Housing Supply (London)

Rupa Huq Excerpts

Wednesday 15th July 2015 Westminster Hall

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I beg to move,

That this House has considered housing supply in London.

In the 1937 novel “Coming Up for Air” by George Orwell, the narrator tells us that his neighbours all think they have bought their own homes, and remarks,

“they don’t, the building society does”.

Although it was an inter-war satire of social mores in the suburbs, many Londoners now in precarious employment and accommodation would welcome the possibility of being beholden to the building society—they may even kill to have a mortgage. As was written in the paper the other day:

“Increasingly…owning your house is the preserve of the rich. Home ownership levels in England are plummeting just as new homes are shrinking”.

That was not in the Morning Star or the Socialist Worker; it was in The Sunday Times property section. This debate is supposed to be on the housing supply in London, but it would be no exaggeration to say that it is on the housing crisis in London, as that is what we now face.

I will base my observations on having been the MP for Ealing Central and Acton since May and having lived in Ealing since 1972. The seat is mixed in terms of tenure and nature, and spans urban and suburban densities. There are multiple issues relating to housing in London: the first-time buyer market and the resulting so-called generation rent; the numbers of young people living in shared houses, or even with their parents, right up to their 30s; the ability of councils to build houses with proceeds from sales; the disastrous new right-to-buy policy; the axing of Labour’s decent homes standards; the changing definition of affordability; and the dwindling number of key workers in the capital.

Housing is a vital issue everywhere, but in London the scale and gravity of the crisis—acknowledged by the commitments to build more houses in all parties’ manifestos—is particularly pronounced. Meanwhile, in popular mythology, everyone in London is living on caviar, quaffing champagne and Pimm’s, and the streets are paved with gold. According to Land Registry figures, London continued to see the highest price rises in the country. In March, prices rose by 11.3% to an average of more than £462,000. The rise was 5.3% nationally, with the average property price a much more modest £178,000. So London is different.

For my constituents, the average property price is now £535,319—17 times their average annual take-home pay of £31,000, according to the National Housing Federation. We also have the dubious distinction of being the constituency with the third highest number of private renters and of having the highest private rents in a marginal constituency, according to Shelter’s pre-election report. Among other things, that report found that 0% of housing in my constituency is affordable for a typical young couple, that it takes 28 years to save for a deposit and that private rents went up by 14.2% in one year. It is no wonder that only 50% of London’s households are owner-occupied, compared with a national average of 64%.

The average age of an unaided first-time buyer in London is now 37, so my first question for the Minister is: what does he predict it will be by the end of his party’s term in office? Will we soon be “Turning Japanese”? In that country, people bequeath mortgages from generation to generation.

[Mr David Burrowes (Enfield, Southgate) (Con)]

I congratulate the hon. Lady on securing what is an important debate for all those across London who are concerned about this No. 1 issue. Will she be speaking about some of Ealing’s significant housing regeneration schemes, which are making people in other parts of London very jealous?

[Dr Huq]

Yes, I will come on to some of the more noteworthy schemes in the constituency—just hang on in there and I will get to that.

I do not want to brand all private landlords as neo-Rachman rogues. According to the post-2015 election Register of Members’ Financial Interests, 142 MPs declared rental income under the category for land and property in the UK and elsewhere, in which annual rental income that exceeds £10,000 must be declared. That is 22% of MPs—just over one in five. There must be some decent ones among them.

It seems illogical that nine out of every 10 pounds spent on housing in this country goes on housing benefit, including for properties that went into private hands under the right to buy and are now rented back to councils as emergency accommodation to combat homelessness, which we have seen manifested in mushrooming night shelters, soup kitchens and food banks across the capital. Although red tape is often condemned and flexibility championed, I am proud—despite Labour losing the election—to have stood on a platform of reining in the violent price rises that lead to instability for tenants. We also need minimum standards, not only for tenants but for the letting agencies that can charge sky-high fees, in the hundreds of pounds—I have never understood what for; a couple of references, if that.

Renting is no longer just a transitory stage for people in their 20s; it is the new normal, and it is becoming routine for people further up the age scale, including many professionals in my constituency. A new staffer started with me the other day. He is in his 20s and on good money, but he is sharing 12 to a house, with a shared sitting room and kitchen. At that stage of life, “Who Stole My Cheese?” should not be a way of life, and there are older people than him in the same situation.

I am now in my 40s and first bought, pre-boom, in the 90s, but it seems that people a bit younger than me or who were not as quick to buy have missed the boat. That includes people with kids. I see them every day on the school run, and they are quivering at the prospect of the landlord selling off the property any minute, meaning that they will have to move on and find new schooling for their kids. For the people who did not buy, it seems that the generations before have benefited from rising equity and pulled the ladder up behind them.

