building definitions in the Bill?

[Matthew Pennycook]

My hon. Friend makes a very good point. Access to finance is a very real issue—it is perhaps less of an issue than land and land assembly, but it is an issue none the less. Amendments 81, 82 and 83 will touch on that area, and I hope we will hear from the Minister in response.

The concern that the Bill might place unreasonable burdens on local authorities was touched on by a number of witnesses in written and oral evidence to the Committee. For example, the chair of the board of the Planning Officers Society, Mike Kiely, raised such concerns in his written submission, in which he stated that the right-to-build provisions could place a considerable additional burden on local authorities. Similarly, the CPRE expressed the concern that the new duty may be too onerous in many areas. If the Bill is to achieve its objective of scaling up the sector, it is vital that local authorities view prospective self-build and custom house builders as partners in helping to meet housing need, not as a burden.

However, we want to make sure that the Bill strikes the right balance between a common national framework for the full right to build and local discretion. There is a danger that few people will join registers, particularly if they are not well publicised by local authorities or if the eligibility criteria are too restricted. Some in the industry have raised that concern directly with me. If we are to see large numbers join local registers, as I hope we will, we need to make sure that local authorities do not face disproportionate or unduly onerous costs or debts as a result of meeting their new duty. Different parts of the country have different housing and land markets, and there will be some, particularly in rural areas, where the costs of servicing plots could be disproportionate or, in some cases, simply impractical. We know that many local authorities can expect to make a profit from the sale of the land at market value in due course, but there will also be increased costs, as the impact assessment accompanying the Bill makes clear.

We appreciate that, in the short term, the Government intend to provide support to cover the costs of developing the register, under the new burdens doctrine. We would appreciate clarification of whether they intend to provide support to cover all the associated costs of developing and implementing the register, including servicing plots of land, and also whether the fees—which, as part of clause 11, can now be recovered in connection with a duty—can be legitimately used to cover the cost of servicing plots of land for the purposes of the duty.

In instances where the local planning authority is not exempt from the duty, as permitted by clause 10, and where full recovery of costs is not possible, our concern is that some LPAs could be hit with unreasonable costs. We believe it is important to ensure that the costs remain proportionate, whether they are for servicing plots of land in the ownership of the authority itself or whether they relate to cases where the granting of suitable development permission opens the authority up to servicing costs on land owned by others. Where they are not, or where servicing is simply impractical, local authorities have a means of avoiding unreasonable costs and debt.

Amendment 84 would achieve that by revising the proposed definition of “serviced plot of land” to cover land that has access to a public highway and connections to electricity, water, waste water and other services, or that can be provided with those things in specified circumstances, or within a specified period, and without unreasonable cost. That would protect local authorities by allowing them to avoid the high upfront servicing costs that might otherwise be involved in fulfilling the full right-to-build duty in some instances.

[Brandon Lewis]

The hon. Gentleman commented on some of the finance issues, particularly relating to mortgage lenders. I should outline in opening my response to him that the Government have made a £150 million custom build serviced plots loan fund available to enable greater access to serviced plots. I encourage local authorities to work with private or third-party partners to take advantage of that funding to move these issues forward.

Last Friday, I visited one of the custom build areas, in Stoke, which is one of the vanguard areas for the pilots, and met a couple of families and visited one of the homes. I spoke to the chief executive of the mortgage lender—a local building society—who outlined his desire to go further with custom build lending. He said small and local building societies were particularly keen to do that, because it gives them a clear niche in the market, where they can be competitive against the larger companies, which obviously want to work on a more national, organised scale. That gives small local lending companies—we all want small and medium-sized enterprises of all types to grow—a real opportunity and a real niche, and I would encourage people to look at that option.

[Brandon Lewis]

Yes. That is what I am saying. I would encourage any local authority, particularly as we go forward beyond the vanguards, to work with private and third sector partners or other vehicles—including, potentially, co-operatives if they qualify for self and custom build—to take advantage of that funding. The pilots have been doing some phenomenal work. On average, we had 80 people coming forward on the register in just the first three months of the scheme, which is an indication of the appetite to take this forward. That backs up the comments by the National Custom and Self Build Association, which we support and want to deliver on, building on the work done by my hon. Friend the Member for South Norfolk in his private Member’s Bill, to see that part of the sector double in size over the next few years.

