Affordable Homes Programme

Meg Hillier Excerpts

Tuesday 25th April 2023 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hollobone. I warmly congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing this vital debate. He highlighted that the Public Accounts Committee and the National Audit Office have looked into this issue. I refer to my entry in the Register of Members’ Financial Interests and declare that I am the landlord of a property in the private rented sector.

Affordable housing is critical for my constituency. Many of my constituents live in very overcrowded conditions, as my hon. Friend the Member for Coventry North West (Taiwo Owatemi) highlighted. Every week I am out on doorsteps, doing surgeries and visiting people where they live. There are many examples of four children sharing a bedroom, and of a family living in the living room and another in the bedroom. Families are experiencing severe overcrowding without any hope of moving out. I will touch on that in a moment. Too many people just cannot afford to rent in the private sector or to buy, given that rates are very high, and the Government have changed the definition of “affordable” repeatedly, as my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) highlighted. Crucially, we are just not building enough housing.

The record of the affordable homes programme speaks for itself. The Department for Levelling Up, Housing and Communities, on whose behalf the Minister is here to answer, set out to deliver 180,000 homes in 2021. It has already downgraded that forecast to 157,000 homes, but half of them will be for ownership, not rent. I am not someone who wants to get in the way of home ownership, but it is not even a distant dream for those of my constituents for whom renting privately is not an option. They just need somewhere to live, so we need social housing in London. Of course, the impacts of inflation and construction challenges put the figure of 157,000 at even more risk. The Government’s original intention was to build 300,000 new homes a year by the mid-2020s. Some of them were to be affordable homes, but we have not been given a figure, so I want to delve into that.

Let us pick up on the issue of definitions. Perhaps the Minister could take away the thought that we are conflating or confusing a multiplicity of markets. We have the full ownership market, but we also have affordable home ownership and shared ownership, which poses challenges for many people because they are liable for the whole property but own only part of the equity and pay rent on the rest. The term “affordable” was defined by the previous Mayor of London and former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), as 80% of private rents. Well, good luck with that in Hackney, where it is simply unaffordable for many people.

There are various definitions for key worker housing, depending on where the development is—the term is very ill defined in law and regulation. At least social rented housing has a rent escalator model set out in law, so tenants have an idea of what they will be paying. That has, of course, been capped because of inflation rates. I welcome that for residents, but it does also create a problem for properties in desperate need of investment. There is also, of course, the private rented sector. Although it has been subject to more regulation, there is nothing about the level of rent and it does not have anything like a rent escalator model. That means that tenants can find their rent going up exponentially after spending only a year in their home. We are increasingly seeing that across the piece in my constituency and throughout London.

Social housing is critical. There are people in Hackney who work hard in good jobs, such as the hospital porter I visited, who is renting a room in a private home. He was living with his daughter, and they rented a room each in a private home. When the private landlady put up the rent from £400 to £550 a month for each room, they could no longer afford to rent two rooms, so he was living with his then 17-year-old daughter—she is now nearly 20—in one private room, because he could not qualify for social housing. As he was not homeless, he would not even get into temporary housing—not that that is a pathway people want to go down.

Five years ago, if people had been in temporary housing for six months I would encourage them to hang on in there because a prized council or housing association property would eventually become available. It is now increasingly the case that people spend more than three years in temporary housing. Recently, a family I was dealing with were rehoused from Hackney to Wellingborough. There are other examples, with the excellent head of homelessness at Hackney Council, Jennifer Wynter, saying that this is the worst situation she has known in her long career, and warning all of us not to raise people’s hopes that a home in Hackney will be a real possibility.

The Department’s own figures show that homes built for social rent provide higher value for money than those built for ownership. This thoughtful Minister used to be a member of the Public Accounts Committee. If he looked at the figures, I think that he, along with the Secretary of State, could be an advocate in his Department for social renting housing. The problem is that the Government, who are not meeting their targets, are chasing numbers, which means fewer social rented properties for the money. We want to see more homes, but we need social rented housing, and it is no good building homes that people just cannot afford to live in. We have a sore need for such properties, yet the Government rejected the Public Accounts Committee’s recommendation to assess the demand for social rent.

