Low-Cost housing

Ruth Cadbury Excerpts

Wednesday 8th February 2017 Westminster Hall

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

It is an honour to serve under you again, Ms Gillan. I thank the hon. Member for Weston-super-Mare (John Penrose) for securing the debate.

I wondered whether there had been a mix-up by the Chairman of Ways and Means, who decides on these debates, but knowing him and understanding the process as I now do, I know that that is not possible. Hon. Members may have attended this debate and people may have watched it in anticipation of a debate on low-cost housing, perhaps hoping to hear some more detail about the White Paper that the Government released yesterday or some more meat put on the bones of the essential topic of low-cost housing. Instead, this debate has been about a small proposal to tweak the planning system.

I will address the proposal from the hon. Member for Weston-super-Mare in a moment, but first I will address low-cost housing, which is the topic of the debate and is what I expected to be speaking on. Of course the overall supply of housing—which the hon. Gentleman states it is the intention of his policy to address—is important, because we have a shortage of housing in this country, as the Secretary of State said yesterday. In a pure supply and demand curve, one expects more supply to mean lower cost, and the obverse—shortage of supply—means higher cost, which is exactly what has happened in the open market; so housing becomes more and more unaffordable for more and more people.

That has happened in the last seven years. Under David Cameron, the UK built fewer homes than under any peacetime Prime Minister since 1923. The number of home-owning households rose by a million under the 1997 to 2010 Government, but it has fallen by 200,000 since 2010, and this shortage has meant that the price of buying has risen and risen, putting homes out of the reach of even well-paid young people. Members here today may have watched “Newsnight” last night, in which there were reasonably well-paid young professionals who could not get on the housing ladder. In my constituency in west London, working people earning reasonable salaries cannot even afford to rent, and if they can just about pay more than 50% of their income on rent, they have no money left to save up for a deposit. The market is not delivering affordable homes to rent or to buy, except in some economically deprived areas, where there are more homes than there are people who want to live in them.

In most of England, because house prices have risen, more and more people need some kind of subsidised low-cost housing. Since 2010, however, Government funding for all types of affordable housing—there were eight definitions of affordable housing in the White Paper—has been withdrawn, except for one, which is for first-time buyers. The level of new affordable house building has still managed to hit a 24-year low. The number of shared ownership homes and other low-cost home ownership homes being built annually has fallen by 66% since 2010, to just 7,540 homes a year, meaning that 34,170 fewer affordable homes have been built since 2010 than in the last six years of the last Labour Government. The hon. Member for Kilmarnock and Loudoun (Alan Brown) clearly described the problems—and the potential solutions—of delivering truly affordable low-cost housing.

For social rented housing, official statistics show that the number of social rented homes that were started in 2009-10 was almost 40,000, but in 2015-16 the number of social rented homes being delivered was less than 1,000—a fall of 98% and the lowest figure since records began.

My right hon. Friend the Member for Wentworth and Dearne (John Healey) said yesterday in the main Chamber that private house builders, housing associations and councils need to fire on all cylinders to build the homes that we need, and councils need to be allowed to build homes again to meet the needs of local people. At the moment, they are not allowed to do that.

[Dr Huq]

I am grateful to my hon. Friend and constituency neighbour for giving way. I agree with what she is saying, that this “Pile ’em high, sell ’em cheap and leave it to market forces” solution does not sound like it is enough. When it is left to market forces, in a place such as Ealing, people seem to use these high-rise homes that are going up as a very expensive piggybank; they are not even living in them. Obviously we need more social housing to counteract all this.

[Ruth Cadbury]

My hon. Friend and constituency neighbour is absolutely right. I have experienced that in my own constituency. We still have newly built homes that are never let, because they are seen as nothing more than an investment, and many of them are very high in price.

As I have said, the latest affordable housing statistics have fallen to their lowest levels in 24 years. Of course I welcome any credible initiatives to provide low-cost housing, but where is the evidence that this well-meaning initiative to extend permitted development rights, which the hon. Member for Weston-super-Mare has discussed today, will actually deliver low-cost housing?

Between February and April in 2016, the Government consulted jointly with the Mayor of London on proposals to deliver more homes in London by allowing a limited number of additional storeys on existing buildings through a permitted development right, local development orders or development plan policies, which is exactly what the hon. Gentleman is seeking. That was part of the Government’s commitment to explore how more homes could be built on brownfield land, in order to reduce the pressure on greenfield or metropolitan open land. The Government summary of the responses that they received to that proposal says:

“More than half of those were not supportive of the proposal, with a one-size-fits-all permitted development right approach considered unworkable. While it was noted that it could support town centres and deliver more homes, it was recognised that the complex prior approval that would be required to protect neighbours and the character and amenity of an area would result in a permitted development right that is no less onerous than a planning application.”

