Affordable Housing (Devon and Cornwall)

Selaine Saxby Excerpts

Wednesday 27th April 2022 Westminster Hall

[Selaine Saxby (North Devon) (Con)]

I beg to move,

That this House has considered the availability of affordable housing in Devon and Cornwall.

It is a pleasure to serve under your chairmanship, Mr Hosie. I hate the word “crisis”, but there is no doubt in my mind that we have a housing crisis across Devon and Cornwall, which is particularly acute in my constituency of North Devon. It means that there is virtually no housing available for local people, affordable or otherwise. This weekend, the Chamber engagement team secured over 200 responses, the strength of feeling is so high. It is my constituents’ experience of this issue that drove me to apply for today’s debate.

Carol, one of my constituents, says:

“For me personally I am a single woman two years off retirement, I will not be able to retire completely because private rents are too high for one person on a pension. I am at risk of being homeless because of this. I’m not eligible for help if I lose my house because I cannot afford to live here anymore.”

Rachel says:

“We’ve been given notice to move out after 10 years so our landlord can use the house for family holidays. But we cannot find another family home in Braunton—there’s simply nothing available, likely due to the increased number of holiday lets.”

Kathryn says:

“We were saving to buy a house 3 years ago, unfortunately having reached our savings target 18 months ago, we have been unable to buy due to the huge increase in house prices in North Devon during the last 2 years. We now require more than double our original savings target for a deposit so are stuck renting until something changes.”

Stephanie says:

“Despite working, two of our children who live in Devon with children of their own are now suffering poverty due to high and increasing rent and no possible chance of either social housing or owning a home. They are likely to need deposits of approximately £150,000 as their wages would only cover a mortgage to approximately £90,000. It’s no good claiming there are schemes where only 5% deposit is needed when house prices far exceed earnings.”

So what exactly is going on? Figures from the Land Registry show that house prices in North Devon have risen by 22.5% against a UK average of 8%, the second highest increase in England, with neighbouring Torridge coming in fifth at 19.9%. At the same time, we have seen a complete collapse of the private rental sector as landlords take advantage of the surge in domestic tourism during the pandemic. Currently, Barnstaple, with a population of over 35,000, has just three private rentals available on Rightmove and 234 holiday lets on Airbnb.

[Sir Geoffrey Cox (Torridge and West Devon) (Con)]

Does my hon. Friend agree that the situation at the moment allows landlords to buy up good residences in towns such as Barnstaple and Bideford, register themselves as businesses, apply for small business interest rate relief, pay nothing to the community, either in council tax or business rates, and provide very little by way of employment, and that that racket has to be stopped?

[Selaine Saxby]

As always, my right hon. and learned Friend and neighbour makes an excellent point. There is so much that needs to be done in Devon and Cornwall.

Building on the point I was making about the availability of property, today Ilfracombe has just one private rental and over 300 holiday lets. Apparently there has been a 67% reduction in rented housing between 2019 and August 2021, making North Devon the worst affected area in the south-west and the fourth worst nationally. Despite an improvement in the management of the list, the council reports a 32% increase in applications, with local affordable housing providers advising that there has been an increase of four to five times in the number of applicants for each new affordable rental property. From the data available, our district council reports that we have lost 467 houses from the permanent occupied market to second homes and short-term holiday lets, at a time when the rate of new developments has dropped right off due to the pandemic.

[Simon Jupp (East Devon) (Con)]

Does my hon. Friend agree that the Government need to consider a bold policy intervention to tackle the impact of second home ownership? One such policy could be to allow councils to reserve a percentage of new builds for people with a local family or economic connection to an area.

[Selaine Saxby]

I agree with my hon. Friend. In my constituency many of these homes are reserved for local people, and I will explain some of the further issues later in my speech. I know that the Secretary of State has conceded that we have not built enough affordable homes, and he is right.

[Neil Parish (Tiverton and Honiton) (Con)]

I thank my hon. Friend for securing the debate. In Cullompton in Mid Devon, we are putting up Zed Pods, which are very good modular homes that are zero carbon and equipped with triple glazing. They are also going on to garage sites and the like, and can be put up quite quickly. If we want to push to get more housing done, that is one way in which we could produce affordable, good-quality housing that is good for the environment and help reduce waiting list numbers.

[Selaine Saxby]

That highlights another important point, which is that a large number of small district councils in Devon are all tackling the same issue and coming up with different solutions. In fairness, building rates in North Devon have been good historically. However, we are currently averaging only 18% affordables on each development. As the Affordable Housing Commission concluded in 2020, many of these products are

“clearly unaffordable to those on mid to lower incomes.”

With some of the lowest productivity figures in the country and an abundance of part-time and seasonal work, we clearly have a lot of residents in that category.

[Anthony Mangnall (Totnes) (Con)]

My hon. Friend makes a good point about affordability. Does she agree that it is important to ensure that our county council statistics on average earnings are reflective of what in-county people earn? All across Devon, average earnings per year do not relate to the people who want to be able to afford houses and who work in the same area.

[Selaine Saxby]

My hon. Friend makes a good point. That is particularly the case in the south of our enormous county, where people can go out to other places, whereas we up in the north are very much—unless we work in London—in North Devon. Many new builds there are being snapped up as holiday lets or second homes. Many never even make it to market; they are purchased off plan before local residents see the light of day.

