British House Building Industry
Debate between Richard Bacon and Matt Western(5 years, 2 months ago)
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Mr Richard Bacon (South Norfolk) (Con)
That is very helpful, Madam Deputy Speaker.
May I start by congratulating the hon. Member for Mitcham and Morden (Siobhain McDonagh) very sincerely? I realised how strange times are in this particular area of housing debate when I attended a lunch at the Institute of Economic Affairs, where the hon. Lady was the guest speaker. I realised that it is the case not so much that there is political cross-dressing going on, but that many of us are searching for solutions outside the traditional parameters; and that is because, as the title of the White Paper from January 2017 said, we have a broken housing market. We might have some differences about the causes of the situation she accurately describes and about the best prescriptions for solving it, but it is absolutely clear that supply does not rise to meet demand. She used the word “market” in her last couple of sentences, which rather implies that we have a market for housing, but we have no such thing; we have a tightly controlled oligopoly, and actually supply does not rise to meet demand, because most suppliers do not wish to damage their own profit margins by oversupplying the market so that prices fall. We would not expect that in any other area of business and we should not expect it in housing.
Fundamentally, we need to change the model. If we have a broken housing market, we need to create a different ecosystem, and one of the fundamental things we need to do is increase choice for consumers. It is by far the single biggest thing people spend money on —whether renting or buying, it is the thing that people spend most of their monthly income on—but it is the thing over which they have the least choice. In any ecosystem in which the consumer had any say, it would be the thing over which they had the most choice.
As well as increasing choice, we have to lower barriers to entry, and that is where I want to bring in my favourite subject, mentioned by my hon. Friend the Member for Dartford (Gareth Johnson), namely self-build and custom house building.
Matt Western
On choice, I totally agree with the hon. Gentleman’s point. One of the critical things, in addition to self-build, is the reintroduction of all the small and medium-sized enterprise builders we lost after 2007-08. Apparently, a quarter of all houses built are built by SMEs, whereas it used to be two thirds.
Mr Bacon
In 1988, it was indeed two thirds. If we increase the regulation and make it more difficult to get hold of land, it is the SMEs that will go, because only the big firms with the big balance sheets can afford it. It is a very risky enterprise, and actually local planning authorities prefer dealing with a small number of large companies because it is easier for them. That is one of the other things we have to change.
I am accused of wanting everyone to learn how to be a builder and build their own house. It has nothing to do with doing it yourself. It is very important to stress that. It is about self-commissioning and giving the customer more power. I will be briefing the Minister next week on the terms of the Self-build and Custom Housebuilding Act 2015, which commenced three years ago in April 2016, and the way it was augmented successfully by the Housing and Planning Act 2016, so that now the more people who are on the local register, the greater the legal obligation on a council to provide suitable planning permissions.
The point about having individuals and associations of individuals under the terms of the legislation is that it could apply to anybody. It could be used by school governors wishing to use the provision of a serviced plot of land as a recruitment and retention tool; by local social services directors trying to recruit social work managers in parts of the country where it is difficult to find the right calibre of social worker; by NHS trusts trying to accommodate staff, whether young junior doctors, paramedics or ambulance staff; by local Army commanders trying to retain that very expensively trained staff sergeant with 20 years’ experience; by the Royal British Legion and other veterans groups trying to accommodate veterans; by probationers and ex-offenders trying to make sure that ex-offenders coming out of prison have accommodation that is not the drug dealer’s sofa; and by the homeless themselves—I have seen just outside Berlin, in Potsdam, homeless single mums building their own accommodation for an affordable rent.
That brings me to my next point: it has nothing to do with tenure. One can use self-build and custom house building both for private ownership and for all kinds of affordable accommodation models, including mutual housing co-operatives and various other types of social landlords.
I am keen to keep my remarks brief, but I want to say a few things to the Minister about what the Right to Build Task Force, which I have been involved with for some years, is now looking for. We had £350,000 of funding from the Nationwide Building Society, and with that we can evidence an additional 6,000 to 9,000 houses added to the pipeline in the last three years. If we can do that with £350,000, think what we could do with some serious money. I would like the Department to take on the funding for that, but also as part of a help-to-build team installed within Homes England with the task of facilitating the delivery of service plots, buying land and working with local authorities and other public sector partners on public sector land for a range of client groups, especially the young and those who have been most marginalised. That team should also reach out to anybody who wants to get a service plot so that we reach a point where someone can go to the plot shop in the local town hall in their home town and find a plot of land as easily as people can in the Netherlands, where I have seen it done.