[Matthew Pennycook]

Will the Minister clarify one important point, because it is instructive as to how the registers will operate? Over what period did those 80 people come forward? How many people are on the local registers in the 11 vanguard plots now? How many joined in the first few months?

[Brandon Lewis]

As I said, it was 80 in just the first three months, which is a clear indication of the appetite. We want to make sure that we do what we can—partly through the clause and partly through my hon. Friend’s Bill—to double the number of people who take up this opportunity.

I welcome and understand the intention behind the amendment to protect local authorities from excessive costs, but I would argue that a plot of land that required excessive costs to service would probably not be suitable for self or custom building. People wanting to build or commission their own homes usually want to be able to start building as soon as they have purchased their plot of land. That is why the Bill requires local authority to permission suitable serviced land to ensure that the plots are—I use the definition advisedly—shovel-ready. Land that requires excessive costs to put in the basic services should not count as suitable land, and the local authority should seek alternative sites to permission to comply with its duties. For that reason, I ask the hon. Gentleman to withdraw the amendment.

[Matthew Pennycook]

Perhaps the Minister could clarify where that is in the Bill. Proposed new section 2A(2) puts a duty on local authorities to

“give suitable development permission in respect of enough serviced plots of land”.

Clause 8 defines what those serviced plots of land are. Nowhere in the Bill can I see that the protection of the kind he has just outlined would be an option for local authorities. For example, if they have a register of 800 people with a mind to build their self-build homes, but have fewer plots than that, they might be forced into bringing impractical or costly serviced plots of land into use. Nothing in the Bill seems to protect local authorities in that way from unreasonable costs.

[Brandon Lewis]

We do not expect local authorities or developers to make a loss on land, services or on sales for custom building. It is right that the costs incurred for serviced plots should be borne by the custom builders.

[Brandon Lewis]

My hon. Friend is absolutely right, which is why I hope the hon. Member for Greenwich and Woolwich withdraws his amendment.

[Matthew Pennycook]

I have to disagree with the hon. Member for South Norfolk. Clause 10 is about exemption from the duty as a whole, not from the duty to service particular plots of land. He is making a different point. That said, although we might return to the subject, given some of the Minister’s assurances, at this point I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Mr Bacon]

I will not detain the Committee for too long. Given that the clause is the first in chapter 2 on “Self-build and custom housebuilding”, I want to say how much I welcome the Government taking further the provisions of the Self-build and Custom Housebuilding Act 2015, which was my private Member’s Bill, to establish the right to build and to make it a practical reality that serviced plots are delivered at scale, so that we have in this country what has been a great lack: the building of houses as if customers mattered. In most markets supply rises to meet demand. The reason it does not do so in the housing space is that customers are not at the centre, as the hon. Member for Greenwich and Woolwich has said. Historically, customers have not been at the centre as they need to be.

I want to make one other important point about the role of SMEs, which the Minister mentioned in speaking to the previous amendment. Up and down the country many builders merchants provide timber, plumbing and electrical supplies, and other building materials. The purchase of such supplies locally for a house, whether self-built or built to commission by a local builder, does a great deal to put money into a local economy. The Minister probably knows Brett Amphlett of the Builders Merchants Federation, who helped with my Adjournment debate and my private Member’s Bill, and nor would I be surprised if the Minister had visited a builders merchant to find out the good work that such businesses do to promote local sales to keep money in the local economy.

We need a revolution in the way in which housing is done in this country. We have to create a situation in which the supply of houses rises properly to meet demand. A key part of that will be serviced plots at scale, which is why I agreed with the Minister’s earlier comments.

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[Grahame M. Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Alan. I want to make a few brief points, because I know time is precious. I have already raised a number of issues that are relevant to my constituency with the Minister in the Adjournment debate. Like my hon. Friends the Members for Harrow West and for Greenwich and Woolwich, we are very keen to join the revolution that has been promoted by the hon. Member for South Norfolk. There is common agreement across the Committee about the benefits of not just the grand design but the ambition for self and custom build for everyman that the Bill espouses. Some 100,000 properties over the lifetime of the Parliament seems incredibly ambitious, but will bring many benefits, not least to the building supply sector, in terms of employment and meeting housing needs.

