Peter Dowd
Main Page: Peter Dowd (Labour - Bootle)Housing and Planning Bill (Second sitting)
Peter Dowd Excerpts(8 years, 6 months ago)
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Kevin Hollinrake (Thirsk and Malton) (Con)
Q 117 This Bill, taken in the round, is designed to tackle the fundamental problem in the housing market, which is lack of supply. And the lack of supply is partly about who is going to build the houses of the future. I am thinking particularly of SMEs, Mr Berry. SME house builders used to build about 100,000 homes a year in the UK. I think that at the moment they are building about 18,000 homes every year. Is there enough in the Bill to help SME house builders?
Brian Berry: You are absolutely right. The number of house builders has declined rapidly over the last 25 years. In 1988, two thirds of all new homes were built by SMEs; that fell to 30% last year. There is a desperate need to get more SMEs into the market if we are to deliver those homes. The challenge, of course, is that there are barriers to SMEs coming into the market. Those barriers fall outside the scope of this Bill, but access to finance remains a concern for SMEs—62% of our members say it is a barrier to bringing forward developments—so it would be useful if the Government considered some form of help to build, perhaps underwriting homes. That would be very beneficial.
The other key issue that affects the house building sector is the growing skills crisis and how we are to address that, because if we do not have the skilled labour, we are going to have a serious problem. It is already an issue. We know this from our own surveys: 60% of our members are having problems recruiting bricklayers, and 50% are having problems recruiting carpenters. It is right across the board. There are a number of issues that are outside the scope of the Bill, but that are absolutely fundamental to delivering the number of homes required and that we all need to work with Government on.
Peter Dowd (Bootle) (Lab)
Q 118 Could I get a clarification from Mr Fletcher? I think you referred to the issue of local authority plans being out of date with regard to industrial use.
Ian Fletcher: That is a recent piece of work by one of the big planning consultants, Turley, which has looked at the evidence base that local authorities are using. More than 50% are pre the introduction of the national planning policy framework. Significant periods of time have passed and significant changes in policy have passed since they put their evidence base together on their requirements for industrial land.
Peter Dowd
Q 119 In relation to brownfield sites, do you have any estimates of the volume of brownfield land that would be viable for housing development?
Brian Berry: I’m afraid we don’t.
Ian Fletcher: You caveated your question with the word “viable”, and I think that that is wise. I have seen estimates that you could build as much as 1 million homes on brownfield sites in the UK, but they have to be viable; they have to be connected. Some brownfield sites actually have very good ecology and should be left as brownfield. That 1 million is hypothetical and it is not necessarily real.
Andrew Whitaker: I would not underestimate how much of that brownfield land is already coming forward for residential development. Over half of the figure of 1 million which is often touted is already within the planning system, and it is already either allocated or being developed for housing. The house building industry does already prioritise brownfield development.
Peter Dowd
Q 120 There is an argument that because local authorities are being pushed in relation to the national policy framework, they are putting sites into the planning framework which are not necessarily viable in relation to brownfield. Is that not the case?
Andrew Whitaker: That is our fear. Encouraging them to maintain a register is certainly a great idea in theory. Being able to pinpoint the land you want to see being brought forward for development is an excellent idea. However, if enough work is not done in terms of viability, then the amount of land which could come forward and which is viable, as Ian said, could be overemphasised or over-egged.
Peter Dowd
Q 121 I have one more question on that. Do you have any idea at all of the cost of the remediation of brownfield sites nationally that you as a developer would not want to pay for, or that developers would not want to pay for?
Andrew Whitaker: No. I think that is a bit like asking us how long a piece of string is. Every single site differs in terms of the amount of money needed to make it viable. That is not just in terms of the actual viability of ensuring the land is developable, but in terms of meeting the landowner’s requirements for the price of the site, meeting the developer’s requirements for the profit element on the site, and meeting the planning obligations on that site to make sure that the infrastructure is provided. That differs on a site by site basis. Over the last few years, where viability has become more of an issue in planning and local plans, we have found that making these decisions on a generic basis invariably does not allow for the massive fluctuation in site-by-site assessment.
Chris Philp (Croydon South) (Con)
Q 122 I would like to continue this line of inquiry in relation to permission in principle and the brownfield register. To get straight to the heart of this, I ask each member of the panel to comment on whether they think that those measures would increase, decrease or have no effect on the number of housing starts we see in our country.
