Affordable Housing

Meg Hillier Excerpts

Wednesday 4th March 2015 Westminster Hall

[Mr Prisk]

My hon. Friend is a brilliant campaigner on this issue in Pendle. When I was the Minister for Housing, I had the chance to go and see the work that he does. He is absolutely right: we need the collaborative approach, across the sectors and between the different agencies, if we are to get the building of these homes unlocked.

I have spoken about the need for a long-term rental policy for housing associations. My second point is that we need to match that with a long-term commitment to sustained supply for all housing tenures. I recently had the chance to co-chair—with the right hon. Member for Greenwich and Woolwich (Mr Raynsford), who was himself a very capable construction Minister under the previous Administration—a housing commission sponsored by Lloyds Banking Group. That commission brought together an outstanding group of public and private sector experts, who were crystal clear about the key issue. The report states:

“We believe that only a long-term commitment, across the political parties, will deliver the additional homes needed over the next decade. A realistic target is to complete 2 million to 2.5 million homes by 2025. To achieve this there is no single solution, no silver bullet. Rather what is needed is a larger, more competitive and diverse market in the supply of homes.”

As the report rightly says, we must not only expand the house building and private rented sector, but encourage housing associations and, as my hon. Friend the Member for Truro and Falmouth (Sarah Newton) pointed out, local authorities to contribute more. We need not only the larger contractors, which the hon. Member for Nottingham South mentioned, but more small builders and, indeed, self-building. In addition to more homes for sale, a new professional private rented sector needs to develop. We will need not only to regenerate urban areas but to establish completely new settlements as part of a long-term comprehensive approach.

On that note, I very much welcome the Minister’s statement to the House yesterday on Ebbsfleet. He is making excellent progress on that; I remember the tensions and challenges of dealing with it. That, together with the potential in Bicester and elsewhere, is really good progress. Together—not individually but together—all these different elements can give us a sustained increase in housing supply, an increase not for one year or two years, but over a decade or more.

That brings me to my third and last point, which was a key finding in the housing commission’s report. We need to turn idle public land into affordable family homes. Government, in all its forms, owns a lot of buildings and land that are either underused or, frankly, completely idle.

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

Does the hon. Gentleman therefore agree that it would have behoved the Mayor of London to sell off for that very purpose the fire stations that he has been selling? My local one has been sold for £28 million to an as yet unannounced but no doubt private developer.

[Mr Prisk]

I am not an expert on the hon. Lady’s constituency, so it would be wiser for me not to wade into that particular parish, but the Mayor is very clear about raising the number of homes built and he has been crystal clear about ensuring that we get land brought into use. The Government have established an effective register within Whitehall, but it has always proved difficult to turn that register into actual homes. The prize is great, as we discover if we talk and listen to some of the people who have analysed this. Savills, for example, estimates that up to 2 million homes could be built on publicly owned land. I welcome the recent announcements by Ministers about engaging the Homes and Communities Agency to drive that forward, and I commend Ministers’ efforts in releasing land, which should result in the building of up to 100,000 homes over this Parliament.

I contend that more can be done, however, and I suggest that we need to overhaul Treasury rules that guide public asset sales in this field. The strict application of best value rules works against long-term development partnership, and it means that we fail to use public assets to provide homes that people can afford. Instead, we need to incentivise Government Departments, agencies, NHS trusts and local authorities to become long-term development partners and to use public assets to deliver homes that are affordable to many more people. There are some good signs, and I draw the Chamber’s attention to the fact that the Ministry of Defence, which is often criticised in that regard, has managed to secure a sensible long-term programme in Aldershot.

More can be done, however. I encourage the Minister, although I suspect that he does not need much encouragement, to be ambitious in this field and to encourage his colleagues across Whitehall to do likewise. Alongside that, I would like other long-term owners of land—such as our universities, which are substantial landowners, many of the large private landowners and many of our large pension funds—to be able to work in a new legal and tax framework that actively encourages them to develop communities for all and, more importantly, homes that most people can afford.

Of all the problems that will face the next Government after May, meeting our country’s housing needs will probably be one of the greatest challenges. Many of the concerns that will be raised in this debate and others are symptoms of the wider problem—dysfunctional housing markets, which have meant that for 25 years or more, we have been building roughly half the homes we need, year in, year out. To break that long-term cycle, we need a long-term commitment across the parties to create a larger, more diverse and more competitive market in the supply of homes. There are no quick answers and no easy solutions, but if we create a consistent, long-term policy framework, we can build the homes that our constituents need.

