Affordable Housing: Planning Reform

Debate between Rupa Huq and Derek Thomas

Tuesday 7th December 2021 Westminster Hall

[Dr Rupa Huq (in the Chair)]

Before we begin, I remind Members that they are expected to wear a face covering when not speaking in the debate, in line with current Government guidance and that of the House of Commons Commission. I also remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming onto the Estate; those can be obtained from Portcullis House or taken at home, as preferred. Please also use your judgment—everyone here is very intelligent—and give each other and members of staff space when seated and when entering and leaving the Chamber.

[Derek Thomas (St Ives) (Con)]

I beg to move,

That this House has considered access to affordable housing and planning reform.

It is a pleasure to serve under your chairmanship, Dr Huq, and I am delighted to have the opportunity to take the lead in today’s debate. I would like to declare a registered financial interest in that I have a part-share in a property used for long-term rent. I am glad to have secured this debate, as the severity of the housing situation in Cornwall and the Isles of Scilly, which I represent, requires urgent intervention. It is not a new situation; I recall having a meeting with the current Health Secretary when he was the Housing Secretary, some years ago now, asking him to intervene in the housing situation on Scilly by allowing the council to have powers to address the rate of second home ownership on the islands.

Likewise, in relation to housing in Cornwall, my Cornish colleagues and I have regularly raised the difficulty faced by residents to acquire affordable housing since we were elected. More recently, we have raised this directly with the Prime Minister in meeting of Cornish MPs. I secured a debate in 2018 asking the Government to address the difficulties that second home ownership and the holiday let industry place on families who need affordable homes so that they can both work and raise their families locally.

Various measures have been introduced, predominantly in support of first-time buyers, which is welcome, as having a home of one’s own brings security and a commitment to the local community that is rarely matched by any other intervention. However, recent developments in relation to the pandemic and a clumsy approach to housing by some council officers, until recently, have starved ordinary working families of appropriate and affordable secure housing. Therefore, while access to affordable housing for working families is not a new difficulty, it has become a whole lot more difficult over the past two years.

In the first quarter of 2021, searches for homes to buy in Cornwall topped 15 million, and 1.1 million people searched for homes to rent. Our total population is just half a million, and many of them are finding that the house that they rent and believed was secure is being taken back by the landlord to capitalise on the boom in Cornwall as a holiday destination. I feel slightly guilty because I have promoted Cornwall and the Isles of Scilly as holiday destinations for many years; I might need to tone that down a bit, because although it has had the desired effect, it has also put enormous pressure on our housing supply.

--- Later in debate ---

[Derek Thomas]

It is a great subject, because it actually happens to be in St Ives, which is part of my constituency, so I know a little bit about that. My hon. Friend is absolutely right. A neighbourhood plan introduced the policy of primary residence only, so all new housing has to be for primary residence. They did it—this is years ago now, so it is not a new problem—because purchased properties were often pulled down and others built in their place, which devastated the local community. We have seen villages such as Mousehole, Porthleven, Coverack and others where, in winter, the lights are pretty much switched off.

St Ives has done it and we have not seen a particular impact. In the summer I went to see quite a large site developed by bunnyhomes, where every single home for primary residence was sold without a problem. It definitely can be done and it would make it easier if it applied across the whole authority, rather than in one particular town area. I thank my hon. Friend for his intervention.

The Government should re-emphasise to councils our commitment to home ownership and make it more difficult for councils, such as Cornwall council, to restrict other housing delivery models, such as rent to buy. I fully understand the pressure on houses to urgently respond to the situation today, but I cannot stress enough how positive it is for a family to own a home and put roots down in that community, support the local school and feel that they have a stake in how that community goes forward. Home ownership is a significant part of the mix and must be protected.