We have to put help to build on a level playing field with Help to Buy. The Government are currently planning to spend £22 billion on Help to Buy, subsidising demand, when we should really be subsidising supply. If one wants more of something, then subsidise it and it will happen. I know from many people I have spoken to, including Treasury Ministers, that there is a desire to do something about the growing cost of Help to Buy. The obvious thing to do is to wean people off Help to Buy—a subsidy for demand—and wean them on to a subsidy for supply, thus increasing supply.
We have to remove the regulations that currently allow local authorities to charge people to be on the register each year. Most do not, but Camden and Islington councils charge £350, and people do not get any guarantee of a plot for that. That should be revoked. I said that to Gavin Barwell when the regulations were introduced. I was not put on the Committee for some reason, even though it was my own private Member’s Bill that became the Act, but I went along anyway and spoke. He said on the record—I can show this to the Minister—that if it proved to be a problem, he would take a look at it. Although he is no longer the Minister, the Government were committed to looking at it. I can tell the Minister that it has become an issue and we should now revoke these regulations. The charge is supposed to recover the cost of keeping a register, but that is really very small—it can be done in an exercise book kept in a drawer or on a spreadsheet.
We need to introduce a series of specific planning reforms, particularly allowing for exception sites where councils are not fulfilling their legal obligations. We need to make it clear that the national planning policy framework has a presumption in favour of sustainable development in circumstances where councils fail to meet their duties under the legislation, irrespective of whether there is a five-year land supply, in terms of providing service plots. We need to introduce changes to the planning system that provide greater predictability to reduce the planning risk—for example, through the compulsory use of form-based codes or through local development orders. We need to take forward the proposals in the White Paper to facilitate land pooling, which has worked very successfully in Germany and elsewhere on the continent.
We do have a broken system, and doing more of the same will not produce a different result. We have to think differently and do differently. I encourage the Minister to take that responsibility seriously.
Housing
Debate between Richard Bacon and Matt Western(5 years, 7 months ago)
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Mr Bacon
Yes, I do, although I could easily get into a long discussion about viability that would consume the rest of this debate, which I cannot do. There are big problems with the whole concept of the way in which we calculate viability. However, I congratulate the Government on helping Cheltenham bring forward what sounds like a very important scheme.
The Right to Build Task Force has been going for two years. We have scraped together £300,000, courtesy of the Nationwide building society’s charitable foundation, the Nationwide Foundation. Over 50 organisations have been helped, of which 60% are local councils, with the rest being community groups, landowners and developers. There is a whole range of examples of its work. Aylesbury Woodlands in Buckinghamshire will have a project where 15% of all the new homes are custom and self-build. Cornwall has an ambition to bring forward up to 1,000 serviced plots across the county. I am looking around for my hon. Friend the Member for North Cornwall (Scott Mann), who arranged the meeting we had with the Prime Minister on this very subject and who is a passionate believer in more serviced plots. North Northamptonshire has a plan whereby as many as 10% of homes could be custom and self-built across several different local authorities. There are rural areas such as Eden in Cumbria, which is looking at a range of opportunities for affordable homes for local people. King’s Lynn and North Norfolk, in my own county of Norfolk, has agreed an action plan to drive up delivery across the area with landowners and smaller builders. A lot is going on already, but the thing is that there could be very much more going on.
This is the fundamental point. It is a quote from Andrew Baddeley-Chappell, a former director of Nationwide building society, who is now the chief executive of NaCSBA, while still chairing the Bank of England residential property forum. He has said:
“Custom and Self-build can deliver more and better homes that more people aspire to live in and that communities are happier to see built.”
An exegesis of that would basically cover most of what I want to say.
If we want more homes, we have to build them in a way that people want. At the moment, the problem is that most local people feel they have no say or voice in what gets built, where it gets built, what it looks like, how it performs—its thermal performance and therefore what it costs to run—and, absolutely crucially, who gets the chance to live there. If we change all that, we change the conversation. As the right hon. Member for Leeds Central (Hilary Benn), the former shadow Secretary of State said, we need to turn NIMBYs into YIMBYs. Prince Charles put it even better when His Royal Highness referred to BIMBYs—beauty in my backyard. We need to create an environment in which people actually welcome housing. We have reached the tipping point now in that more people want it than do not, because people have begun to realise how serious the crisis is.
