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The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Jim Fitzpatrick): I thank my hon. Friend the Member for Stafford (Mr. Kidney) for raising the issue of affordable housing, which the Government consider to be of great importance to the future economic and social development and well-being of our country. Before moving to the specifics of the west midlands, I want to outline what we are trying to achieve nationally, as well as that which we have accomplished. Some of those issues were raised by my hon. Friend.
First, as my hon. Friend mentioned, the number of home owners has increased by 1 million since 1997. Repossessions have fallen from 75,000 in 1991 to just over 6,000 in 2004 and mortgage interest rates have remained at low levels over a considerable period. We have a strategy to increase housing supply, as set out in the communities plan and that is now delivering results in London and the south-easta 36 per cent. increase in new homes built between 2001 and 2005, combined with increasing densities and reuse of brownfield land. That is addressing one of the causes of affordability problems: that, over several decades, we have simply not built enough new homes.
My hon. Friend raised the issue of homelessness and the fact that it is perceived as increasing and becoming the predominant route to social housing. We have tried to tackle the worst homelessness problems, as I am sure he knows. We have reduced rough sleeping by 75 per cent. and ended the long-term use of bed-and-breakfast accommodation for families with children. The number of people becoming homeless is also falling. The latest statistics, from April to June this year, show homeless acceptances as 17 per cent. lower than in the same period in 2004.
A range of measures are necessary in addition to a stable market and increasing supply to tackle the problem of the lack of affordable homes. Since 1997, we
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have doubled the investment in affordable housing for rent or purchase. Over the three years to 2006, £5 billion will be spent. That investment will support the delivery of our new range of simpler, more affordable, more accessible home ownership schemes. In the short term, through our new homebuy schemes, we will help more than 100,000 households to own their own home by 2010. Homebuy will provide a flexible shared equity-based product that will increase access to home ownership for those currently priced out of the market. It will also provide opportunities for social tenants to buy a share in their homes. Homebuy will reinforce the longer-term strategy by increasing home ownership opportunities for key workers now.
Many initiatives focus on the urban areas where key workers and first-time buyers have found it difficult to obtain affordable housing but, as my hon. Friend said, rural areas have not been and will not be overlooked. Current schemes are designed to be flexible enough to respond to the needs of rural as well as urban communities. The Rural Affordable Housing Commission is now examining issues, problems and solutions across the country in rural areas, and will make recommendations based on good practice.
Empty homes are also a factor in the contribution to an adequate supply. My hon. Friend produced a useful pamphlet that highlights the issue, but we do not agree that a new "redfield" label is required. Over the last decade, the number of vacant dwellings has dropped by nearly 180,000, to 690,000 in 2004. More remains to be done and we recently provided local authorities with a new toolempty dwelling management ordersto support their efforts to return empty dwellings to use. There are also tax incentives to support the use of space above shops, the conversion of properties and the renovation of properties that have been empty for three or more years.
The west midlands contains some urban areas where market restructuring is essential and, indeed, is pressing aheadfor example, the north Staffordshire and Birmingham-Sandwell housing market renewal pathfinder areas. But in other areas there are significant affordability and supply issues comparable with those seen in parts of the south-east. The regional spatial strategy has had a key input in the update of the regional housing strategy that was completed in June this year.
The importance of housing in delivering the region's wider objectives is demonstrated by the commitment to an extensive research exercise. That research, which is the envy of many other regions, has provided a comprehensive picture of the housing problems in the west midlands. It was led by Birmingham university's centre for urban and regional studies, which identified the key issues and used extensive engagement to develop a consensus on the priorities for action.
The research resulted in the definition of four housing market areas in the region. In each area, surveys of needs and aspirations were considered together with average house prices, incomes and trends in household formation. It confirmed that affordability problems are experienced most acutely in the west and south of the region, where price-to-income ratios reach a value of nine. In the north of the region, although prices are
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lower, incomes are also lower. That has resulted in affordability problems that had not previously been highlighted.
On the basis of the estimates of affordable housing needs for each market area, a total of 78,000 affordable dwellings will be required across the region over the period to 2021. The central market area, including the Birmingham conurbation, has the greatest requirement: more than 45,000 dwellings. Issues highlighted include the need to provide improved choice of property type across the area, where terraced properties are over-represented.
Lynne Jones: Is my hon. Friend satisfied that there are enough new affordable homes, particularly for rent, to meet demand? I gave some figures earlier. In Birmingham, the number of re-lets has fallen from 9,200 a year in 1997 to 4,600. As a result, a higher proportion are being used to deal with homelessness. Will he ensure that the supply is adequate? Birmingham city council has been demolishing homes without building replacements. That council alone needs 3,000 new homes a year, more than even Shelter
Jim Fitzpatrick: My hon. Friend makes a strong point. I know that she has written to the Office of the Deputy Prime Minister. I also know that there is to be an Adjournment debate later this week to deal with aspects of the Birmingham difficulties.
I can only repeat what I tried to say at the beginning of my speech. Decades of decline in house building have led to a serious problem and the issue of affordable housing and the building of enough affordable homes in the country is at the top of the ODPM's agenda. We are doing all that we can to address the deficit in the meantime, and opportunities such as this to put on record what has been done nationally and regionally will help to fuel the debates and allow us to make progress, with the assistance of my hon. Friends.
In the west market areaHerefordshire and Shropshirethere are also high levels of home ownership, with significant retirement migration and a limited mix of properties. This pressure on prices has led to a requirement for 12,000 affordable homes. My hon. Friend the Member for Stafford will be most interested in the north market area, which covers Stoke and northern Staffordshire. This, like the central area, suffers from an over-representation of terraced properties. The economy is weak and insular, and generally low incomes have led to a requirement for 3,000 affordable homes.
To address the need for affordable housing in the west midlands over the next two years, £198 million has been allocated to the Housing Corporationan 11 per cent. increase on the figure for the past two years. That funding is prioritised toward the mainly rural areas of the region in the south and west housing market areas. It will deliver an increase in affordable homesfrom 1,200 for 200406 to 2,500 for 200608in these largely rural areas.
To improve delivery, the Housing Corporation is seeking ways to improve the cost-effectiveness of its programmes. These range from innovative and modern
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methods of construction to working with leading partner registered social landlords. The regional housing board is facilitating region-wide sharing of good and innovative practice in the delivery of the regional housing strategy. Practitioners will be encouraged to think the unthinkable in considering the most effective ways of delivering affordable housing. Solutions will be sought from all sectorslegal, financial, technological, property, house-building, voluntary and charitableas well as local authorities and RSLs.
The Government are delivering a stable housing market that in itself will help to address many of
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the factors associated with the affordability of housing. The west midlands regional housing board has gained a thorough understanding of the problems across the region and the regional housing strategy provides guidance on the issues to be addressed in each of the housing market areas. The Housing Corporation and the regional housing partnership will work with sub-regional partners to deliver more affordable housing, and to develop and implement best practice across the region.
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