In his new book, “Injustice”, Professor Danny Dorling says that in 2015, the combined value of houses and flats in the London boroughs of Kensington and Chelsea, and Westminster is worth more than the entire annual product of Denmark, the world’s 35th largest economy. That is a stark reminder of how London is different, and that applies to the suburbs too. The road where I grew up was not built for rich people. Opposite us lived Mr and Mrs Cotter—this was the ’70s: we did not know people’s first names—a postman and a dinner lady with two kids. Yesterday, I googled our old postcode, W5 1JH. No properties were for sale there, but all the homes on the neighbouring Greystoke estate, which are largely semis, were worth slightly plus or minus £1 million. There is no way that a postie and a dinner lady could afford to live in that road now—indeed, no public sector worker could afford any house in any part of my constituency on the open market.

The other day, I met our local chief superintendent, who told me that 60% of Met officers now live outside the M25, far removed from the communities they serve. Every school I visit locally tells me that it can get young teachers in to train, but as soon as they want to settle and put down roots, they are lost to Slough or beyond, because housing in west London is too prohibitively costly for them to stay.

The current Mayor of London, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), is notable by his absence—where is he when you need him? I have had my brushes with him, it must be said, but it was he who claimed that not only property prices but benefit changes in this city were causing “Kosovo-style social cleansing”. Those are not my words; they are his. What steps is the Minister taking to reverse the trend of a growing proportion of London’s key workforce, be they in public services or other employment, being left behind and pushed out?

In an attempt to bring down the housing benefit bill, last week’s Budget effected a raid on housing associations and registered social landlords, whose properties look set to be sold off and whose revenues will be raided, stopping them from building more houses. The little social housing that we have will dwindle, and the policy is being funded by the sale of the so-called most expensive social housing properties in those boroughs. Were that to happen, it would lead to the total decimation of all housing stock in most of zone 1.

[Jeremy Corbyn (Islington North) (Lab)]

Is my hon. Friend aware that my borough of Islington has a good record of building new council houses to a high standard? We have just completed an excellent development on Caledonian Road of 25 first-rate flats. If the Government’s policy goes through, they will all be sold and not one person on the housing waiting list or in housing need will get them. They will just be sold on to the private market and rented out privately. Does she agree that that is a scandal?

[Dr Huq]

I thank my hon. Friend for his intervention. It sounds like good things are being done in Islington, but they are being stifled by central Government. If only everywhere could be like Islington. With his leadership bid, maybe we could roll out the Islington model more widely.

A residential research report from JLL states that a fifth of women and a third of men aged from 20 to 34 are still living in their parent’s homes in London. They have been termed “the boomerang generation”, and there is academic research showing that this is causing redefined roles between adults and identities and intergenerational conflict, because it creates a dependence model. Before becoming an MP, I was a lecturer at Kingston University, and a lot of people among the student body there were not even boomeranging away from the parental home to boomerang back to it. The combination of tuition fees and the economic slowdown means that they do not even leave to pursue their education in the first place, so we are starting to resemble France, where people tend to stay local for university. Lord Kerslake has stated that

“Londoners are missing out on opportunities: delaying having families, being forced to rent for longer and many are locked out of home ownership completely.”

Housing is not just about bricks and mortar; it is about resilient, ideally mixed communities, and its affordability is key to unlocking this city’s full potential.

I was asked earlier about developments in my constituency. On the eastern edge is Old Oak, the super-development zone that we are promised, with 24,000 dwellings coming on stream, but most of these properties will be out of reach for most of my constituents. Can the Minister say what is being done to change the definition of affordability from the current Mayor of London’s reckoning of it as a whopping 80% of market rate?

The word “crisis” tends to be one of the most overused in politics, but right here, right now in this city, it is justified. It is not hyperbole; it is reality. London’s population is set to expand to 10 million in the next 15 years. The suburbs were once seen as the solution to our social ills—combining the convenience of city working with the values of a rural idyll; positioned between concrete jungle and village green—but even these districts at the edge of our city are now suffering with out-of-control house prices, and they are spawning these unsafe beds in sheds. The saying was meant to be that an Englishman’s home is his castle, not his shed—leaving aside the implied sexism of that phrase.

Only a massive house building programme can solve the problem, and that is something that, I will admit, successive Governments have failed to undertake. The coalition Administration concentrated on developer-led, private homes, rather than social housing and mixed communities. The cuts to tax relief for landlords in the Budget sounded laudable, but what happened to the promised neo-garden city movement? I do not hear so much about that anymore.