Building right down the Devon and Cornwall peninsula is difficult. We have higher land prices, particularly on the north coast, and fewer resources to build and materials to build with, making viability so challenging that the percentage of affordables drops right off. Many of the issues impacting on the housing market at present are particularly extreme on the coast, and we have an abundance of beautiful coast in Devon and Cornwall.

North Devon has an abundance of tiny communities looking to community land trusts, but products that should work well there repeatedly find that the high-unit grant rates required on often challenging sites with high abnormals still have a funding gap of £30,000 per unit, and that is despite the generous registered providers and grant rates from Homes England’s affordable homes programme.

I hope that I have detailed the magnitude and complexity of the problem. I have been walking this road for over 18 months and am grateful to the ministerial team for hearing from me quite so often on this topic. However, what I am struggling to convey is the urgency of the need for a solution.

With summer approaching, we are expecting and, indeed, seeing another surge in section 21 notices, as landlords find ways to evict tenants to enable them to convert these homes into holiday lets. With no registration scheme in place, there is no formal record of how many people are renting properties out on a short-term basis. We desperately need the consultation on the registration of short-term holiday lets to conclude, but it has not even started, despite having been announced last June. The Department for Digital, Culture, Media and Sport assures me that it is imminent, and even Airbnb is calling for one.

Having spent much time with housing providers, I know that they believe that the only solution is to devise another class of planning for short-term rentals, so that councils can differentiate between C3 housing and what would be, in essence, a commercial venture in short-term holiday lets. Local councils could then require licences to run that type of business in a property that was initially built for full-time residency, and limits could be placed in a community if there is deemed to be an imbalance.

We have always welcomed holidaymakers and second-home owners to our beautiful coast, but we have got out of balance, leaving the fabulous pubs, restaurants and hotels that people come to visit—and even our surf schools—unable to recruit enough staff. The situation has extended to our public services, with transferring personnel, however senior, struggling to find housing. With vast distances between so many communities, the increase in the cost of fuel and the absence of public transport, if there are not enough people living close to jobs that are paid a living wage, it is simply not worth travelling to get there in North Devon. We have already seen teaching assistants move out of jobs they love, simply so they can work closer to home. If there are no homes near someone’s job, it leads to jobs being returned, as people simply cannot move into the area.

I believe that we also need to go beyond just tackling business rates on short-term holiday lets; we need to tackle the inequalities between mortgage relief on long-term and short-term rentals, which are viewed as capital assets. Their profits are taxed differently, as returns on capital. Both types of property were built as homes, and they should be taxed comparably. Without a register of short-term holiday lets, I imagine that many are paying no tax at all, which is another opportunity for the Treasury. This is a step that could be taken rapidly to make the private rental sector more appealing to landlords, which is ultimately a step that we need to take quickly in order to begin to provide more housing in the south-west.

Other steps that could be taken rapidly include recognising that Devon has a large number of small planning authorities that all tackle the same challenges, with most having under-resourced planning departments, as detailed in previous recruitment challenges. Will my right hon. Friend the Minister commit to assist our planning departments to reverse building where appropriate, to stop building properties solely for holiday lets or second homes, and to have a clause that exempts people from living there full time? It is one thing for holiday parks, which are designed that way, but actual housing is being built with this restriction in place along the North Devon coast. Clearly that is needed on occasion, but as we have such a shortage of long-term housing, can we not focus on this, given that we are short of the other necessary resources—land, builders and materials?

Will my right hon. Friend the Minister also commit to work with the Treasury to look at taxation reforms and how to tackle the issue of empty properties? We have an abundance of them in North Devon, but it is simply not viable for the council to spend its time and resource on tackling this issue. If we could breathe life into empty buildings, we could take steps to regenerate additional housing, without building all over the beautiful fields of North Devon. I keep being told that the councils have it in their remit to convert space above empty shops into homes. Will someone please come to Barnstaple and make that happen? We have so many empty units with huge storage areas, rather than flats, above them, and tackling this issue could transform our town centre as well as provide vital accommodation.

Finally, please can steps be taken to tackle the issue of viability and barriers to councils being able to build developments with more than an 18% social housing component? I know that we English believe that our home is our castle, but far too many of the residents of North Devon worry about not having a home at all. That causes mental health issues, which are exacerbated further by having so many shortages in mental health services, as we cannot recruit to fill the vacancies.

We get really big storms in North Devon, and we are stuck in a really big housing storm right now. Without urgent intervention, we will have literal ghost towns and villages along our coast next winter, as locals have their homes and opportunities to live and work in their community ripped away from them by something like the Kansas twister. I hope that we can say goodbye to the yellow brick road and that some affordable housing wizardry will be expedited this afternoon.

--- Later in debate ---

[Selaine Saxby]

It has been a pleasure to serve under your chairmanship, Mr Hosie. I am delighted to have welcomed colleagues to speak this afternoon and I thank them all for coming. I thank the Minister for his response; the roundtable will of course welcome him to North Devon as the first bid for that trip—[Interruption.] I had already texted.

This afternoon, I really would like to stress the urgency of this issue. We have been talking about it for a very long time, and although we recognise that the Minister is relatively new to his post, we have been here before and we need something to happen this summer. I hope that he will be able to nudge his colleagues in the Treasury and the Department for Digital, Culture, Media and Sport to deliver the other bits of the jigsaw puzzle.

Question put and agreed to.

Resolved,

That this House has considered the availability of affordable housing in Devon and Cornwall.