Sometimes the Government also respond to reports in a confusing way. A recommendation report notes:

“The government will work with delivery agencies to confirm the 2021 programme’s capacity to deliver homes for Social Rent as part of the review”

of the delivery of housing, and that they

“will confirm the programme’s ability to deliver an increased proportion of homes for social rent to Parliament at the same time as confirming the programme’s overall delivery targets.”

I could read that in all sorts of ways. I like to read it positively, as saying that the Department is determined to see an increased proportion of social rented housing. I hope the Minister can clarify exactly what the Government mean in that response.

It is worth putting the challenge in Hackney in context. I make no apology for repeating these figures. There are currently 3,100 households in temporary accommodation, 51% of which—more than half—are housed outside the borough due to a lack of supply. There are 3,528 children in temporary accommodation. That is enough to fill eight primary schools and is equivalent to 1% of Hackney’s population. We are having to close primary schools because of falling numbers. Many of those families would love to send their children to school in Hackney, but they cannot live there because there are not enough permanent homes. I have had so many tragic conversations with constituents in my surgeries or the living rooms of their temporary accommodation. They think that if they hang on, they will get a property in Hackney, where their kids are still at school, but I have to say to them, “You are not going to be in Hackney for some years. You have a five-year tenancy somewhere else so you need to think about moving your children.” They are aghast and upset, but that is the reality. Children are being shuttled around to schools where there are places; they are not going to schools their parents choose.

Average waiting times for council and housing association housing for homeless households is now nine years for a three-bedroom property—of course, that is a notional figure—and 12 years for a two-bedroom property. That is a lifetime for a child. Children are growing up in massively overcrowded conditions. They often live in a single room in accommodation or, if they are lucky, a couple of rooms in a hotel. Sometimes, they are in temporary, rented accommodation elsewhere, but with no certainty and, even if their parents are bidding for properties, no real prospect of getting a home anywhere near any time soon.

Homelessness in the borough is increasing rapidly. The number of households seeking support increased by 44% between 2017-18 and 2021-22. Hackney Council anticipates that the number will continue to increase by about 8% a year. That is just one London borough, but I am sure my colleagues across London will say the same. It was interesting to hear that in Coventry the experiences are very similar. In Hackney, that would be considered cheap housing, compared with what we have to deal with.

I pay tribute to the Mayor of Hackney, Philip Glanville, who is doing his utmost to build council housing—affordable, secure homes—but for pretty much every one he builds, he has to have one for sale to cross-subsidise because there is not a Government subsidy, despite the Government’s own figures showing that investment in bricks-and-mortar subsidy is the most cost-effective way of delivering these homes.

I am sure the Minister is thoughtful enough to take on board the cost of poor housing to the Exchequer. The Public Accounts Committee looked at the private rented sector. In my constituency, ownership is out of reach for so many people—average house prices are at ridiculous levels—so people are living in the private rented sector. The National Audit Office concluded that 13% of privately rented properties—589,000 of them—pose a serious threat to their tenants’ health and safety. The Committee and the National Audit Office estimated the cost of that to the health service to be £340 million per annum, so it really is spend to save. I know it is difficult for any Department to sell that to the Treasury, but I am sure that if the Minister wanted to join forces with us on this issue, we could all work together to persuade the Treasury that spending money, investing in people’s homes and getting them on a stable footing is better for everybody.

This is not rocket science. We need more homes to be built, and we need to unblock the logjam that is stopping that. We do not have the time to go into all the reasons for that, but we need more social housing that is actually affordable for people on average wages—people who work hard every day but have no prospect of buying a home. Some even find it hard to afford council rent. There are issues there, but we certainly need council rented housing and housing association housing. We need pathways to home ownership, but every time someone buys under right to buy, that is another home lost to the local council or the housing association, and that is not a path that many people can pursue.

Many years ago, when I was a councillor in Islington, we would pay people about £16,000 to move from their council property to help them buy a property elsewhere, so they freed it up. That is actually good value for money. Who would have thought that the Chair of the Public Accounts Committee would be standing here saying, “Give tenants who want to move the money to do so”? Sure, home ownership is understandably a dream for many people, but it should not be a dream that is out of reach. We could free up the housing we have for those who have the wherewithal and ability to move into other homes.