Specifically, a couple of the consultees—the Planning Officers Society and Historic England—did not support the proposals. I am well aware that the British Property Federation welcomed them.

[John Penrose]

I just wish to clarify something for the hon. Lady. I have read the document she is quoting and learned of the concerns surrounding the proposed permitted development right, which has been consulted on already, but my proposal is different. It starts from the same place, but is designed to avoid the criticisms that were levelled, which she has rightly pointed out. I have endeavoured to modify my proposal in a way that will allow it to sidestep those issues.

--- Later in debate ---

[Ruth Cadbury]

I thank the hon. Gentleman for that clarification. Nevertheless, with any consideration of extending permitted development rights, there are always unintended consequences. That is why the Planning Officers Society, Historic England and other organisations did not see the merit of, and therefore did not make the case for, extending them. In fact, it was not only permitted development rights that were considered, but other methods.

As I say, the British Property Federation welcomed the proposal for an extension to permitted development rights, but even the BPF said that

“it is unlikely to deliver a significant amount of new homes”,

which, as the hon. Gentleman said in his speech, is one of his key aims.

What are the reasons to retain the status quo, which is what I am suggesting? Proposals to develop upwards can go through the planning application process. What is wrong with that? A planning application provides notification, consultation, transparency and accountability, whereas extending permitted development rights does not. If any proposal to build higher makes sense in a town or village centre; if it works with neighbouring buildings; if the space standards and design provide good quality housing in which people will thrive, it should be granted planning permission. However, to deny a community or a parish council the ability to comment, to deny planning officers the ability to negotiate improvements to a proposal, and to deny locally elected councillors the opportunity to determine the application would just open the gates to unpopular, unwanted and possibly bad developments.

If a local council makes a bad planning decision—possibly in the face of fierce local opposition to an application—there is always the opportunity to appeal to the impartial Planning Inspectorate. Nobody denies that enabling more homes to be built in a town or village centre is a good thing for the life and vibrancy of that place.

[Dr Poulter]

I certainly agree with the hon. Lady’s sentiment. However, is it not very difficult for the types of people my hon. Friend the Member for Weston-super-Mare (John Penrose) has spoken about today—people who want to carry out small extensions or build small buildings—to bring the sorts of planning appeals that she just talked about? Sometimes bad decisions are made because around the time of elections, planning issues can become very contentious in local authorities.

[Ruth Cadbury]

Having been a councillor myself for many, many years, I am well aware of that pressure, which is why we have the appeals system—it is why we have that check and balance. Let us remember that one can only get away with refusing a planning application if the refusal is made on good planning grounds. Officers are there to advise councillors, and if councillors ignore officers, the application will go to appeal, and, if it is a good application that was refused for the wrong reasons, the Planning Inspectorate will overturn the refusal and the application will be granted.

The planning system is there for a reason. It is there to protect communities and ensure good development. It ensures that there are appropriate facilities, amenities, space standards, parking provision and so on. When permitted development rights are extended, a lot of that is lost. I am sure that the hon. Member for Weston-super-Mare does not want to see a load of high-rise buildings going up that do not meet basic standards and do not provide a basic quality of life for the people living in those dwellings and in surrounding dwellings.

[John Penrose]

I repeat that I am not proposing huge high-rise dwellings at all; I am proposing things that can be built up to the height of the local treeline, for example, which is four or five storeys at the most. I gently say to the hon. Lady that if the planning system works so bleedin’ brilliantly, we would have four or five-storey developments in market towns and seaside towns around the country, but we do not. I doubt very strongly that that is because communities everywhere have roundly decided that they cannot live with anything taller than two storeys. I suspect that it is because there is a chilling effect. People are being discouraged from putting such applications in because of officialdom knocking them back all the time.

[Ruth Cadbury]

With the greatest respect to the hon. Gentleman, I believe he was in the same meeting as me last week, where we talked about converting empty space above flats into residential. In that interesting and informative roundtable, we heard that there is a whole host of barriers to converting empty space above shops, and the same applies to the proposal to increase heights. The planning system was not suggested as the main barrier. There are other barriers, such as structural ones, security ones, issues of funding and whether it is worth the cost. Except in very high-price property areas, such as those that my hon. Friend the Member for Ealing Central and Acton (Dr Huq) and I represent, it is just not worth landowners’ while to do it. There is a range of barriers.