Brian Berry: I think the new consent of permission in principle is a forward step. That will help to bring forward more SME applications. The brownfield register is a positive step, because there are very small parcels of land which our members could build on. Having that transparency will be a help. That would encourage more development.
The Chair
Keeping an eye on the clock, may I ask for both questions and answers to be crisp and to the point, please?
Peter Dowd
Q 151 According to my figures, the number of people living in the private rented sector has increased by 2.5 million in the last five years. If only 5% of those people were affected, that would be 125,000 people affected by rogue landlords. Are the penalties for rogue landlords and agents sufficient to protect tenants?
Campbell Robb: First, I welcome the Government’s commitment in the Bill to further strengthen the legislation around the private rental sector. Just before the end of the last Parliament, we had some strong wins in terms of rogue landlords and revenge evictions, and there are more welcome things in the Bill. We would be interested in understanding whether there is more that we could do to prosecute rogue landlords and I think we could have a helpful discussion about that. So I think we could go further; that is what we would like to see and we would be very happy to share with the Committee and others about how we could do that. A relatively small percentage of landlords are rogue—I am conscious of not going on too long, Chair—but the stronger the message that we can send out, the stronger the power that local authorities have, the more we can do on this. But there are some welcome measures in the Bill.
Peter Dowd
Q 152 Do you agree that if only 5% of people in those tenancies were affected by that, that is 125,000 people? That is 125,000 people too many.
Campbell Robb: It is, absolutely, and every day we see people coming into our surgeries and phoning up our helpline who are really at the hands of some very bad behaviour, and we would absolutely support doing more to stop that type of behaviour.
Stephen Hammond (Wimbledon) (Con)
Q 153 To follow on from that, you both give an unequivocal welcome to part 2 of the Bill. Presumably you are also keen that the database is effective. Looking at Criminal Records Bureau checks and their successor, it seems to me that a database mechanism has been as effective in driving up standards. Are you optimistic that it will do the same in this area?
Jon Sparkes: Yes, I think it will. I think the Bill can actually go even further. Certainly, sharing information about banned landlords and banned letting agents is absolutely crucial and will have an impact. You can see landlords going across local authority boundaries. Once a landlord or letting agent is banned, the professionalising of the sector by making sure they undertake accredited training before they are unbanned is important, so there are areas where we would even support amendments that would take it further—all of which is caveated with proper protections for tenants. If you are the tenant of a banned landlord, you need an awful lot of protection, otherwise you just become evicted by default.
Campbell Robb: I agree with all that. I want to put on record that we have one caveat to unequivocal support, which is about the clauses about abandonment. It may not be the time, Chair, but I would like to share that there are potentially some unintended consequences of bringing that forward and of the lack of court oversight or local authority oversight in making sure that the proposals achieve what is wished but that they do not give a licence to some landlords to use them in a way that we would not support. I just want to put that on record.
Mr Jackson
Q 188 So the Government are doing you a favour in prompting you to collect information better, to use the resources at your disposal better. Would you agree?
Tim Pinder: I am not so sure it helps, no.
Peter Dowd
Q 189 With your permission, Mr Gray, I will use Mr Patchitt as a case study, to tease out an issue. Many of the houses under your control, Mr Patchitt, are in my constituency. I have some figures here. You say that you have 53,000 homes. Is that correct?
Mark Patchitt: Yes.
Peter Dowd
Q 190 So, on the figures we were given before, around 10% of them were sold. Is that a fair figure? Let us take that as an example. That is 5,300 at £85,000 a home, as you were saying before, which is £450 million, if my maths are correct. The full receipt to replace is not received because of the difference between the replacement cost of £100,000 as opposed to £85,000. The cost to replace at £100,000 leaves you short of about £20 million, does it not, if you were replacing like for like?
Mark Patchitt: It could do. There are different ways we can procure homes. This is an important point. Currently, we are able to acquire some homes under section 106 agreements with developers. That discounts the cost of rented homes, so we are able to get properties purchased from developers at around £80,000 in the north at some point, some time. That would help offset some of that, but to build new would definitely cost more. We are looking for a balance and we may have to consider some affordable home ownership to replace that.