Will the Minister respond to the points raised by my hon. Friends about the obligations to be placed on local authorities? Notwithstanding the existing or potential demand for custom and self-build, there is a concern related to subsection (4) and the various conditions that are placed on the definition of a serviced plot of land. Subsection (4) would define a serviced plot of land as one that,

“(a) has access to a public highway and has connections for electricity, water and waste water, or

(b) can be provided with those things in specified circumstances or within a specified period”.

Will the definition place any additional burdens on local authorities or service providers to connect properties or serviced plots of land at costs which they cannot meet? My own local authority is facing immense costs as a consequence of budget cuts from central Government. On the eve of the spending review, we are making some difficult decisions.

[Matthew Pennycook]

My hon. Friend is making a good point. That is what I tried to get at, and we got part of the way there. Does he agree that it would be useful to have, not only a better understanding of what burdens might be placed on local authorities, but an idea of how much money, if any, has been allocated by the Department to cover any new burdens that the Bill will impose on local authorities?

[Grahame M. Morris]

That is a really good point, which I hope the Minister will address in his closing remarks.

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[Brandon Lewis]

There is obviously a process that the Government go through in agreeing with local government the new burdens that will still apply. With regard to our general position on plots and the cost of servicing them, I refer the hon. Gentleman to the comments I made earlier about our expectations. I am happy to give him further feedback on that over the next few days.

[Matthew Pennycook]

I would like to press the Minister on the specifics of this. He said that under the new burdens principle, local authorities will be covered. How much has the Department allocated to cover new burdens that might arise as a result of the Bill? That is not in the impact assessment. Has the Department bottomed out that area and allocated actual funds?

[Brandon Lewis]

I shall be brief, because I know we want to make progress today. If the hon. Gentleman looks at the rest of the clause and, indeed, the comments I made about the previous amendment, he will see that he needs to look at this in the whole, and that will answer his specific question.

Let us look at what we are learning from the vanguards. As I said, I visited Mr and Mrs Sproston in Penkhull in Stoke just last week, and saw the six new homes that have been delivered on that particular site. Under the new administration, the authority wants to deliver the pilot and find a way to make it work for people. It is a really exciting opportunity that both lenders and the residents are getting behind, and I therefore encourage them to go further with it.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Duty to grant planning permission etc

[Matthew Pennycook]

I beg to move amendment 86, in clause 9, page 5, line 42, after “permission”, insert

“to meet housing need generally including”.

This amendment would ensure that authorities give suitable development permission to housing across all tenures, including but not limited to self-build and custom housebuilding, to meet the demand for housing across all tenures in any given authority area.

As a number of my colleagues, including my hon. Friend the Member for City of Durham, said a number of times in our previous sittings, the Opposition think the Bill is a lost opportunity to secure the housing mix that we desperately need to solve our country’s housing crisis. The amendment simply seeks to explore why the new duty placed on local authorities to grant sufficient development permissions to meet the demand for self-build and custom build has not been extended to ensure that authorities are granting enough permissions to meet the demand for all other housing tenures.

We could descend into another exchange about historical figures and an attempt to apportion blame but, given that we all want to make progress, I hope we can avoid that. Instead, for the purpose of debating this amendment, I hope the Committee can agree that the housing crisis we face is longstanding, that the problem of grossly inadequate housing supply goes back three decades or more, and that addressing it will require a holistic approach.

The scale of the house building shortfall is stark. More than 200,000 new homes a year are required to keep pace with household formation, and at least 40,000 are required in London. Last year, there were just under 118,000 completions, 18,000 of which were in London. Between 1950 and 1980, when annual completion rates were consistently above 200,000, local authorities and central Government carried out substantial planning and building.

The national planning policy framework already requires that local planning authorities plan for local housing based on need. They need to take into account demand for self-build and custom build when preparing their local plans. The Government clearly believe that the existing planning requirements are not sufficient to provide the numbers of self-build and custom build homes needed to meet the housing crisis, and that a new duty is required to boost supply in that area. The amendment simply seeks to clarify why the same logic and the same type of duty do not apply to other housing tenures.

Amendment 86 would require local authorities to give suitable development permission to meet housing need generally, including, but not limited to, self-build and custom build. It would send a clear signal to all those desperate for a decent, affordable home and those who are concerned that the Bill neglects a number of housing tenures, that the Government are genuinely committed to meeting need across all tenures and are happy to put their intent and measures to realise it on the face of the Bill.