As the Minister would expect, I have a small number of specific asks. The first is that we should have more Government support for the taskforce. We have already had some. I persuaded my right hon. Friend the Member for Bromsgrove (Sajid Javid), when he was the Housing Secretary, to lend us a civil servant—a qualified planner and career civil servant. He would prefer me not to mention his name, but I will because we are so indebted to him. His name is Mario Wolf, and he directs the work of the taskforce. We are very grateful for the loan of Mario Wolf from the Ministry of Housing, Communities and Local Government. He has done an enormous amount with very little in the way of resources. I mentioned some of the work earlier.
It is of course true that if we had more Government support, we could do more. The Help to Buy programme, which I will come on to in a moment, has so far spent £10.6 billion, and plans to have spent £22 billion by 2021. In other words, 35,000 times more is spent on subsidising demand than on a scheme to subsidise supply, albeit indirectly by helping to facilitate and increase choice for consumers—except, of course, that the Government are not actually paying for it; Nationwide building society is paying for it. I hope to have a discussion about that with the Minister at some point, because we are of course implementing Government policy. If hon. Members read the housing White Paper, they can see that we are implementing Government policy. If they read the Homes England strategy, it is very clear that the strategy calls for diversification of housing.
The second thing I would like the Minister to consider is a review of the planning guidance on custom and self-build housing—the guidance that supports the revised national planning policy framework—because at the moment it is outdated. Three things need urgent attention. On land allocation, many councils do not even know if they are allowed to allocate land specifically for custom and self-build housing, even though they are, and councils such as Bristol City Council are already doing so.
We also need clarity about what counts. Some local authorities are gaming the system, and in some cases local authorities are not clear what counts towards their legal obligations to provide permissioned plots of land. Some councils are allowing the conversion of holiday lets into private dwellings under the happy delusion that that counts towards meeting their legal obligations under the right to build legislation, and some of them may be in for a rude awakening at some point.
There is also the issue of viability. For as long as one has viability assessments, the Government need to look carefully at how they should work in relation to custom and self-build; they will not necessarily be the same as for market housing. I would be grateful if the Minister engaged with the taskforce on updating the guidance generally, so that it is more fit for purpose.
My third request is about the Planning Inspectorate. It is absolutely imperative that Government planning inspectors properly apply the current provisions of the legislation when they determine planning appeals and when they examine local plans. There is clear evidence that that is not happening as it should—mostly because planning inspectors are unfamiliar with the law in this area, which is still quite new. The obvious answer is to have training for inspectors. The Secretary of State has agreed with me at the Dispatch Box that we should do that, although it has not happened yet. I urge the Minister to pursue that and engage with the taskforce in identifying exactly what training is required.
We need something to help raise consumer awareness. Most people would like to commission a project of their own at some point in their lives; 1 million people would like to do that in the next 12 months, yet only 12,000 to 15,000 do. The reason is that it is very difficult to get a serviced plot of land. If getting one were as easy as it is to go into a Ford dealership and buy a Ford Fiesta, far more people would do it.
We are spending a significant amount of public money on housing, but at the moment I am not convinced that we are not simply making the problem worse. Help to Buy will have spent £22 billion by 2021 on helping 360,000 households. If we divide one figure by the other, we get £61,111—that is per household. We should be spending that better. At the moment, we are propping up an oligopoly that performs well financially for itself, with some horrible results, while making itself unpopular with consumers who cannot afford its products.
Mr Bacon
I am sorry, but I will not give way—only because of the lack of time; I need to leave the Minister a couple of seconds.
What did Adam Smith say?
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
The aim of public expenditure on housing should be to lower barriers to entry and increase choice, so that people can have the houses they want. If we get this right, we can engender a revolution in this country in how housing is done. If we get it wrong, we will pay a high price at the ballot box: almost nobody between the ages of 20 and 40 can easily, at a price a normal person can afford, dream of having their own place, even though 86% of people in this country want to. We need to design and redesign a system that allows them, and everyone else, to achieve their aspirations.