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

Thank you very much, Mr Gray, for calling me to speak. It is a pleasure to serve under your chairmanship. I endorse every comment made by my hon. Friend the Member for Nottingham South (Lilian Greenwood) in her excellent speech, and congratulate her on securing this debate.

Housing in my constituency is simply in crisis. In my constituency, more people rent privately—30% of my constituents—than own property, and 44% of my constituents rent social housing. Private rents in Hackney are now at 54% of income, and there is a huge lack of certainty about the length of private tenancies, and about rents, which often increase just because they can be increased.

I will give a couple of examples. I have routinely been sending out questionnaires to constituents, because I have so many people contacting me about these issues. Two adults and a child live in a one-bedroom property. One full-time income and one part-time income brings them in £2,100 a month after tax, and they also have child care costs on top of that. When we compare those figures with the weekly median rent in Hackney, which is £330 a week, it does not take much knowledge of maths to work out that their income does not go very far.

I will give another example. Somebody said that a combination of having to pay high fees every time they move, and the fact that they have to move every 12 months due to rent increases and the inability to obtain longer-term tenancies, has seriously hindered their ability to save as well as settle. This issue affects not only private tenants but the community as a whole, because of the churn that we get as a result.

House prices have gone up 124.9% since 2005, when I was first elected, and the average house price is slightly lower than in Islington, at £606,000. Of course, for new social housing, there is now the edict that most social housing should be 80% of local private rents. In Hackney, that is nonsense; the sums arrived at are not affordable. Tenants, often strangers to each other, are now sharing rooms out of necessity. Then, of course, we have the invidious bedroom tax. On Wenlock Barn estate alone, in Hoxton, 74 households are hit by that tax, and they live in fear about what will happen to them. It is not as if there is available housing of the right size for them, because there is such a squeeze on need; even if they were made to move, there is nowhere for them to move to.

I have some specific local concerns. One is about non-domiciled landlords. They do not let slum properties; we do not have that many very, very bad properties in Hackney. However, the appeal of rental yield is what many properties are sold on, off-plan, which means rents go up each year, because the letting agent is on a ticket to increase their profit and that of the overseas landlord, be they in Dubai or Hong Kong. Increasingly, huge swathes of properties are sold overnight off-plan, even when developers have promised the local planning committee that they will not do that. There is no legal constraint on the number of properties that can be sold to someone overseas. I hope that both Front-Bench teams consider looking at this issue.

There is a really shocking case that I have come across recently. A national property developer in the UK employs staff whose job is entirely about arguing with planning departments for additional units of housing and for fewer units of social housing. Those staff members are paid a bonus for every additional unit that they argue up, and for every social unit they argue down. In the process, they tie up days and days of council officers’ time. In one case, nearly a whole year—more than 300 days—of council officers’ time was taken up, because these staff keep coming back, as their income depends on it. I use the word advisedly, but that practice is an immoral way to earn a living, and it is shocking when I consider the impact on my constituents.

Recently, we had a battle over the New Era estate. I will not go into that again, but private landlords there are able to sell property on, forgetting that they are selling not just property but people’s homes, which affects their lives. In London, we see our Mayor caving in to private developers. He wants to maximise luxury flats, which are often sold to overseas buyers. The local fire station in my area has been sold for £28 million, which can only mean luxury flats. That is a scandal, especially with fire response times now more than six minutes in the area. In Bishopsgate in Shoreditch, an area that has not had a social housing unit built in 10 years, the Mayor is again on the drive for a 48-storey tower block with luxury flats.

Hackney is building; it is one of the top two councils nationally when it comes to building new homes. It could do more if the housing revenue cap were lifted, and if we could see a long-term solution to this problem, which is what is needed. Again, I appeal to both Front-Bench teams. We should look at the ballooning housing benefit bill, which is pouring money down the drain when it could be better spent on building new homes that are genuinely affordable. I have a few asks. I go further than my Front-Bench team, because I believe that Hackney’s problems today will ripple out; we are the canary—Islington probably is too, in some respects—showing what will happen in the rest of the country.