[Mr Thomas]

My hon. Friend will remember our debate on clause 8, when a spirit of consensus about the importance of housing co-operatives almost broke out. Were his amendment accepted, it would provide another opportunity for the hon. Member for South Norfolk to demonstrate his revolutionary zeal in support of housing co-operatives. It would go some way towards plugging the shortage of support for the expansion of housing co-operatives, which at all levels—finance, local authority support and builder support—has historically restricted the growth of that important but, sadly, niche part of the housing market.

[Matthew Pennycook]

My hon. Friend makes a very good point. The amendment simply seeks to draw the Government to put their intentions on the record. If we are going to meet the housing crisis, we require action across all tenures and a housing mix, and co-operative housing is a large part of that. Our concern—we will no doubt come back to this theme—is that the Bill addresses only specific tenures of housing and does not meet housing needs across all tenures.

[Mr Thomas]

I support my hon. Friend’s amendment. I want to consider the example of a military veteran who does not want to build his own home, engage with a custom house builder or be part of a housing co-operative, but is on the local authority’s register. In most cases, he is due a very long wait. Were my hon. Friend’s amendment accepted, it might give him some hope that, despite the long waiting list that is the reality for most housing authorities, there is a chance that sufficient homes will be built at a faster rate and that he might be allocated a permanent home, albeit not one of the types of tenure that we have discussed in Committee so far—a starter home, a self-build or a custom build. My hon. Friend has put forward a very helpful amendment, and I am interested to hear from the Minister how it would not help, since I assume he will oppose it. Why would the amendment not be in the interests of that military veteran wanting a permanent home, albeit using another form of tenure, for which the Minister has not demonstrated an enthusiasm?

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[Brandon Lewis]

I do not think there is a vanguard authority in London, but if the hon. Gentleman is offering to put Harrow up to take this forward for London, I would be very happy to talk to him about that opportunity.

Local planning authorities are already required to meet the full, objectively assessed needs for the market for affordable housing in their area. Although that includes the demand for custom and self-build housing, many local authorities are still not proactively planning to meet the demand for custom and self-build in their area. As we want this area to double over the next few years and to deliver that through this Parliament, it is important that we drive this forward and have that focus, as my hon. Friend the Member for South Norfolk said. Placing a statutory duty on relevant authorities to commission sufficient serviced plots in line with demand will ensure that pent-up demand is also starting to be addressed. The proposed amendment would set an unrealistic expectation and burden on local planning authorities.

In addition, local planning authorities simply may not have sufficient land available to meet their need, or sufficient landowners willing and able to come forward for development within the allocated time. The proposed requirement in the national planning policy framework to have a five-year supply of deliverable land is a more effective tool. Among the vanguards, it is also interesting to see that areas of natural beauty and national parks were coming forward wanting to play their part. Even in areas where land can be challenging, we have vanguards wanting to do their bit. The Bill is intended to ensure that there is more permissioned serviced land available which is suitable for self-build and custom house building.

As we have heard, the numbers are still low. Custom build still only constitutes around 10% of all housing, and there are considerable benefits in promoting this type of housing further: it will diversify the sector and encourage development on sites which are too small to be of interest to the major house builders and perfectly suited, therefore, to small and medium-sized businesses around the country. It will provide business for the smaller builders and developers who are happy to offer those bespoke properties. Our ambition is to double the figure to 20%. Our proposals seek to embed custom build as a legitimate form of housing supply, as part of the wider housing mix, while still keeping expectations at a manageable scale compared with 100% of housing need. So I ask the hon. Member for Greenwich and Woolwich to withdraw his amendment.

[Matthew Pennycook]

Aside from the Punch and Judy stuff over the historical record, which I had hoped we could avoid, it was very interesting to hear from the Minister.

[Brandon Lewis]

I appreciate the point that the hon. Gentleman made. I am very happy to progress on that basis, but when he says that he does not want to play Punch and Judy politics, that does mean that he and the other hon. Members on his side do not quote figures that simply do not give the facts of the housing market that we inherited.

[Matthew Pennycook]

I simply quoted the figures on how much housing need there is and how much is currently being built and completed, which, as the Minister well knows, falls far short. The hon. Member for South Norfolk raised a very interesting point. He said that powers are already available to local authorities to meet the need for self-build and custom build housing, and that there is the land and the finance.

