Examination of Witnesses (Questions 240-259)|
TUESDAY 2 JULY 2002
240. Can I take you on then to the question
of planning. Do we need some changes to the present planning system?
Or will the present planning system actually provide the spaces
for the houses that you just said the industry could build?
(Mr Alastair Jackson) I am sorry, could I ask you
to ask the question again.
241. Are there sufficient sites available? If
you like, will the present planning system make sufficient sites
available for the houses that you want constructed? Or do we need
a change to the planning system?
(Mr Alastair Jackson) For the 83,000 to 99,000 houses
that we say are required we believe that with appropriate release
of sites there is enough space being provided through the planning
system for that level of need. There are a series of debates to
be had about exactly where and exactly what kind of site those
properties would be built on, but yes, the planning system is
able to accommodate them.
242. Is it fast enough to meet that spending
that might be available in 12 months' time if you got the figure
you are asking for?
(Mr Alastair Jackson) Yes. The figures for affordable
housing are well within the capacity of the planning system to
243. What about section 106? Is that going to
help to provide this or is that pretty irrelevant to the total
(Mr Alastair Jackson) Part of the evidence we put
in front of you includes an allowance of about 4,000 to 5,000
units a year being provided through the section 106 mechanism.
So that is cross-subsidy from the land owner or the developer
into that affordable housing. No social housing grant is going
in. We have already made allowance for that taking place. Four
thousand compared to 80,000 units is clearly five to six per cent
of the total, so it is not going to make a significant difference.
244. Should the housing subsidy coming from
the Government be there for ever or really should the second or
third generation of tenants be able to walk away with a profit
from the profit?
(Mr Alastair Jackson) It should be kept for ever.
There is obviously the Right to Acquire scheme provided through
the Housing Corporation but what is provided should be provided
as affordable housing and kept as affordable housing.
245. I wonder if you could tell us what you
think should be done to increase the role of the private rented
sector in increasing the provision of affordable housing.
(Mr Alastair Jackson) A really important element of
that is going to be to sort out problems with the housing benefits
system both in terms of its administrative complexity but also
in terms of the rent restrictions that apply. I think the housing
benefit system is turning potentially willing private landlords
away from letting to people in housing need and those people in
housing needagain in our evidence to youare being
pointed towards affordable social housing because the market is
simply unwilling to provide for them.
246. You also mentioned tax incentives and certain
other proposals that could increase that supply from the private
rented sector. If all those measures were put in place, what proportion
of the need for affordable housing do you think could come from
the private rented sector?
(Mr Alastair Jackson) At the moment our estimates
to you are showing that about 10,000 units a year are being added
to the need for affordable housing because at the moment the private
rented sector provision is shrinking. I think a first point would
be to say, right, we could address that 10,000 by encouraging
more, better organised, more responsible landlords into the private
rented sector; landlords who are there both to offer a good quality
product but also there into the longer term rather than as a speculative
investment for a period of a few years. Together with adequate
regulations of those private landlords, I think those kind of
measures would allow the Government to encourage the private rented
sector at nil or very close to nil public subsidy cost, to provide
that kind of 10,000 unit provision.
247. Do you think that different remedies are
required in different regions?
(Mr Alastair Jackson) For the private rented sector
as a whole, no. The investment for the encouragement of regulations
so that you drive out bad landlords and encourage good ones to
stay, the reform to housing benefit, no, those are needed to address
the sector's problems as a whole.
248. How would you reform the housing benefit?
(Mr Alastair Jackson) I think a lot has been said
about its administrative complexities and problems and there was
a recent audit commission report that looked at just that. Our
specific concerns were about the level of rents that are eligible
for housing benefit and a recent report for the Joseph Rowntree
Foundation that shows that typically landlords are wanting to
charge between £15 and £20 a week more than the housing
benefit system is willing to actually pay in housing benefit.
Part of that might be testing the boundaries of the system and
we do recognise that we need to cap levels above which you will
not pay housing benefit on rents, but we believe those caps to
be substantially below what would pay a decent landlord to provide
249. In the past the subsidy went to the bricks
and mortar, did it not? Under the present housing benefit system
it goes to the tenant or on to the landlord. Do you think that
(Mr Alastair Jackson) I think this is a 20-year shift
that we have seen away from subsidies to bricks and mortar and
towards housing benefits. The outcome of this is part of the problem
we are talking about, this level of affordable housing need that
is not being met at the moment.
250. Could we move on to Right to Buy. I just
wondered if you could let us know if you think it should be suspended
or restricted and, if so, how?