We need to ensure that we do not lose people to Slough, Milton Keynes and Luton. We need to reverse the brain drain away to other global cities, which will see this city hollowed out by all the Old Oaks of this world and other developments in my constituency. Indeed, there is one by the railway tracks at Ealing Broadway—Dickens Yard—where new two-bedroom flats cost £1.2 million. Needless to say, the lights are always off, because absentee purchasers snap them up as investment vehicles rather than as a roof above their head. I imagine that the Minister will say, “It’s all devolved in London,” but will he agree to include in his next housing Bill a power to let councils ban overseas and off-plan sales, to ensure that first-time buyers in London at least have a chance?

[Mike Gapes (Ilford South) (Lab/Co-op)]

Is my hon. Friend aware that much of this overseas purchasing involves dodgy money from Russian oligarchs and elsewhere, and that house prices in our city are being pushed up by criminal money and criminal enterprise? Is it not time for the Government to clamp down on Russian oligarchs, or are they too dependent on funding from connected people?

[Dr Huq]

My hon. Friend makes an excellent point. Those dodgy people do need to be clamped down on. It would be a nightmare if London became just a playground for oligarchs, which is the way things are going.

The start of a new term in Parliament marks a natural punctuation point for new thinking. Will the Minister look towards alternative solutions such as co-operative housing? In 1997, Tony Blair stated that the main issue was “Education, education, education.” In 2015, it must surely be “Housing, housing, housing.” According to Ipsos MORI, 28% of Londoners rate housing as their main concern, compared with 13% nationally. This is a timely debate, and I look forward to hearing contributions from my fellow Members, as well as from the Minister.

--- Later in debate ---

[Mr Burrowes]

It does. I will talk about Enfield shortly, where some of the affordable housing that is being built is genuinely affordable. Meridian Water, which is alongside the constituency of the right hon. Member for Tottenham (Mr Lammy), will provide 5,000 new homes and is a huge opportunity to provide genuinely affordable housing as part of a mix. There needs to be a mix. We also need to focus on shared ownership to help people to get on to the ladder. We need to do more to encourage the First Steps programme, which my hon. Friend the Member for Wimbledon (Stephen Hammond) mentioned; as he said, that should double in scale. Shared ownership is important and should be a priority. We should call on housing associations to encourage shared ownership of their housing stock, rather than seeing it as an add-on or a subsidy for the rental market.

I did not hear the hon. Member for Ealing Central and Acton say anything positive about regeneration, even though there has been significant regeneration in her constituency. This week, a £55 million regeneration project was announced. On my patch in Enfield, Meridian Water is a huge opportunity to build 5,000 homes and create thousands of jobs; crucially it is linked to the transport infrastructure changes that are needed to transform the Lee Valley area. That is important.

The 20 housing zones are producing life-changing opportunities. We need more, and across London we should welcome them. London leaders do welcome them, but the Opposition seem not to.

[Dr Huq]

When new housing starts at £1.2 million, how does the hon. Gentleman square that with the fact that there are 13,000 people on the council waiting list in Ealing borough; there are only 700-plus properties whose leases turn over each year; and there are 250,000 people on the waiting lists in London? The stuff being built is not appropriate to those people.

[Mr Burrowes]

I agree, and the challenges in Enfield are similar to those in Ealing. I will not put my head in the sand and say all is rosy out there; I want to challenge the Government on some aspects. The plan for the redevelopment of the Ladderswood Way estate, which was put together by a Conservative administration and is now being carried forward under the Labour-run council in conjunction with the Mayor and the Government, will create 500 homes by 2018. Crucially, it needs transportation links, but opportunities are literally coming down the tracks—Crossrail 2 will be important for the New Southgate area. Opportunities are being harnessed, not least by the London land commission, to draw together everybody who is interested in public land and get them to work together in more co-ordinated way, which has not happened previously. All those things are important.

The London land commission was launched on Monday, so these are significant times. We need additional investment, and I look forward to continued support being announced in the autumn statement. City Hall, central Government and London boroughs are coming together to lock in surplus public land for housing, but we need cross-party support. Sir Steve Bullock, the Mayor of Lewisham said,

“It is vital that our overall strategy to tackle the housing crisis delivers an increase in affordable homes for ordinary Londoners.”

That is important, and we should all welcome it.

The hon. Member for Ealing Central and Acton asked about garden cities. In London, it is about garden suburbs. In Barkingside, the local development plan includes building 11,000 homes and five schools and providing 65,000 square metres for employers and community space. That is to be welcomed.

Right to buy will be coming through in the housing Bill. I support the principle of right to buy—people should have the opportunity to own their house—but the reality is that the majority of high-value council houses are in London, so the eyes of the rest of the country will be on whether the right-to-buy scheme is being subsidised through London housing. We need to the challenge the Minister on this. My constituents would not want the receipts from properties rightly bought by tenants of housing associations to go north of the M25.

--- Later in debate ---

[Brandon Lewis]

I will not give way at the moment.