[Mr Bacon]

I was not actually talking about self-build and custom build. For the record, I was saying that local authorities which wish to help in the initiation, establishment, grounding, founding and growing of a housing co-operative can do so. There is nothing in law to prevent them from doing that. That is what I was talking about.

[Matthew Pennycook]

The hon. Gentleman makes my point for me. There is nothing to prevent local authorities from doing this, and yet they are not. That is why the Government feel that there is a need for a stronger duty as part of the Bill. The point I sought to make in the amendment is that this also applies to lots of other tenures and types of housing where there is unmet need, and there could be benefits to promoting that type of housing through other measures. I do not think that this is an area on which we shall agree, and we shall no doubt come back to this. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 81, in clause 9, page 5, line 43, after first “the”, insert “effective”.

The amendment would ensure that the demand for self-build and custom house building arising in an authority’s area accurately reflects the number of persons in that area who are in a position to finance their self-build or custom house building project.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 82, in clause 9, page 6, line 15, after “entries”, insert “with effective mortgage finance”.

See explanatory statement for amendment 81.

Amendment 83, in clause 11, page 7, line 32, after “eligibility”, insert “including those who have failed to demonstrate that they have obtained effective mortgage finance”.

See explanatory statement for amendment 81.

[Matthew Pennycook]

Finance and the financing of self-build and custom build has been mentioned a number of times in this morning’s debate. There is consensus that projects of this type can be extremely problematic to finance. Only certain lenders offer self-build mortgages, so the mortgage market in this area is limited. Despite welcome Government support and recent improvements, it is a sector that is still very much feeling the effect of the exit of many of the larger players in the wake of the credit crunch. Moreover, self-build mortgages—or stage payment mortgages as they are technically known—are not like traditional home loans. Typically, funds are released in four to six stages in arrears after each stage is complete and re-inspected, rather than as a lump sum at the beginning of the project. As a result, while a significant proportion of current self-builders do not need mortgage finance to start building because they have the equity in hand from the sale of their existing home, many still struggle with sufficient capital to move beyond the foundation stage.

If we are to see a marked uplift in self-build and custom build, as both sides of the Committee would like, we will need to remove as much risk as possible from the whole process. Opposition Members hope that clauses 8 to 11 will achieve that, if they succeed in delivering the necessary momentum that this sector needs. We also need to get more lenders entering the self-build market, and to make available more specialist finance products. We hope that the Government will continue to explore what can be done to reduce the considerable constraints that still face those interested in securing finance for this type of home.

[Mr Thomas]

My hon. Friend makes an important point about the need to make finance available. If I may, I will bring him back to my earlier intervention, when I said that the proposed levy on building societies that the Chancellor wants to impose risks limiting the amount of capital that building societies can lend for mortgage finance, and potentially makes it harder for those building societies to offer finance for self-build housing. It would be helpful to hear a little from the Minister about how he will address that particular problem, and whether there are any conversations going on between the Department for Communities and Local Government and the Treasury to try to offset this problem; otherwise, the Minister’s very laudable aim of an expansion of the self-build sector might be curtailed by difficulties in accessing finance.

[Matthew Pennycook]

My hon. Friend makes a good point. There is a specific weakness in that area, but there is also the wider problem of access to finance for self-build and custom build. To give the Government their due, they have put support in place, but it would be useful to hear what more is currently being done to ensure that more of those who want to take this route can be supported to do so. Alongside efforts to make finance more accessible, the Opposition believe that, given the burdens the Minister recognised that the new, full right-to-build duty places on local planning authorities, there is a case for ensuring that the authorities in any given authority area reflect the effective, rather than notional, demand for self and custom build. By that, we mean the number of people or groups who are in a position to fund their project past foundation stage rather than the sum total of individuals or groups who are vaguely interested in taking that route and may begin the process of exploring whether they can access the necessary finance some years down the line.

Clause 11 already provides for the entering of persons who have failed to meet particular eligibility conditions in a separate part of the register and makes it clear that further refinements to the eligibility criteria may be brought forward in regulations. However, our amendments would make it clear that those on the register who genuinely seek to build or commission their main home and have the finances to do so should be entered in a separate part.