We need longer tenancies. The Council of Mortgage Lenders, which I met yesterday, says that that is possible; there is no big block in the system. So why is it not happening? I applaud our Front-Bench team for pushing for longer tenancies. There also needs to be greater certainty about rents; perhaps there could be a rent escalator model. We also need to stop retaliatory evictions. There should be a landlord register, with a quality kitemark, so that tenants know what they are buying, as they would in any other area of business.

We should disbar landlords who are not fit and proper. There should be mandatory installation of fire and carbon monoxide alarms. We should change the definition of “affordable”, to break this ridiculous link with market rents, which does not have any relation to the incomes of the people that my hon. Friend the Member for York Central (Sir Hugh Bayley) referred to. I agree with the hon. Member for Hertford and Stortford (Mr Prisk) that the Treasury rules need to change, to allow the sale of public land for public benefit. St Leonard’s hospital has now gone to PropCo and the NHS, and the fire station is being sold off. All around us in my area, every possible bit of development land is being sold, not for affordable housing for local people, but for overseas buyers to live in luxury flats.

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[Emma Reynolds]

rose—

[Meg Hillier]

rose—

[Brandon Lewis]

I will finish the point I am making. The hon. Ladies have made a fair few interventions today and I want to respond to the points raised in the short time we have left. There is no direct cost to buying those homes at that discount. It makes home buying affordable to the very people that the hon. Member for York Central (Sir Hugh Bayley) mentioned. Some of those who have not been able, even with Help to Buy, to get on the ladder will be able to link Help to Buy with a starter home to make house buying accessible. From day one, fixing the housing market and the economy have been top priorities for us in government.

[Meg Hillier]

Will the Minister give way?

[Brandon Lewis]

Not at the moment, no. We have channelled new investment into every area of the housing market. We have cut the deficit to keep interest rates low for investors and home buyers. We have introduced a wide range of measures to get Britain building again, and that plan is working. More than 500,000 home have been built. There are 700,000 more homes in England, with house building at its highest level since 2007.

[Sir Hugh Bayley]

rose—

[Meg Hillier]

rose—

[Brandon Lewis]

I give way first to the hon. Member for York Central.

[Brandon Lewis]

I will give way to the hon. Member for Hackney South and Shoreditch and then deal with her points and those of the hon. Gentleman together.

[Meg Hillier]

We see in London the effects of an untrammelled Tory Administration. Private developers have free reign. There is less affordable housing. Where it is affordable, it is 80% of private rents. That applies to a number of sites, as we have highlighted. Is that the Minister’s ambition if he is in power after the election?

[Brandon Lewis]

As I have outlined, the ambition is to ensure that we are building the houses that this country needs. Those 200,000 starter homes will give people opportunities that the Labour party simply cannot match. As my hon. Friend the Member for Hertford and Stortford—my predecessor—outlined, we are at the start of a programme that is building affordable housing at the fastest rate the country has seen in more than 20 years.

The hon. Member for York Central made a good point. People often expect the challenge for the development industry over the past couple of years to have been land supply, but it is not, thanks to the changes that we made to the top-down rigours and structures in planning that stopped development under Labour. Through that, our driving of planning locally and because we have kept interest rates low, we are seeing benefits. Some 240,000 homes have been given planning permission in the past 12 months. Members touched on the changes the Government have made to finance for small building projects, which have made that finance available. We went further a couple of months ago. One area that developers consistently mention is the supply chain. I was delighted yesterday to reopen a brick factory that shut down in 2008 during Labour’s recession. It reopened on Monday and will deliver 2 million bricks a year to the industry.

The construction industry is working and hiring at the fastest rate since 1997, and the hon. Gentleman is right that that delivers the second challenge to the industry, which is skills. One thing we can all do—I hope that all parties agree on this—is encourage more people to come into the sector. It is a phenomenally rewarding career, with wide opportunities at home and, potentially, abroad. There are a wide range of careers in the industry. We need to change some of the perceptions of the construction industry to encourage more people into it. That is why I hosted a skills summit with the Minister for Skills and Equalities, my hon. Friend the Member for Grantham and Stamford (Nick Boles) just before Christmas at the fantastic new Olympic park. Developers, apprentices and colleges discussed those issues to try to ensure that we are delivering the skills we need for the future. Construction is no doubt one of the opportunities we have to see more jobs coming to this country, beyond those we have already seen.