A Help to Buy ISA will help those saving for a deposit to have a better chance of owning their own home. The Help to Buy schemes have already supported a total of 210,000 households since 2010 with the measures we have taken. We intend to go further. We will do more to help people reach that aspiration of owning their own home. We will work to deliver that for 1.3 million housing association tenants, supporting their desire to own their own home and making sure that at the same time we are boosting the housing supply in this country.[Official Report, 7 September 2015, Vol. 599, c. 1-2MC.]

Hon. Members mentioned private sector rates in England as a whole, which have been rising at less than inflation during recent years. We need to make sure that good standards are met, and we are taking steps to improve quality and choice in the sector. That is why we have established a fund to deliver a further 10,000 new homes. We will continue to improve the sector’s professionalism and to make it even more attractive to investors, to deliver more homes. We have taken action to tackle bad landlords so that they either improve or, preferably, leave the sector. That is why I support what the Mayor of London is doing with the London rental standard. We have published the “How to rent” guide and the “Renting a safe home” guide to help tenants better to understand their rights and responsibilities.

Opposition Members have talked about different forms of rent control and tried to argue that they are not rent control as any of us see it. If it looks like rent control and it smells like rent control, as the electorate made clear in the general election this year it is rent control—something that the Labour shadow Secretary of State has already said does not work and will not work. Experiences elsewhere have proven that, and we will not do it.

We are also facilitating new ways of regenerating inner-city estates, as we have seen at City Mills in Hackney. We are looking to kick-start more work to deliver more homes. We believe that we can deliver more homes on brownfield land without adopting the plan of the right hon. Member for Tottenham (Mr Lammy) to build across our treasured green belt. We expect to bring more than 134,000 more homes up to the decent homes standard, including around 55,000 homes in London alone. We will be investing a further £160 million to ensure that by April 2016, no more 10% of stock in each local authority does not meet that standard, and £145 million has been allocated to London.

We have, as hon. Members have pointed out, brought forward permitted development rights to get better use of existing buildings, particularly unused office space. There have been 25,700 permissions for home extensions and office-to-residential conversions to date.

[Dr Huq]

Will the Minister give way?

[Brandon Lewis]

Not at the moment.

That is 25,000 more homes for people in London who need them, and I am disappointed that Opposition Members seem to want to prevent Londoners from accessing those homes. That is part of a radical package of planning measures that the Chancellor announced at the Budget last week, including extending the Mayor’s powers to ensure that further work can be done strategically in London to deliver the housing that we all want.

Our new measures will help London to build up, in addition to other building, rather than building out and touching on the green belt that Opposition Members seem so keen to deliver on. We want to deliver more homes for Londoners while protecting that important countryside, which is what residents want. Alongside our planning measures, we will invest £1.3 billion up to 2020 to unlock and accelerate development on large housing sites that are struggling to move forward. We have released enough public sector land to deliver more than 100,000 homes, and we will deliver another 150,000 during this Parliament. Our Get Britain Building investment fund of £500 million will support almost another 10,000 homes.

We are working with the Greater London Authority to support regeneration in Brent Cross to deliver another 7,500 homes, and we are providing £7 million of revenue funding to the GLA over this Parliament to support the delivery of the Croydon growth zone, which will enable the creation of another 4,000 homes and 10,000 jobs. We are engaging locally led development in the form of garden cities. There are several already across the country, including Ebbsfleet, near London.

I look forward to the hon. Member for Ealing Central and Acton encouraging areas such as hers to deliver more, and we will work with them to do that. We are determined to make the best use of brownfield land to unlock and accelerate housing schemes and deliver homes across our country. The GLA alone aims to deliver 50,000 over the next few years, and we will support the Mayor to do that.

The housing market in our capital is expanding and improving. One thing that we all agree on is the fact that London needs new homes. We do not dispute that. That is why we are committed to improving the housing market in London by working with the Mayor to respond to the capital’s particular housing challenges and helping ordinary Londoners to achieve their aspiration of home ownership. When the Opposition talk about the policies that failed them up to the general election, I gently suggest to them that they should think again.

[Dr Huq]

The Minister did not answer any of the series of specific questions that I asked him, although he gave us a good catalogue of things from whatever he was reading out—it seemed to be some sort of Mayor’s brief. He was asked: does he think that the definition of affordable housing as 80% of market rate is correct, and does he think that there is scope for changing it, because it is simply not affordable for my constituents? It was put to him that the average age of a first-time buyer, unaided, in London is 37—is that right, and what does he predict it will be by the time this Administration leave office? I also put it to him that he could look at alternative models of housing. Would he investigate, for example, co-operative housing solutions? I also asked about key workers, the people who keep this city going: the police, teachers, public servants—

[Mr Christopher Chope (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).