Affordable Housing (London)

Meg Hillier Excerpts

Wednesday 9th September 2015 Westminster Hall

[Chris Philp]

I would like to make a little progress first; I will give way in a moment. The Mayor of London, my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), has brought forward 94,000 affordable units during his mayoralty —a considerably larger number than was brought forward by his predecessor, Mr Livingstone. We have a good track record on affordable housing, but more clearly needs to be done.

On foreigners buying property in London, there are two elements: who is buying it, and are they occupying it? On foreigners buying it, the phenomenon tends to be concentrated in prime central London places, such as Kensington and Chelsea—

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

And Hackney.

[Chris Philp]

It is good that Hackney is a desirable place. Figures produced by Knight Frank suggest that 93% of new build stock in outer London and 80% in inner London is sold to UK residents. Savills estimates that in 93% of all transactions across London, the property, whether new or second-hand, goes to people who live here, so it is possible to overstate things. In 93% of property transactions, the property goes to Londoners.

I am delighted to report that vacancy rates in London under this Government have dropped dramatically. Long-term vacancy—vacancies for longer than six months—stood at 34,000 units in 2010; that has dropped to 20,000 units, which is a reduction of 41%. That is good progress achieved under this Government.

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[Chris Philp]

If there are challenges in inner London boroughs such as Camden and the Royal Borough of Kensington and Chelsea, where it is difficult to find new sites, it is important that houses are built in the wider London area. The Mayor of London has strongly advocated having a London ring fence, whereby the proceeds of council house sales and the like are ring-fenced for use within London. I am sure the Minister will comment on that suggestion in due course.

[Meg Hillier]

I thank the hon. Gentleman for being so generous in giving way. He seems to be saying that in boroughs such as Hackney—where, under the Government’s proposed right-to-buy policy, large family council properties would need to be sold off, but over a fifth of residents under 16 will need those family homes—we should be content to encourage people to go and live in Ruislip or Mitcham. I am sure that those are fantastic places to live, but they are not where Hackney residents want to live; they would have to take their children out of school to do so, which they do not want to do. Is he saying we should be shipping people out of expensive areas to cheaper areas?

[Chris Philp]

No. I am simply saying that where there are very high-value council properties, it makes sense to sell them and free up money to build more properties. Ideally, those would be in the same borough, but if there is a lack of land—I am not sure that Hackney has a particular lack of land; that is more a problem for the inner London boroughs, such as Camden, Westminster and RBKC—and it is impossible to find new land in the borough, we should look a little more widely. That seems to be common sense. If we can sell one unit and build three, that seems to be a trade-off well worth—

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[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

In the four minutes or so I have available, I want to acknowledge the comments made by my hon. Friend the Member for Southwark—[Interruption.] Sorry, my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), who represents the borough of Southwark, because she painted exactly the picture in my constituency. She laid out very comprehensively the financial challenges of building homes for social housing providers. I find myself, perhaps not for the first time actually, in total agreement with the right hon. Member for Cities of London and Westminster (Mark Field), because there is a real issue in my constituency too about overseas developers, and I will touch on that.

I want to cut to the issues that I want to raise with the Minister, but I need to add that my surgeries, too, are full of people in great distress. When I started out in politics about 20 years ago, housing was a huge issue. It was a case of having to visit people in bed and breakfasts; there were all those sorts of problems. Things got a bit better, but they are now worse, I think, than they have ever been. People are so distressed. They are living in overcrowded conditions, and there is no way out. They are put in temporary accommodation a long way from home and have to remove their children from school. They are unable to get a foot on the housing ladder, find it a struggle to pay the rent and have no security of tenure in the private sector.

I should just alert Members to my entry in the Register of Members’ Financial Interests, Mr Owen. I let a property, so I understand the technical side for landlords. There is a lot of bleating, frankly, from some of the landlords’ associations about the challenges of keeping rents at a rent escalator level, so that when someone goes into a tenancy, they know how long they will be there and what the rent will be. I do not think that there is a problem for any landlord, big or small, in managing a business model along those lines.

Let me cut to the issues that I would like the Minister to address. I agree with the right hon. Member for Cities of London and Westminster that we need to tax the overseas investors. I am not an expert in how that should happen, although the Select Committee that I chair may well end up pursuing that issue. It is a real issue. I commend to the Minister the map that Private Eye did. It simply looked at properties that were sold and whom they were sold to. The situation is shocking. Let me just mention my area. There are flats down the road from me. As my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) said, small properties that should be going to local first-time buyers are being bought by overseas companies. They are somehow getting a tax break for doing that. That is not the sort of investment that we need. I recognise that huge sites, such as Battersea power station, may need to attract overseas investment, but this is taking away from local people, so the Minister and the Government need to look at that.

The Government need to go back to the drawing board on the right to buy. As I said in my intervention, taking family-sized properties away from Hackney council to backfill for the sale of housing association properties is double-hitting the affordable housing stock in my area, where it is increasingly unaffordable for someone on the minimum wage even to rent a property, certainly without housing benefit. I recently heard of a nurse moving into a new housing association development who was reliant on housing benefit from day one. That is my other point: the Government must grasp the nettle of housing benefit. Subsequent Governments of differing hues have not done that. When Sir George Young, who was formerly in this place, was a Housing Minister more than 20 years ago, he said, “Let housing benefit take the strain.” Housing benefit is now taking the strain to a ridiculous extent. If that money were better invested, we would make a dent in the problem.

This is something the Minister could easily do. Certainly my party had discussions with the Council of Mortgage Lenders before the last election about allowing longer tenancies in the private sector. It is the mortgage lenders that, ridiculously, suggest that a year’s contract is more secure. Frankly, a tenanted property in London often represents a more secure income for the mortgage lender than that from someone in a precarious job. That is something the Minister could quickly act on, and I urge him to do so.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

We are hearing a list of questions for the Minister, and I just want to throw in a few of my own, because although I am new here, even I am getting a sense of déjà vu. I led a similar debate almost exactly two months ago, and we did not have any answers then, so I just want to throw in three questions from then.

[Dr Huq]

It was just the mention of Sir George Young that reminded me, because he is a predecessor of mine.

[Meg Hillier]

In the 30 seconds remaining to me, I will rattle through my points. Shared ownership needs to be reviewed. Recently on the market in my constituency was a £1 million shared ownership property. One would need to earn £77,000 a year to get a quarter share in that property. That is not computing; it is not working, and it needs to be reconsidered in London.

The Government could and should consider co-operative ownership. The garden suburbs were on that model. As my hon. Friend the Member for Mitcham and Morden said, there is an opportunity to think more broadly and innovatively. Perhaps there could be a competition for housing solutions, and that could be one of them.

We need to give London much more autonomy. We need to devolve more property tax, so that the London Mayor, whatever party they are from, has the control to be able to grapple with this issue in the London market. We need to have a much better strategy for public land. Hon. Members have already talked about this in the debate. Her Majesty’s Treasury is demanding the highest pound return for the taxpayer. That sounds admirable, but the better dividend locally for communities would be to have affordable housing for local purchasers and local renters on the sites. It is common sense to look at the way land is dealt with, so the London Land Commission is a step in the right direction.

The Minister, I hope, will recognise that housing is a huge problem for our constituents. That has to be grappled with now or it will remain a problem for the next 20 years. It is going to take a long time to solve as it is, and if he does not tackle it now, it will become worse. We will see London hollowed out, with key workers and people on low incomes unable to live in the areas in which they work and which they serve. That will be devastating for the social capital of London.