No one denies that enabling more homes in town centres is a good thing for the life and vibrancy of those town centres. I wholeheartedly agree with that sentiment, but the hon. Member for Weston-super-Mare could do better than blaming the planning system for the lack of delivery. The planning system can deliver what he wants now. He has brought no evidence that this little tweak of the planning system will deliver more housing, let alone more affordable housing. He has made circumstantial links between more supply, of which the proposal would provide a tiny amount, and a crashing fall in housing prices. There is no evidence.

We have seen problems when permitted development rights are extended, such as with the coalition Government’s policy, which has now been enshrined permanently, of allowing employment space to be converted into residential without planning permission. In Hounslow—I represent half of the borough—we have seen poor-quality housing, poor space standards, inadequate parking and issues with everything from refuse disposal to access. That policy is not providing good-quality housing or affordable housing.

The other extension of permitted development rights that was enacted under the coalition Government allowed homeowners to extend the rear of their homes by 6 metres, rather than the 3 metres it had been previously. Those developments have a massive impact on the neighbours. That is why we have to be careful about extending permitted development rights, and the Opposition do not support such extensions.

Building can be done at height with good design, but there is no reason why that cannot be done through the normal, transparent and accountable planning application process. In the years I was a planning committee member—some of those were as chair—we granted many applications for increasing the height of buildings and homes or for building new higher ones. We refused some terrible applications. The system allows for that to happen. We have a massive housing shortage in west London, but the prices are high enough that it is worth the developers’ while. We saw the applications; we approved the good ones and refused the bad ones. The market in west London is doing exactly what the hon. Gentleman desires.

[John Penrose]

I thank the hon. Lady for giving way yet again. She is being very generous and kind. I gently say to her that the London economic microclimate is not typical of the rest of Britain. I am rather reassured by some of the things she has said about what is happening in parts of London and how these things are being handled, but I do not think those incentives, processes or habits of mind among councils and council officials are broadly spread across the country.

[Ruth Cadbury]

In which case, the hon. Gentleman is effectively admitting that it is not the planning system that is the problem, but the state of the property market and other barriers to development. The market in west London is doing exactly what he wants, and I suggest he looks elsewhere for the cause of the problem and, therefore, for the solution.

The hon. Gentleman wants beautiful buildings; that is why a planning system is needed. He is proposing a solution that removes local oversight, but there is no evidence it will work and it could create unintended consequences. Furthermore, his proposal does not address the subject of the debate: low-cost housing. I am almost inclined to dissent when the Question is put at the end of the debate as to whether we have considered low-cost housing, but I will leave that for then.

--- Later in debate ---

[Jackie Doyle-Price]

The hon. Gentleman will not be surprised to hear that I disagree with his point about right to buy. We are firmly committed to it. We want to encourage the aspiration for everyone to own their own home. We want to enable that, and right to buy is very much a part of it. He made very thoughtful remarks in his earlier contribution, and we have answers. We are firmly committed to making sure that, for every additional home sold, another social home will be provided—nationally. There is a rolling three-year deadline for councils to deliver the affordable homes to replace right to buy. We must also remember that when someone exercises their right to buy, the house is not removed from the stock. They still have a housing need. Again, the issue comes back to making sure that we increase the supply of houses.

Perhaps I can give the hon. Gentleman a little more comfort. It was said by the hon. Member for Brentford and Isleworth that councils were not building more homes. Actually, they are. Some councils are showing considerable imagination in unlocking new homes. They are establishing local housing companies and we are encouraging them to do that. We see local councils as part of the partnership to help to increase supply.

[Ruth Cadbury]

I am sorry if the hon. Lady feels that I said councils are not building new homes. They are building new homes, but they are having to use other resources now that there is no Government funding. They could build an awful lot more if they could be released from the borrowing cap. My own council is building about 400 new council homes. The problem is that councils are losing their own stock at a faster rate through the right to buy than they can build new council homes. They are building them using capital funds that could also be used for other infrastructure such as schools and so on.

[Jackie Doyle-Price]

I am not sure I entirely accept that. Certainly local authorities have the powers to borrow using their general power of competence, and they have established local housing companies to do that. There is an obligation to replace one for one, following the right to buy being exercised. Ultimately, we see local authorities as a partner in delivering more housing. That is the message I want to press home today.

Our broken housing market is one of the greatest barriers to progress in Britain today. If we are really serious about building a fairer society for everyone, we need to tackle that. We need to fix this to make sure that housing is more affordable. As has been mentioned, many people spend significant amounts of their income on rent or mortgage payments. Building more homes will slow the rise in housing costs so that many more families will be able to afford to buy a home or enjoy the benefits of lower rents.