Peter Dowd
Q 191 Would you agree that, if you had the absolute guarantee, or at least the guarantee in the Bill, that you were going to get, not just pound for pound, but perhaps £1 for £1.10, to rebuild all the houses that have been sold—
Mark Patchitt: It is a national offer. Nationally, as a sector, we say we will replace one for one. It may be that in some parts it is a bit more of a challenge for somebody to replace exactly one for one, but somebody might be able to replace a little bit more than one for one, and as a sector we will do that. We have signed up to the fact that roughly one-for-one replacement should be possible, if we get full compensation for the sale of the property.
Peter Dowd
Q 192 Can I pursue this further? You are a charity and are concerned with your charitable status and the people you deal with. You are not interested about what is happening in London or Manchester, or wherever it might be. The bottom line for you as a charity is whether you have the guarantee that you will, pound for pound, or £1 for £1.10, get that money back. Have the Government given you that guarantee in the Bill?
Mark Patchitt: The voluntary offer that we have signed up to—we have said why we would sign up to it—is that we get full compensation for the sale of our properties. If that falls, I do not see how we could provide the one for one, and our board would probably take a different view.
Peter Dowd
Q 193 That brings me to the question: are you confident that the Bill—not what Ministers say might be there—guarantees housing associations the full value of homes sold through the right to buy?
Mark Patchitt: The Bill mentions grants, and I have mentioned full compensation for the right to buy. Whether that is in the Bill or outside it, and how it is legislated for, I leave for others to decide.
The Chair
Before I call the next speaker, it may help the Committee to know that we expect a Division in the Chamber at 4.40 pm. Therefore I intend, with the Committee’s agreement, to wind up this session at 3.55 pm in order to get the next panel in before the Division. That gives another 10 minutes in this session.
Mr Jackson
Q 222 If they give their correct names, which anecdotally is an issue.
My second and final point is that you have obviously read the whole Bill. Some evidence was given to us earlier by the British Property Federation about the build to rent fund, and about the fact that institutional investors, for some reason that was not clear to me—perhaps I am a bit obtuse—are not interested in putting their money into build to rent when there are starter homes on the large-scale site, whether they be flats or houses. Are you in a position to make a value judgment about that assertion?
David Cox: I am afraid I have not heard any evidence to that effect. At the moment, although there are several in the pipeline, only one build to rent scheme is functioning in the UK: the old Olympic park, which is now Get Living London. It works very well, and it has three-year tenancies as the standard, but it has caused problems for people trying to exit the tenancy, potentially to buy a property of their own or move overseas.
We want to see more institutional investment. Going back to the housing shortage, the large pension funds and other financial investment vehicles have the ability and resources to build the housing we need. They are much more likely to be at the more professional end of the sector. All of Get Living London’s staff are fully qualified through the only regulated qualifications in the sector. Therefore, they have the desire and the reputation. Large companies cannot have their brands tarnished by poor property management. Therefore, they will be at the more professional end of the sector. They give tenants higher-quality properties and higher-quality service. We want to see much more of that.
David Smith: We have actually made proposals to the Treasury to try to get smaller landlords to be more interested in a “build to rent to sell” model. We are effectively trying to move shared ownership from just the social sector into the private sector. We have suggested that the Treasury could expand the Help to Buy scheme to tenants who wish to buy their own homes, and possibly offer a capital gains tax reduction to landlords who reinvest that money in a new property. We are trying to kick-start a new concept of private landlords seeking to buy property to rent it to tenants, with the aim of selling it to those tenants and then buying other new property in a continuous cycle.
Our view is that it is important to do everything. So many homes are required that simply throwing all our eggs into one particular sector is not going to work. We almost have to take a scattergun approach—although that is an unfashionable thing to do—and promote as many possible ideas as we can, provided they do not cost a vast sum of money, to get as many properties as possible. Once we have tried a lot of things, we can start to core it down to the ones that are the most effective.
Peter Dowd
Q 223 I suppose the point about regulation relates to rogue landlords. As a health and care professional, I pay an annual fee for my regulation, and if I practise inappropriately I am challenged. Is there any reason why that ought not to happen in relation to landlords, for example, with application to rogue landlords?
David Cox: Absolutely not. We have been campaigning for it for 20 years, and we are the closest there is to a regulatory body in the lettings industry. We do our best to regulate our members, and we would like to see a statutory footing for that. We are, of course, talking about people’s homes. For landlords, it is probably the largest investment they will make, beyond the house in which they live.
The Chair
Thank you, Mr Cox. Thank you to our three witnesses.
Ordered, That further consideration be now adjourned. —(Julian Smith.)