The Government should consider an incentive to landlords to sell to their tenants by enabling capital gains tax to be used to give the tenant help with the deposit and purchase price. We remember that a previous Chancellor introduced rules that made the financial incentives for being a long-let landlord much more difficult. Many landlords in my constituency are looking to sell their properties to their tenants, but that is surprisingly difficult to do. One idea came to me from a landlord who is keen to do this. His alternative is to switch it—avoid the tax implications and switch the property to a holiday let, which he does not want to do. We are seeing other landlords do that, but he wants to have the opportunity to sell his property to the tenant, but the tenant needs help to get the deposit together. There may be a way to use capital gains to support that transfer. Otherwise, we will continue to see long lets lost to holiday lets or sold to the highest bidder. These homes are often snapped up by those who can afford a second home to retreat to in coastal areas and other attractive parts of the British Isles. That issue must be addressed.

The Government should consider introducing a licence scheme, so that properties currently lived in require a specific licence before they can become a holiday let or bolthole. This policy idea favours permanent residents. In the past couple of years, because of the need for staycation and inability and sometimes reluctance to fly abroad for holidays, we have seen people flooding into tourist attraction areas and driving up a holiday let market that has seen large numbers of families evicted from their homes, which they have sometimes rented for many years, and these homes transferred a holiday lets. We would therefore like the Government to intervene and require a licence to be given to allow that house to move from a permanent residence to a holiday let or some other use. That is novel, I know, but we are in such a time where families cannot hold down the jobs or get the jobs we need them to have because of the lack of housing.

Councils should consider applying council tax to all homes, irrespective of their use. At the moment, the police, the parish and town councils do not get their share of the council tax if that property is switched to a holiday let or business, as we discussed a few moments ago. Such a policy of council tax across all properties built for living in would also save the UK taxpayer, who at the moment pays the Treasury to refund councils which lose that council tax income. That is a fair idea that recognises and values houses built to be lived in.

The Government have encouraged the possibility of creating new locally led development corporations to encourage local areas to come forward with ideas for new towns to deliver jobs, homes and economic growth. There is an appetite in Cornwall to identify village garden sites. This seems entirely sensible, but the challenge facing this innovation is the immediate escalation of land value when an area is identified for development. That absorbs the very money that would otherwise be used to create the infrastructure to serve a new community.

The increase in land value, which the locally led corporation then has to find, undermines the viability of the scheme and the ability to deliver the infrastructure needed. The Secretary of State and the Minister here, my right hon. Friend the Member for Tamworth (Christopher Pincher), should consider allowing these locally led development corporations to be established much earlier in the process, to secure the sites before the value rockets. This policy idea enables the development of these garden villages, which reduces the incredible pressure placed on existing towns and villages to meet the entire housing demand.

I would like to quickly move on to the thorny issue of enforcement, because as we consider planning reform, enforcement should not be ignored. Currently, we have something of a gold rush in Cornwall, with people and businesses buying any land they can get hold of. Small farms are being sold because they are no longer commercially viable and are often snapped up by individuals who have no intention of farming but would quite like a piece of Cornwall’s real estate. They get hold of this land and carry out all sorts of development and destruction, knowing that the council’s enforcement team is overwhelmed, under-resourced and seemingly lacks power, or at least fears legal challenges at every turn. It is a huge problem across Cornwall, and I am sure it is a problem elsewhere in the country.

It is a complex issue, but I would like to take this opportunity to suggest a simple adjustment. The Government could, and should, introduce a fixed penalty system where councils can apply a significant and proportionate fine to both the owner and contractor. An owner or developer may feel that a breach of planning and possible enforcement is worth the risk, as the financial gain may outweigh any enforcement action. However, such people rely heavily on contractors who will be less inclined to breach planning law if the penalty applied to them. As a former tradesman, I know that I would check to ensure the task I am charged with has the necessary planning consent if there were a potential fine and a blot on my copybook. A fines system would fund enforcement and ensure councils have the capacity to do a good job.

When it comes to housing, this is the time to be bold. It is time to apply some clear, blue-sky thinking and demonstrate that the Government are on the side of those who, in the past, we have described as “just about managing.” Right now, in Cornwall and on Scilly, these families are not managing.

[Dr Rupa Huq (in the Chair)]

I aim to take the Front-Bench spokespeople from 3.38 pm, so please could the Back-Bench speakers stick to six minutes? We kept changing it, as we did not know how long the hon. Member for St Ives (Derek Thomas) was going to speak for, but if everyone sticks to six minutes, then everyone will get in.