To summarise and put what the housing White Paper proposes in context, first, we will insist that every area has an up-to-date plan, because development is about far more than just building homes. This is where the challenge is for local authorities. The planning process and building a vision of where new homes will be built and what the future will be for a local economy is so important. It is about getting community buy-in. It will help to tackle some of the cultural prejudices that we discussed earlier in the debate. If communities have ownership of a local plan for their local area, they will get the attractive homes that they want and need. My challenge is for local authorities to step up and deliver. We are all aware that there are far too many local authorities that have not risen to the challenge of identifying where houses are needed. There are still too many councils that do not have a local plan, and they need to show leadership and deliver.

Secondly, and as the hon. Member for Ealing Central and Acton (Dr Huq) noted, we need to ensure that homes are built quickly once planning permission is granted. We will make sure that the planning system is much more open and accessible. We will improve the co-ordination of public investment infrastructure to encourage that, and we will support timely connections to utilities to tackle unnecessary delays, but the real issue is developers. We will give councils and developers the tools they need to build more swiftly and we will expect them to use them. I suspect that this is an issue that we will look at as reactions to the White Paper unfold and we consider whether there is a need for further legislative change.

We will also diversify the market. We want to bring new players in to the supply of housing. We need to give support to small and medium-sized builders and custom builders and to champion modern methods of construction to support new investment to build to rent. Those measures could be transformational. The idea of institutional investment that builds property estates or residential blocks that are specifically for rent, which people can rent for a long time, could transform the housing market and make renting much more affordable.

The White Paper also sets out how we will support housing associations to build more and explores options to encourage local authorities to build again. As I have said, we will also encourage further institutional investment in the private rented sector. Finally, because we recognise that building the homes we need takes time, we will also take more steps now to improve safeguards in the private rented sector. Hon. Members who represent constituencies in London will be particularly concerned about that.

We have seen the need to do more to prevent homelessness. I am very pleased that the Government have committed to fully funding the Homelessness Reduction Bill introduced by my hon. Friend the Member for Harrow East (Bob Blackman). We will provide £61 million to local government to meet the costs of the new burdens associated with that Bill over the course of the spending review period.

We could easily trade statistics, but I do not think there is any value in playing the blame game about where we are now. We need to look at how we fix it. Everybody has a role to play in that—including the former Leader of the Opposition, the right hon. Member for Doncaster North (Edward Miliband), who the hon. Member for Ealing Central and Acton mentioned. The Government are very clear that fixing the problem is a real priority.

We have already delivered 313,000 affordable homes in England since 2010. The affordable homes programme alone delivered 193,000 affordable homes, exceeding expectations by 23,000. At the autumn statement, the Chancellor announced the expansion of the affordable homes programme with an additional £1.4 billion, which increased the overall budget to £7.1 billion. That is a significant investment from the Government in tackling the problem. The expanded programme also allows a wider range of products to help people on the pathway to home ownership and to continue to provide support for those who need it. Those products include shared ownership, rent to buy and affordable rent.

Opening up the programme in that way will help to meet the housing needs of a wider range of people in different circumstances and at different stages in their lives. We have to recognise that there are different problems in different areas of the country, but also different problems hitting people at different stages of their lives. We need to make sure that we have a solution for all of those.

Affordable rent was a policy introduced to get more bang for our buck in providing social rent models. It allows rent to be set at 80% of market rents so that we can unlock more supply. Those tenants will still benefit from a sub-market rent. This is a particular issue in London, where the affordable rent can be set even lower.

Home ownership, however, continues to be the aspiration for most people, which is why we have looked at the Help to Buy products, right to buy and shared ownership. Shared ownership offers a route through the part-buy/part-rent model to enable people to get on the housing ladder sooner than if they were saving for a deposit. Purchasers buy a minimum 20% share in the new-build property at market value, pay a controlled rent on the remainder and may continue to buy further shares until the property is owned outright. We will continue to use that tool to expand home ownership. Since 2010, around 45,000 new shared ownership schemes have been delivered and we will continue to deliver more.

Help to Buy has already helped more than 200,000 households to buy a home, including through the equity loan scheme, which has benefited 100,000 households—81% of whom were first-time buyers. We have also committed £8.6 billion for the Help to Buy equity loan scheme to 2021, to ensure that it continues to support homebuyers and stimulate supply. We recognise the need to create certainty for prospective homeowners so we will work with the sector to deliver that.