Amendments 81, 82 and 83 would ensure that local authorities are required to provide suitable planning permission on serviced plots of land for those with a reasonable prospect of building their own home in the immediate future. It would not exclude those who are yet to demonstrate that they have obtained effective mortgage finance from the register entirely; they could still be entered in a separate part of the register to which we would expect local authorities to give reduced priority. That would ensure that local authorities, in so far as they must now respond to local demand for self and custom build in a fuller way, will respond to the effective, as opposed to notional, demand in their area for these types of homes.

[Brandon Lewis]

I am pretty much in complete agreement with the hon. Gentleman. In fact, the only demand on the register should be effective demand. It is important that local authorities are confident that everyone on the register for self-build and custom house building is in a position to finance their project. The amendments, however, are unnecessary because we will achieve our mutual aim of ensuring effective demand through locally set eligibility criteria for the registers. We can build on some of the work done with the 11 vanguards and how locally led is the way to go. We asked all local authorities to submit expressions of interest, so I want to put on record our thanks to the 11 who have worked with us on that over the past few months.

--- Later in debate ---

[Mr Thomas]

I was briefly provoked by the Minister’s response to my intervention. I say to him gently that it is incumbent on the Minister setting up an initiative—given the scale of the housing crisis in London—to have worked a little harder to try and get a vanguard authority in London. Why, for example, did Bromley, Bexley, Westminster or Richmond not seek to become a vanguard authority? The Minister, with his links into Conservative associations in those areas, surely could have persuaded the leaders to apply to become vanguard authorities, with all the helpful lessons for the housing crisis in London that their self-build experience might have demonstrated.

[Matthew Pennycook]

Just when I thought consensus had broken down, harmony seems to have reappeared. I am reassured by the Minister’s comments. I think he makes a good case for how financial solvency tests in a local authority area may be more effective than mortgages. We look forward to seeing those in due course and on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Matthew Pennycook]

I beg to move amendment 85, in clause 9, page 6, line 35, at end insert

“except where extant permission can be revived”.

This amendment would ensure that extant planning permissions which are revived after the start of the first base period are taken into account for the purposes of this section.

Given the time, I will be extremely brief and I hope that we can wrap up these clauses this morning. I believe the amendment is self-explanatory and I hope it is relatively uncontroversial. It is a small technical amendment that would clarify what permissions are taken into account for the purposes of clause 9, by including extant permissions that might be revived after the start of the first base period. It is, of course, entirely logical that planning permissions granted before the register has been established in any given area should not be counted as a suitable development permission under the amended Act. We wish to probe the Minister on why planning permissions that replace extant planning permissions, where the applicant is seeking to extend the time period for implementation, should not be brought within the scope of what should be counted as suitable development permission, given the contribution that such authorisations—albeit small in number and declining—could make to increasing the supply of self-build and custom build homes.

[Brandon Lewis]

First, I would like to reassure the Committee that under the current drafting of the legislation, land which has been granted planning permission prior to the start of the first base period but where that planning permission has now lapsed, can count towards compliance with the duty. That is part of what we are learning from the programme of vanguards. Picking up on the earlier point raised by the hon. Member for Harrow West, I would say that this was widely published at the time but it is disappointing that nobody in London came forward—neither his own authority nor the others he noted. I hope they will also learn from what has been going on. For example, the National Custom and Self Build Association is publishing a comprehensive toolkit on their website on 9 December, and hopefully all authorities, including those in London, can benefit from that.

The reason that these permissions can count towards compliance with the duty is that a person would need to submit a new application in order to extend the time limit on an extant permission in order to implement the existing permission. So an application for an extant planning permission would, if granted, be considered as a new permission, and therefore count against the number of permissions required. I hope that with that explanation the hon. Gentleman will be able to withdraw the amendment.

[Matthew Pennycook]

I thank the Minister for the clarification that extant applications will be counted as new permissions. A theme that has emerged from this morning that I would like the Minister to take away is that it would be useful to know much more of the detail about the experience of the vanguard authorities. He mentioned earlier that there have been 80 people on the register within the first few months, but that does not tell us the differences between those 11 vanguards, or what the experiences might be in different parts of the country with different factors at work. It would be useful for the Committee to have numbers and to have a better sense of what those vanguard authorities are doing and what the experience has been. On the basis of the Minister’s comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.