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In some parts of the country, the problem of second homes is grievous; some of my hon. Friends feel that greatly. Equally, in other areas there is poor demand, which the pathfinder measures are designed to solve. It is a complex situation. Even in the north-west, we have
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pathfinder projects less than 40 miles from places where excessive demand for second homes is squeezing out local populations. Housing is not a liquid market, and it is not easy to match demand and supply, even over a very small area.

In producing this report, the Select Committee has done the House and the Government a service by analysing the problem and providing a critique of current policies. I look forward to hearing the Government’s response.

Several hon. Members rose—

Mr. Deputy Speaker: Order. Before I call the next hon. Member, I remind the House—Front Benchers, Back Benchers and those who are seeking to intervene—that today’s business is so structured that time is limited in both debates. Perhaps hon. Members will bear that in mind when making their contributions.

1.32 pm

Mr. Andrew Smith (Oxford, East) (Lab): I welcome this debate and congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and the Communities and Local Government Committee on their report on affordable housing.

To meet the needs of my constituency, we need much more housing of all kinds. When mid-terrace former council houses on estates are selling for more than £180,000, there is indeed an interesting debate to be had about what is affordable. I note from the excellent Housing Federation booklet that my hon. Friend commended to the House that while the average house price in the south-east is 8.9 times the regional average income, in south Buckinghamshire and Oxford the ratio is more than 12 times, making it virtually impossible for many people in my area to buy a house. We certainly need housing of all kinds. I strongly endorse the Committee’s conclusion that

There is a compelling case on social, economic and environmental grounds for substantially more such housing in central Oxfordshire and for the review of the green belt that is necessary to enable suitable sites to be identified and developed.

The social case for additional housing is well documented in the strategy put forward by Oxford city council, and it is evident in every one of my advice surgeries, as I am sure that it is in those of my hon. Friends. High house prices, high rents and a shortage of social and affordable housing condemn thousands of people in our city to unacceptable living conditions. They make it very difficult for people working locally to live anywhere near their place of employment, and cause recruitment and retention problems for private and public sector employers. City council homelessness statistics show that the proportion of households in temporary accommodation is running at more than twice the national average. The need for more affordable housing is regularly raised with me by the chamber of commerce, the universities, the hospitals, other employers large and small, and the trade unions.
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Annual completions of affordable housing in Oxford, for rent and social ownership, have been running at about 150 a year, but a rate many times that level is needed to make real inroads into housing need. One important need that is often overlooked in the understandable focus on homelessness and temporary accommodation relates to the plight of families with children who are already in social housing, but are stuck in cramped maisonettes and flats and face a wait of years if they are ever to get a transfer to a house with a garden.

Mr. David Drew (Stroud) (Lab/Co-op): My right hon. Friend represents an urban area, but it is just as much of a problem in semi-rural areas such as mine, where people are effectively driven out and have to go to the market towns, where they end up in overcrowded maisonettes and flats. It is really awful, and we must do something about it.

Mr. Smith: Yes, indeed. Moreover, it sends out entirely the wrong signal. These are hard-working families paying their rent and abiding by the tenancy conditions, yet they are stuck for an unacceptably long time in unsatisfactory accommodation. The situation must change.

Acute pressure on the existing private housing stock is also having damaging effects. In my area, it is leading to subdivision of houses and excessive multiple occupation, exacerbating the shortage of family housing and often damaging the quality of life in residential areas. I therefore welcome last week’s statement by my hon. Friend the Minister for Housing and Planning giving new emphasis to the importance of family housing and gardens, because precisely such housing and gardens are being relentlessly eroded in my constituency. What is more, the tight constraints of the green belt— [ Interruption. ] It would be good to have the support of the party of the hon. Member for Hammersmith and Fulham (Mr. Hands), who is making sedentary interventions, when it comes to the need to review the green belt in central Oxfordshire. The tight constraints of the green belt impose a pressure-cooker effect on residential areas that can be relieved only by meeting more housing need and demand though new development on the edge of Oxford—for example, to the south-east and to the north. The Minister’s recent announcement of £1 million of growth-point funding towards city centre housing was welcome, as it can help to create 600 to 1,000 new homes. However, the scale of housing need and the demographic and employment trends are such that the provision of some 2,000 dwellings or more a year for the next 20 years is the sort of expansion that we really need.

The economic case for land to be allocated for more housing is equally strong. As a globally recognised location with excellence in many areas of research, medicine, bioscience and other applied sciences, as well as publishing, and outstanding achievements in the automotive industries by BMW and Unipart, Oxford has the potential to make a still greater contribution to the regional and national economy. It would be a terrible waste for all that to be held back by unduly restrictive planning policies. The south-east plan must give full recognition to Oxford’s enormous potential and realistically address the land provision and
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transport infrastructure that is required for it to be fulfilled, including regional links such as the east-west rail line.

The environmental case for housing growth in central Oxfordshire is also strong. Urban extensions to Oxford are far and away the most likely to be sustainable, with shorter journeys to work, and a higher proportion undertaken by means apart from the private car than in any other location in Oxfordshire.