I come back to the issue of the planning regime and how we can speed up its ability to help to deliver the volume of supply. My hon. Friend the Member for Weston-super-Mare is quite right to look at tools for how we can do that. He highlighted the importance of increasing brownfield development and building to higher densities to deliver more homes. If widely adopted, that could reduce the need for green-belt development. What excites me about the idea is the ability to regenerate our high streets. I am sure I am not alone, given the way that retail is moving today, in seeing some of my high streets really struggling. The idea that we could create a new, mixed-use high street, rather than a retail-dependent one—one where people can live above the shops or behind the shops in new high-rise developments and be able to go downstairs and visit cafes and restaurants—is quite an exciting concept, which would particularly appeal to the younger generations coming through. There is massive potential, and I encourage my hon. Friend to carry on trying to open people’s eyes to the potential of this initiative.

The Department has been engaging with my hon. Friend on his work and has taken up his proposals. We consulted last February on proposals to allow limited upward extensions in London, no higher than the height of an adjoining roofline. Following that consultation, we recognise that there is potential to deliver more homes nationally, not just in London, through a change to national planning policy to support upward extensions in suitable locations. As set out in the housing White Paper, we propose to amend the national planning policy framework to make it clear that local plans and individual development proposals should address the particular scope for higher-density housing in urban locations where buildings can be extended upwards by using the airspace above them.

In the White Paper, we have committed to reviewing the nationally described space standards, because of feedback from the sector that in certain places, space standards make it hard to use land efficiently and stop cheaper houses being built, which more people now want to rent or buy, such as Pocket Homes. We have to recognise the limitations. When we write planning law, we write it at a given time, in a given set of circumstances. When the world changes, we need to be prepared to be fleet of foot in dealing with new opportunities to address the issues we face. However, this is not a race to the bottom, and Government are clear that in assessing the options we will be looking for a solution that combines greater local housing choice with good quality and with decent places to live.

As I have set out, in the past few years we have seen over 300,000 affordable homes built in England. We now need to go much, much further and meet our obligation to build many more houses, of the type people want to live in, in the places they want to live and at a price they can afford. Doing that will give those growing up in society today more chance to enjoy the same opportunities as their parents and grandparents. I am struck by the fact that this is the first time that the future generation will be less well-off than their parents, when for many decades we have been used to high living standards. It is firmly my view that the price of housing is central to that.

We will ensure that the housing market is as fair for those who do not own their own home as it is for those who do, and we will continue to look at what is happening in the private rented sector. All that is a vital part of our plan for a stronger, fairer Britain, and a critical step along the road to fulfilling the Government’s mission to make Britain a country that works for everyone.

[John Penrose]

I would like to extend my thanks to everybody who participated in this debate, in particular my hon. Friend the Minister—and Whip—for responding so constructively and helpfully. As she said, the timing of this debate was slightly fortuitous. As everyone here will appreciate, when we put in for debates we have little control over precisely when our names will come up, so I had no idea that it would take place 24 hours after the publication of the housing White Paper.

As the Minister said, I have been campaigning on this issue for some time, so this is at least partially a celebration of victory, because I am pleased to say that the Government have listened. There is a great deal in the White Paper about building up, not out, and it contains some very welcome steps. The Government deserve full credit for taking some major steps in the right direction. Therefore, my modest proposal, as the hon. Member for Brentford and Isleworth (Ruth Cadbury) called it, is a final flourish or a final capstone—a residual step to ensure that it is done well and fully, rather than only partially. I think I am very close to the summit of achieving what we need to do, and I want to take this final step. This is, at least in part, a celebration of victory as much as a request for further activity.

I want to pick up on the Minister’s comments about there being a slightly miserable tone to the debate. She is absolutely right that there is no silver bullet to this problem, but it is perhaps a little reductive to say that because one particular proposal—in this case, my final step—does not solve all the complicated, deep-rooted and long-lasting housing problems that this country faces, it should therefore be opposed. If we let the best be the enemy of the good, we will get nowhere. This is a far broader issue than we can possibly cover in one debate, but I am pleased to say that we will make some progress.

I will finish on this point, which I direct to the Labour party and the hon. Member for Brentford and Isleworth in particular. My hon. Friend the Minister said there was a cultural divide over tall buildings, but I think that in this Chamber there has been a cultural divide over the approach to regulation, too. I accept that the planning permission and planning regulation process plays an important role in preventing substandard building and inappropriate large-scale building—the hon. Member for Brentford and Isleworth was right to point all those things out. However, when it comes to regulating our fellow citizens in a free society, the burden of proof is on us to show why what we are doing to take away their freedoms is right, not on them to explain why they should have them back. Therefore, if I have a modest suggestion for an extension of those freedoms—a rolling back that will not impact on the broader points that the planning system is rightly geared to prevent abuses of—then it is up to us to justify why that should not happen. The burden of proof should be on us.

[Ruth Cadbury]

rose—

[Mrs Cheryl Gillan (in the Chair)]

Can I check that the hon. Gentleman is not giving way?