Meg Hillier
Main Page: Meg Hillier (Labour (Co-op) - Hackney South and Shoreditch)(10 years, 9 months ago)
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Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Thank you, Mr Howarth; it is a pleasure to serve under your chairmanship.
In Hackney, the borough that I represent along with my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), a little more than half of residents live in social housing, but I will not talk about that today. I associate myself, however, with the comments made and the concerns expressed by my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry).
One of the increasing challenges in my constituency has been the growth in the private rented sector. Throughout Hackney, owner-occupation is 23%, and the private rented sector is more than 26% of households, so more people rent privately than become home owners. I pay tribute to the organisation Digs and to Hackney council, which are looking at how there can be better rights for private renters, but there are systemic problems, which I want to bring to the Minister’s attention.
The right to buy has been mentioned, but in Hackney last year the number of right-to-buy purchases doubled as a result of Government policy from 35 to 70. As my hon. Friends have said, the price of housing is now so high that even with discounts and so on from the Government, there is not much opportunity to buy. There is a huge gulf between someone who rents in the social sector, or indeed in the private rented sector now, and the opportunity to buy, because house prices are so high. At March 2013, for example—nearly a year ago—the average terraced house in Hackney was worth more than £500,000 and the average flat £363,000. As colleagues have said, even someone on the generous salary of an MP could not buy a flat in my constituency or neighbouring ones. There is a real challenge and issue there.
The depletion of affordable housing to rent is not an answer to the problem. The extension of the right to buy, which may appeal to some in the Conservative party, does not solve any problems for my constituents. I am delighted that Hackney is building some new social rented homes, but that remains a drop in the ocean. I ask the Minister what the Department is doing to allow more money for that to happen. Sorry, I ought to have said this at the beginning: I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Touching on the private rented sector, the army of landlords in Hackney—throughout London, I hear—is largely made up of two groups: overseas investors, who use London property as a cash asset; and private individuals. According to figures from the Residential Landlords Association, 89% of landlords are private individuals. People in Hackney, or elsewhere, sometimes need to relocate outside London. They own a flat or home in Hackney, but the problem is that if they were to sell and move somewhere outside London, but then needed to come back, the difference in property values is so great and so entrenched that there would be no prospect of them returning to the same level of housing. Some therefore hold on to their property, and that contributes to the army of private landlords.
That is one of the reasons why the council in Hackney is setting up a lettings agency of its own—to work with some of those individuals, professionalise them and make an experimental attempt to get longer-term tenancies with reluctant landlords who are nervous about their position. It is crazy when people hold on to assets for the reason I have outlined, rather than just to have a home. That is a challenge. My hon. Friend the Member for Hackney North and Stoke Newington summed up very well the challenge posed by overseas landlords. There is a need for disincentives to that approach to housing. We want residents and communities, not absentees.
Interestingly, when Hackney council looked at regulation of landlords, we discovered that we do not have as many rogue landlords as neighbouring boroughs such as Newham; we do not have the “beds in sheds” problem. There are some, but it is not the main problem. For us it is the other issue of overseas individuals that causes many problems. I have questions for the Minister. House prices have gone up, but even with modest borrowing on high-value properties in Hackney, many landlords will not be making a great deal of money. They are tied to certain mortgage commitments; this is because of the army of individuals renting privately in the borough.
Are the Government considering vehicles to encourage more long-term professional landlords, who will want to let for a long time, for whom the question of rental income is tied more to an investment vehicle than to personal financial circumstances, so that rents can remain stable, and tenants can sign up knowing that they can stay in the long term, with clear rent limits? I do not mean rent control as suggested by my hon. Friend the Member for Hackney North and Stoke Newington. There can be problems with that, as there were in New York, where there has been a black market in low-rent properties.
What is the Minister doing to persuade mortgage lenders to allow longer-term tenancies in general? Often, that is where the brake is. Mortgage lenders will not lend on, for example, properties above the fifth floor in a block of flats, or those that are concrete system-built. My hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) raised the concern about former right-to-buy properties being sold on repeatedly. Again that is an issue in Hackney, partly because someone who has exercised the right to buy on a high-level property cannot then sell on to anyone with a mortgage, which limits their options. That means that more of the non-resident landlords—businesses that do not need a mortgage—take them on. Is the Minister’s Department thinking about supporting models such as Hackney’s letting agency, which is attempting to improve the situation locally? What it is doing is a drop in the ocean, but we hope that it will lead to other things.
Will the Government examine the impact of rents and house prices on the stability of the work force, particularly in the public sector? A 2001 report from the London assembly on housing for key workers, which I chaired, said that there was a crisis in relation to middle management staying in London. Things are even worse now. We shall lose talented public sector professionals who cannot afford to stay.
Finally, what discussions are the Treasury having on capitalising the huge housing benefit bill, to use that as a fund to allow councils such as Hackney to build properties for social rent, and to pay off the mortgage over 25 years through the rents? That would be a far more productive use of the huge housing benefit bill than chucking money down the drain and into the hands of private landlords.
Emma Reynolds
The truth is that the housing benefit bill is going up. The Government should try to shift Government subsidy away from benefits to bricks, but when we take into account the bedroom tax and the cap, in London in particular, on the amount of money that families can receive in housing benefit, we see that things are being pushed in the wrong direction and that the housing benefit bill is going up, not coming down.
Meg Hillier
My hon. Friend may be too young to remember this, but when the Parliamentary Secretary to the Treasury, the right hon. Member for North West Hampshire (Sir George Young), was Housing Minister he said that
“housing benefit will take the strain.”
It would be useful to hear this Minister’s view on housing benefit now that the problem has escalated.