We need better rights and stability for private tenants. People live in a home with a year’s tenancy, perhaps, but cannot be sure from year to year whether their children can stay at the same school. It is an upheaval in a family’s life. Now, increasingly, as people are evicted, rents are going through the roof, as many landlords exit the market. In summary, I believe firmly—I hope that the Minister concurs and will tell us how he will help to achieve this—that people need a safe, secure and long-term home as the foundation for their life and, crucially, the springboard for opportunity.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank all hon. and right hon. Members for their contributions and thank the hon. Member for Slough (Mr Dhesi) for instigating the debate. We may have disagreements about the methods by which we ensure that people can enjoy the fruits of home ownership and have a roof over their heads, but I think we would all, collectively, irrespective of what side we are on in this Chamber, agree that it is absolutely vital to have a housing sector that supports those who need it and provides the platform for people to be able to aspire to move into home ownership. That has been the case for the past century, and it has been such a success within this country.

I start by acknowledging the underlining point made by a number of hon. and right hon. Members, which is that there are challenges at the moment, including those that have grown in the immediate term, such as inflation, the cost of construction and materials and labour challenges, which all create issues in ensuring that we can make progress on our shared objectives. If we are truthful, that is also set within the context—I am not seeking to make a particularly political point, as it has developed under successive Governments of all colours over the past 30 or 40 years—of the number of houses that are built in this country and, flowing from that, the number of people who can have access to them, and the number of people who can enjoy home ownership in general. I think we have made progress on that as a Government, but I know there is a keenness to go further in the years ahead.

The Government support ensuring that people have a place to live, a place to thrive, a place to grow and a place to bring up families, which, in many instances, will be through affordable housing and social rent, but we also inherently believe in the importance of home ownership as a moral end in itself, providing the ability for people to make choices, grow capital and pass assets on to their family over their lives. The comments in today’s debate have underscored the need for more homes of all tenures, whether to rent, to buy or to part buy, on the way, hopefully, to fully buying in time.

On the specifics of the affordable homes programme, the whole point of the programme, which has nearly £12 billion of taxpayer subsidy—we are taking money from people that they would otherwise be able to spend themselves—is that we recognise the importance of some of the points made in the debate. Launched in 2020, that nearly £12 billion support—£11.5 billion—represents a significant taxpayer subsidy for affordable housing and a clear commitment to delivering tens of thousands of homes for sale and rent throughout the country.

Social rent has been raised by a number of colleagues, and I will come to their specific points in the moment. We brought social rented homes into the scope of the affordable homes programme in 2018 and we affirmed our commitment to increasing the supply of social rented homes in the levelling-up White Paper, which was published last year, as well as to improving the quality of housing across the board, in both the private and rental sector. I will come on to that point in a moment, when I respond to the hon. Member for Mitcham and Morden (Siobhain McDonagh). We have changed the parameters for the affordable homes programme to support that commitment, which enables further increases in the share of social rental homes that we plan to deliver.

Furthermore, the affordable homes programme is committed to funding a mix of tenures, enabling developers to deliver mixed communities that will ensure that people can buy, part buy and rent where they need to. That is why we have kept a commitment to delivering homes for affordable rent, where rent is typically capped at 80% of the prevailing rate. Yet it is home ownership that we want people truly to benefit from, and we want people to benefit from it as much as is possible. We understand the difference that an increased sense of security can make to all aspects of someone’s life and the lives of their families. That is why home ownership is a fundamental part of the affordable homes programme and why there is a significant element of homes for shared ownership, which can help people staircase up.

[Dame Meg Hillier]

The Minister said some warm words there about the need for social housing. In response to the Public Accounts Committee report, the Government indicated that local authorities would have more say over the mix of tenure in their area. In areas like mine, where the real need is for social rented housing, that requires more Government grant compared with areas where low-cost home ownership is genuinely an option. In Hackney, with the price as it is, home ownership will be very difficult to achieve. Can he flesh out how local authorities can deliver what they know is needed in their area and how Government grant will follow those decisions?