(Mr Ben Jackson) Yes, I think we do think that. We
have to look hard at the reality that we face of a significant
continuing haemorrhaging of properties from the pool of affordable
housing. Of course, those properties remain and people live in
them, but the reality is that we lose that from the pool of affordable
housing. Just to look at last year's figures, in comparison to
the 18,000 new units of affordable housing 53,000 were sold through
Right to Buy so we are losing something like three times those
we are building. In London and so on sometimes the proportions
can be higher. It is a huge problem. Not only is it the overall
net loss that we are talking about, but also the types of property,
particularly larger family homes, higher quality properties that
are being lost. It is the actual loss of those from the pool but
also a drain from the public purse because of the differentials
between the amount we receivethe tax payer receives for
the propertyvis-a-vis buying a new one. We are also losing
large amounts. We estimate something like a billion pounds a year.
It is not a small problem. This is something that we now need
251. You say we are losing a billion pounds
a year, but how is the tax payer actually losing?
(Mr Ben Jackson) In terms of the net value. It costs
about £50,000 to build on average a new build versus the
average of around £20,000 per home. Obviously in cash terms
money comes into the public purse, but in terms of that valueif
we are to address this problem of affordable housingit
does seem crazy that we are allowing this continued haemorrhage,
particularly in high demand areas. And that is really what we
are asking, that the Committee would consider that reality and
see whether they might raise this issue with the Government in
terms of selected suspension in areas of high demand and for specific
periods. We have to address that. Obviously, if we have a period
later on where there is large expansion of new build, maybe that
needs to be looked at again. We need to address the realities.
It is interesting to note that in Scotland, as we understand,
new powers of this kind will be made available to allow selected
suspension of Right to Buy in certain areas that are highly pressured.
252. Does Right to Buy not offer a vehicle to
those on low incomes to get onto the housing ownership ladder
in areas of high demand where they would otherwise have no chance
of doing so?
(Mr Ben Jackson) Clearly that is the case, but we
have to look in the round in terms of the overall rights of those
who do not have any housing, for example, and in that situation
I think one has to reappraise the scheme and say that where it
is losing those houses from the pool of affordable homes then
that has to be more important. Of course, it is a hard choice
to make and obviously one understands completely the individuals
who want to make use of the scheme.
253. What I do not clearly understand is that
if you have a four-bedroomed house on the edges of London with
a family on low income living in there which is owned by a housing
association and they exercise the Right to Buy and as such move
on to the housing ladder, what you are saying is that you should
deny them the right to move onto the housing ladderbecause
they will not be able to afford to buy otherwisebecause
in some indeterminate way that is depriving someone else of the
opportunity, even though that family will still carry on living
in that house for the rest of their lives. That I do not understand.
(Mr Ben Jackson) That family may carry on living in
that house and obviously inevitably over whether it is a shorter
or longer term they will sell that house. The likelihood is that
as a result of that it would be lost to the pool and therefore
it will not become available for another family on a lower income.
254. That family itself, that family is also
lost to the pool because you have one less family which you have
to take responsibility for, so it is not as if you are removing
a house and knocking it down. You are taking a low income family
in a house and leaving them together on the property ladder rather
than supported by the state. You are reducing your number of people
who need affordable housing and reducing the property at the same
(Mr Ben Jackson) We have a situation where the need
for affordable housing is hugely greater than the supply and therefore
we have to focus on the supply factor and the house would not
255. It is full already. You are talking about
family housesmy constituency has a lot of these pressuresand
I do not know of any families who are living in family homes in
the affordable sector and the housing association sector who are
saying "We want to move" or "We are going to move
out of the market, we are going to buy our own house". They
cannot afford to. The only way they will get onto the housing
ladder is by exercising the Right to Buy. You have one family
one house; the equation stays the same.
256. Is Shelter saying that in certain areasnot
like my colleagues here but in an area like Tower Hamlets where
families exercise the Right to Buy and then quite often sell it
within three years, often renting it back to the council, they
are then paying for homeless families to stay thereyou
want it suspended?
(Mr Ben Jackson) I am saying that in areas where there
is the high demand and the need and the reality is there are thousands
of homeless families.
257. My colleague is saying that they are not
going into those houses.
(Mr Alastair Jackson) Let us say London, where we
sold 11,000 properties through the Right to Buy last year, if
you assume that only 5 per cent would have turned over last year,
that is 500 units that you do not have in London to let to homeless
households. And 500 next year.
258. I think we are going to have to curtail
this. The thing that worries me is that if you are talking about
stopping the Right to Buy are you not going to encourage people
to rush in and exercise their Right to Buy in the next few months?
(Mr Alastair Jackson) I think it would be a matter
of stopping the Right to Buy for a fixed period only and in order
to meet this really difficult situation on the supply side of
259. In your evidence you seek the need to address
the entrenched argument of the NIMBY lobby. How would you combat
NIMBYISM in relation to affordable housing?
(Mr Ben Jackson) I do not think there is an easy answerbut
I think we have signs of this developingwe need to have
a more informed broader debate about the housing issue. The problem
for me is that I think that looking more broadly people do not
realise the consequences of the actions of blocking development
at every corner. We would see the consequences as those houses
of homeless families and many others who do not have access to
reasonable housing. Shelter accepts its part in that process.
We need to go out and win the arguments more generally in terms
of the public and the media and so on.