Housing and Planning Bill (First sitting)

Teresa Pearce Excerpts

Tuesday 10th November 2015 Public Bill Committees

[The Chair]

In the two minutes left to us, Teresa Pearce.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Given what is in the Bill about starter homes, do you think the Mayor’s housing zone bids that have already been successful will need to be revisited? Secondly, where housing associations are undertaking the build—their tenants now have the right to buy—because of the quality that needs to be in a housing zone bid, some of those properties will cost more to build than the market value. Is it your understanding that they will be recompensed the full cost or just the difference between market value and the sale price?

Richard Blakeway: Taking your first point about the relationship between starter homes and housing zones, once starter homes are introduced formally they will be incorporated within housing zones—

[Teresa Pearce]

Q 26 Will they be revisited?

Richard Blakeway: Well, there is no reason why that would undermine the ability of the housing zones to deliver. It is also important to set out that a number of housing zones already have schemes that have planning permission and will therefore just continue. On your second point in relation to the value of the stock and replacement value, that needs to be looked at, but there should not be that many instances in London where that is the case.

[The Chair]

Mr Blakeway, may I thank you very much on behalf of the Committee for coming to give evidence? It is very useful indeed. We will now move on to the next witnesses.

Examination of Witnesses

Mayor Sir Steve Bullock, Councillor Martin Tett, Councillor Phil Glanville and Councillor Philippa Roe gave evidence.

--- Later in debate ---

[Kevin Hollinrake]

Q 81 But the principle is that it is inappropriate for taxpayers to subsidise someone who can live in market-value housing. Do you accept that principle?

Sinéad Butters: Yes. Absolutely.

[Teresa Pearce]

Q 82 Mr Orr, on the voluntary deal, your organisation and the G15 will work very closely. It is my understanding that the G15 opposes the forced sale of vacant high-value council homes. Is that the position of the National Housing Federation?

David Orr: Just to be clear, the G15 are all members of the National Housing Federation, so we are all part of the same group, as is PlaceShapers. The deal that we have done with the Government is one that says that if the Government provide funding for a discount we will organise the sales. It is the job of the Government, under that voluntary arrangement, to find the finances to fund that. We have never proposed the sale of high-value council stock as a means of paying for it—that is a proposal that came from the Government—and we have not and will not endorse the proposal.

[Teresa Pearce]

Q 83 So you are in the same position as the wider federation of the G15?

David Orr: As a wider federation, what we have been trying very clearly to do is to locate the responsibility for the decision where it lies, which is with the Government. It is not a decision for us, and it is not a proposal we have ever sought or have ever endorsed, and we have no plans to do so.

Sinéad Butters: Similarly, we pride ourselves on our strong relations as community-based housing associations, and therefore we do not endorse the sale of high-value council homes in order to fund this.

[Maria Caulfield (Lewes) (Con)]

Q 84 If I understand it correctly, you both say that you agree that those who earn more should pay more, and I think you have both said that housing associations should have the discretion to set rates, but I understand that there is already provision to set higher rents for those who earn £60,000 or more. How many associations use that provision at the moment and, for those that do not, why not?

David Orr: Very few of them do, partly because there are very few people in those circumstances and partly because housing associations do not always know because they do not have a particular obligation to require that information from their tenants. We do not have very detailed data. Also, it is partly because it is very administratively complex to impose such things.

My view is that we should not think about this in terms of specifically focusing on individual households. We should offer different products at different prices in different parts of the housing market, among which people have the opportunity to choose. Our housing market is not nearly varied enough, and housing associations are an integral part of providing more variety and different pricing in different parts of the market.

I also think that we need to be smarter about how we turn things from a threat into an offer if someone is a tenant of a housing association and their income increases. Rather than pay-to-stay, I would much rather the housing association was in a position to say, “If your income is increasing, we would be happy to sell you a small equity share in the property that you live in.” That has the same effect of providing cash that the housing association can use, and the tenant gets an active benefit from it rather than just paying a higher rent. We have to be much more creative about how we look at all of this and how we change that relationship. In order to do that—to echo what Sinéad was saying—housing associations have to be much more free to run and manage their own businesses. This is a theme that we will be coming to all the time.