[Lee Rowley]

I am grateful to the hon. Lady for raising that point. She is an assiduous follower of this issue. I know of all the fantastic work that she and her colleagues on the Public Accounts Committee do on this area and elsewhere. I fear I might not be able to give her an absolute answer, but I will try to provide as much information as I can. There is obviously a challenge, broader than the specifics of this debate, about the amount of money that the Government have; that is not particularly newsworthy. If I may make a tiny partisan point: the Labour party, if it ever gets into Government, will have to make more choices than Opposition spokesmen indicate when they respond to such debates. There will always be a challenge around how we prioritise funding, and what the trade-offs are to do that. The commitment from the Government is here, with the £12 billion contribution that has already been indicated for allocation.

When we come forward with further information about the affordable homes programme 2021-26, I hope we will be able to give greater clarity for those authorities that seek a particular mix of housing and to expand the number of affordable homes of whichever tenure. I also hope that some of the changes coming through in the Levelling-up and Regeneration Bill will take effect, although that needs to complete its progress in the other place. We will have to see what the other place does to that Bill, which I hope will give local councils some ability to flex their approach in the area of housing.

--- Later in debate ---

[Lee Rowley]

I will not detain colleagues to that extent, but I am grateful for the confirmation that I can continue. The hon. Member for Greenwich and Woolwich (Matthew Pennycook) is keen to make a comparison. The fundamental thing that we are trying to do at the moment is weigh up a series of very challenging economic circumstances, recognising the context of housing supply, which has been a challenge for the entirety of my life. We recognise that we have to make progress for the very reasons that right hon. and hon. Members have outlined over the course of the debate. It is so important to do so, given that housing supply affects and impacts the lives of real people.

Let me comment on individual contributions. The hon. Member for Slough, opening the debate, emphasised the importance of the property-owning democracy, which I wholeheartedly agree with. I hope we can make progress on that and also address some points made by other hon. Members. He also said that there should be greater clarity on the affordable housing programme going forward. Although I am not able to give that in today’s debate, we have said that we will come back in the spring with further clarity about what is happening; there is not a huge amount of spring left, so I hope it will not be too much longer before my housing colleagues in the Department will do so. I anticipate the Department being able to provide further information to the hon. Member and others in the coming weeks.

The hon. Member for Coventry North West (Taiwo Owatemi) raised a number of points about the inherent challenges in the housing market and of trade-off. During my brief tenure as the Housing Minister back in the autumn, we had a debate in this very place about some of the issues, and she spoke then with regard to Coventry specifically. I cannot talk about Coventry individually, but I will put on record, if hon. Members allow me, the progress that has been made in the past 13 years. I realise that many colleagues will not necessarily want to point to that, but it is important for balance that we do.

Two million homes have been built in this country since 2010, and almost 1 million people—over 800,000—have been helped into ownership through schemes such as help to buy. Some 630,000 new affordable homes have been built. Last year, the registered supply of new homes increased over the previous year by approximately 10%, and I believe that the last five years have seen some of the highest rates of property building for 30 years.

A number of colleagues raised home ownership. Crucially, after a pretty linear fall from the mid-2000s under Governments of all parties, home ownership has started to increase again for the first time in a number of years. The increase is incremental—the rate is up from 62.5% in 2016-17 to 64.3% in 2021-22—but it is a movement back in the direction of empowering people to own their own properties and obtain all the consequent benefits.

[Dame Meg Hillier]

The Minister talks about home ownership increasing, but that incremental increase can hardly be seen as a victory. His is the party that introduced right to buy to increase home ownership. I wonder what the percentage is for anyone under the age of 35. Will he acknowledge that the Government have totally failed that generation in this respect?

[Lee Rowley]

The hon. Lady is absolutely right that it is not enough, but the whole point of trying to build more properties and of using programmes such as the affordable housing programme to bridge, where that is necessary, into home ownership through rent and part ownership is to boost those numbers. My point is not that there are no challenges—I acknowledged such challenges at the very top of my speech. It is to try to insert balance, if only into the record: some progress has been made over the last 13 years. A substantial number of properties have been built over that time—for home ownership, for rent and in the affordable sector—and most importantly, after a relatively clear-cut decline under Governments of all parties, the decline seems to have been arrested. There is a long way to go and there is absolutely the need for growth. I want everybody who wants to own their own home to have the opportunity to do so, but I hope that this is at least an indicator that we are moving, to an extent, in the right direction.

