Affordable Housing: London

Teresa Pearce Excerpts

Tuesday 14th June 2016 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Sir David. I thank my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate and for her vivid description of the challenges facing London. Those descriptions were mirrored by what was said by Members from all across London—by my hon. Friends the Members for Hammersmith (Andy Slaughter), for Westminster North (Ms Buck), for Leyton and Wanstead (John Cryer), for Hackney South and Shoreditch (Meg Hillier) and for Brent North (Barry Gardiner)—and by what was said about outer-London areas such as Enfield, which the hon. Member for Enfield, Southgate (Mr Burrowes) mentioned.

I am an outer-London MP and I am contacted by constituents day in, day out about the housing crisis in our city—whether that is by parents with children in their 30s who are still living at home or by young families in their third private rented flat in three years. Just recently I was contacted by an older man who had worked all his life but, because of a marriage break-up, is now living in one room in a shared house without even a kitchen to call his own. Rents are skyrocketing, with demand outstripping supply in every section of the housing market. Some local authorities have started doing ambitious, innovative work, but most councils are stretched. One council in my area, Bexley, is often in the position of trying to rent or buy accommodation for homeless families but being it is being outbid by buy-to-let landlords—sometimes the very same ones who caused the homelessness in the first place.

Alongside that, many Londoners’ dream of owning their own home is fading fast. We have heard about house prices increasing enormously across London. Crossrail is about to come to Abbey Wood in my constituency. It will regenerate the whole area, but that also means that people from Abbey Wood can no longer afford to live in the place where they and their parents have lived all their lives. Many Londoners therefore find themselves in the private rented sector, where the average rent is twice the national average for all property sizes, and the gap continues to widen.

People are stuck in the private rented sector on insecure short-term tenancies, unable to save for a deposit of their own because of skyrocketing rents and letting agent fees. Many living in London are turning away from this wonderful city to pursue work and a home elsewhere, as my hon. Friend the Member for Brentford and Isleworth set out. As a result of the affordability crisis, many live in poor, overcrowded conditions. The last accurate figures we had were from the last census and they indicated that over 11% of households in the capital were overcrowded. I am sure that most of us will know from our postbags that the number is now far bigger—I think it would be at least double that, if not triple.

Unaffordable, overcrowded and insecure—that is the housing crisis we face, and it is one we must all challenge, because it affects every part of our society. Unaffordable and insecure housing causes problems right across society, from the people living in a Victorian terraced street that now has 25% of the properties as homes of multiple occupancy to the constant churn of pupils in and out of schools. In a primary school in my constituency, 30 pupils moved in and out in one term—that is a whole class in one term. We can only guess what effect that has, not only on trying to teach a class but on each child’s education. In my constituency there is a doctor’s surgery with 12,000 registered patients, a third of whom churn in and out every year. That makes it difficult for any public health awareness campaigns. There is rising TB, and on important issues such as diabetes, obesity and smoking, GPs have very little chance of building any sort of relationship with their patients.

Across our economy, unaffordable housing has far-reaching effects. Beyond the obvious impact on the amount of disposable income that each individual and family has, the impact on our local and regional economies needs to be looked at. There has been widespread concern about the affordability of housing in London from a variety of industries. The London Chamber of Commerce and Industry reports that almost half of London business leaders believe that the insufficient availability of homes is one of the top three barriers to London’s competitiveness. The situation is so bad that some big employers have begun to look at ways of solving the problems and have begun to take matters into their own hands. KPMG now offers employees a leg up on the housing ladder with discounted mortgages and Deloitte has taken up flats in the Olympic village in Stratford to rent to employees in order to provide more secure, affordable housing. However, the majority of Londoners do not have that help and are facing the affordability crisis alone.

The Royal College of Nursing has polled its members and reports that four in 10 respondents say that they are likely to leave London in the next five years because the cost of housing is so high—a figure that no doubt reflects the experience shared by many Londoners across the economy. As my hon. Friend the Member for Hackney South and Shoreditch set out, at one time it was care assistants who could not afford to live in London, but it is now junior doctors, GPs and surgeons.

The recent mayoral election was, I believe, a referendum on housing. Londoners resoundingly endorsed Sadiq Khan in that referendum. For eight years, the previous Mayor of London—currently the hon. Member for Uxbridge and South Ruislip (Boris Johnson)—had the chance to tackle the affordability crisis in London and he failed. We now have a Mayor who is committed to building housing to ensure that all Londoners have the opportunity to rent or buy a decent home at a price they can afford. However, the scale of the challenge we face in London, combined with the lack of land and the soaring cost of rental properties and properties to buy, means that things will not change overnight. This is not just about a lack of supply, but about what happens even when things come on stream and the supply is there. In my constituency, 700 new homes are being built on my street but there is not a single affordable property, so this is not just about supply.

The Mayor of London recently revealed that the previous Mayor delivered just 4,880 affordable homes in London in his last year—the fewest in decades. The Government’s new definition of affordable housing includes so-called “affordable rent” homes, for which tenants pay up to 80% of market rent, but 80% of very expensive is still very expensive. The new Mayor’s manifesto for Londoners pledges to set up Homes for Londoners, which will build the genuinely affordable homes that we need, including homes for social rent, homes for London living rent and homes for first-time buyers, while giving Londoners first dibs on homes to buy that are built on brownfield public land. The new Mayor will need the support of all of us in this debate to achieve that, and he will need support from Government for a devolution deal that gives London more power to invest in new homes and open up Government-owned surplus land for development.

This is not just about housing, but about life chances and stable communities. Just last night we saw what is great about our city with the coming together of Londoners for the vigil in Soho, in response to the Orlando atrocity. What makes London great is the Londoners within it, and they deserve a decent roof over their heads.

I will end by posing some questions, which I hope the Minister will respond to; if he is unable to, I hope he will commit to responding in writing. What representations from across the public and private sectors have the Department received regarding employees facing insecure and unaffordable housing? What analysis has the Department and the Treasury made of the impact on the local, regional and national economy of the lack of disposable income due to unaffordable housing? Can the Minister let us know about the work that the Department of Health is doing on the cost to the NHS of poor housing and when it will report its findings? Lastly, will he commit today to working with the Mayor of London to ensure that he is able to deliver the policies that were overwhelmingly endorsed by the majority of Londoners last month?