I have the greatest respect for the hon. Member for Weaver Vale (Mike Amesbury), and would never dream of reading my phone when he is speaking. I was specifically texting—this is both the benefit and the tyranny of having mobile devices in a debate—about the point he had raised. I regret to tell him that I have been unable to get an answer in the 40 minutes since he spoke, but I will ask the Department to write to him. I will be honest with him: I do not know whether the Department has purview here, and I do not know any of the details of the problem that he highlighted. It is always a challenge for local communities when developers are unable to complete the properties that they have indicated they will. I know that causes issues. I have a similar one in the village of Tupton in North East Derbyshire, where the developer unfortunately went out of business and the site is now mothballed. North East Derbyshire District Council is working hard to try to move that issue on. I will endeavour to write to the hon. Member for Weaver Vale either way, and will see whether the Department can provide any advice or information about the point that he raised; I am grateful for his doing so.

The hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) raised a number of incredibly important and detailed points, to which I will ask the Department and the Minister responsible to respond in detail. Part of the answer to some of her questions will, I hope, be answered by the further details that come forward in the next stage of the affordable housing programme, but I will ask for a letter to be provided to the hon. Lady with more detail about the specific questions that she highlighted.

The hon. Member for Mitcham and Morden made an extremely powerful intervention about the challenges of temporary accommodation—an issue that we all are aware of. We all want standards, quality and conditions to improve. As a former councillor in central London, albeit a number of years ago, I am under no illusions about some of the challenges of temporary accommodation. The Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), has been clear that improvements are needed in this area and has indicated that further legislation will be forthcoming. I am grateful to the hon. Member for Mitcham and Morden for highlighting her concerns, and I hope the Department can make progress in the coming months and years.

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made a very important point about the challenges of access to labour, particularly in rural areas due to geography and topography and the like. I am sorry to hear about the issues his constituents are experiencing. While housing is a devolved matter, it is important, and I am grateful that he has put on record those issues and the work he is doing to address them. He will be aware that, at least from an England perspective, we are seeking to legislate as part of the Levelling-up and Regeneration Bill in order to offer councils the opportunity—which they do not have to take up; some will choose to, some will not—to vary council tax for second homes. That will hopefully put an additional tool in the arsenal of local authorities to respond, in England, to the local challenges he has raised.

The spokesperson for the Opposition, the hon. Member for Greenwich and Woolwich, raised an important point about capacity in local planning authorities, which is an issue that the Housing Minister, my hon. Friend the Member for Redditch (Rachel Maclean), and I are both involved in. Within planning, nationally significant infrastructure projects fall under my aegis. That is different from the debate we are having today, but there are very live conversations within the NSIPs and major infrastructure realms. I know from my colleague the Housing Minister that it is the same with regard to capacity in local planning authorities and within the appeals process, where a number of applications end up in their final stages.

The hon. Member for Greenwich and Woolwich raised a number of important points about green homes. We need to make progress on multiple different imperatives and initiatives. The part L uplift, which we brought in in the summer of 2021, constituted a 30% increase and improvement in standards. That is in place now and has been for almost a year. The transition period for the part L uplift ends shortly, meaning that all houses built from now on will be 30% more efficient than previously. That is a massive increase compared to a number of years ago. However, there is a trade-off here, and we are trying to work through the issues and make progress in all aspects.

The Labour party has spent much of this debate—reasonably, in my view—saying that we need more houses, and that they need to be affordable to own and rent. We agree, which is why we are trying to make progress in this area. We also need to make progress on the environmental agenda, but those things must be brought into balance. Every single time an hon. Member stands up in this place and says, “We just need this one thing added in”, we need to understand that there is cost involved. That is where we have to make considerations. The part L uplift is a great example: we are trying to make progress environmentally, while also trying to answer the question reasonably posed by hon. Members across this place as to how we increase housing supply in general. We hope we are striking the right balance.