The Select Committee report has some interesting comments about environmental sustainability and minimising the adverse impact of new housing. I believe that we need to move beyond old assumptions about growth always damaging the environment. We are an innovative and creative country, and we must hold to and fulfil the ambition to design new development, with supporting transport and other infrastructure, in ways that minimise pollution, conserve energy, incorporate power microgeneration and increase biodiversity. The Chancellor’s commitment yesterday on carbon-neutral housing is a welcome step in that direction.

I endorse what the Select Committee report says, and the comments of my hon. Friend the Member for Milton Keynes, South-West in her excellent speech, about forward funding for transport, health services, schools and other physical and social infrastructure, and the importance of the need for next year’s spending review to address that. I support the Minister for Housing and Planning and her colleagues in the representations that I am sure that they will make.

It is crucial to knock on the head the myth that those of us who strongly support more house building somehow do not care about green spaces or want to concrete over south-east England, and all the other nonsense that is trotted out. Nothing could be further from the truth.

The beautiful setting of Oxford and the quality of its environment depend more on the green wedges coming into the heart of the city than on the rigid preservation of existing green belt boundaries. Land on the edge of the city, which makes a high quality contribution to the landscape and ecology of the area, must of course be strongly protected and safeguarded. However, other areas of the green belt do not fall into that category. Where extensions are made to the city, an integral part of the plan should be to extend and safeguard the green wedges, for example, along the flood plains and out towards Shotover, so that development is balanced by the proximity of open space and attractive landscape.

Oxford is in the fortunate position of having the potential to grow in those sectors of high added value that the Chancellor mentioned yesterday—with all the attendant benefits for living standards and welfare—while enhancing its environment and the quality and availability of housing. That is an enormous opportunity and responsibility, and we look to the Government to play their full part in fulfilling it, so that, through enlightened planning policy and investment, we secure for all our citizens the affordable and decent housing to which they should be entitled in a civilised society.

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1.43 pm

Mr. Philip Dunne (Ludlow) (Con): I take on board your earlier comments about trying to be brief, Mr. Deputy Speaker.

I represent a rural constituency. As most hon. Members appreciate, concerns about affordability are not restricted to urban areas. In our sparsely populated rural area we experience many problems similar to those in urban areas. The main difference is lack of delivery in rural areas. House building has focused in and around urban areas, and funding from the Government to support affordable housing has followed. That was brought home to those of us who serve on the Public Accounts Committee—it is good to see other members of it here—earlier this week when we considered the National Audit Office report, “A Foot on the Ladder: Low Cost Home Ownership Assistance”, which forcefully made the point that house prices are rising fast and incomes are relatively static, especially in rural areas, and the problem is getting worse.

The NAO identified £112 million of efficiency savings that could be made from the implementation of the Government’s policies on supporting affordable housing. Redeployment in the way that the NAO suggests would help more than 4,000 people into affordable housing. I hope that the Department will take note of that and try to implement some of the recommendations.

I have recently been lobbied by the Midlands United group of housing associations, which has made a submission to the Chancellor for the comprehensive spending review, pointing out some of the impact of the lack of priority afforded to the midlands, especially rural areas, in recent years. The east and west midlands have almost one fifth of the country’s housing stock but receive less than 15 per cent. of public funding for housing. Last year, just under 30,000 new homes were built in the midlands, but only just over 3,200 were affordable homes. That is not good enough. The needs of the area are acute.

One reason for the lack of priority is that no funding has been provided through the Government funding mechanisms for key workers who live outside London, the east and the south-east. That means that, of the £470 million that the Government spent last year on their affordable housing schemes, £221 million was spent on key workers, but not a single pound was spent outside those areas. None of that was spent in the midlands or in the north. One reason for that is that we are labouring under an excessively centralised housing allocation. The new regional spatial strategies grant unelected regional assemblies the ability to allocate houses according to their priorities. Not surprisingly, that tends to focus house building and growth on the larger population centres. For example, in the west midlands, a preponderance of housing is being allocated to the urban areas, leaving the rural areas to pick up the scraps.

I agree with the hon. Member for Hazel Grove (Andrew Stunell) that we should consider local determination based on local priorities, and provide much more flexibility for local authorities to decide how many houses they should build and where they should build them.

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Andrew Stunell: Does the hon. Gentleman agree that in many rural areas outside the green belt, local communities would welcome the addition of affordable housing but find themselves restricted by the current national guidelines and regional rules?

Mr. Dunne: Yes, I agree. I was about to cite the example of South Shropshire, which the hon. Gentleman used earlier. This year, the district is restricted to 136 units of housing compared with an average in the past 10 years of more than double that. As a member of that local authority, I can report that we are arguing for reverting to between 200 and 250 housing units in the next allocation from the regional assembly.

The problem in rural areas, as in other areas, is compounded by homelessness. Again, the hon. Member for Hazel Grove mentioned that. The housing association in South Shropshire has approximately 2,000 units. About 10 per cent. come up each year as people move on or move out. Approximately 200 units are therefore available each year. However, between 200 and 230 families present as homeless in South Shropshire every year. Given the proper priority to house the homeless, there is an almost static market in the existing social housing structure in the district. The need to lever in additional affordable housing through social housing and affordable schemes is pressing in my area, as it is in many others.

The hon. Member for Milton Keynes, South-West (Dr. Starkey), the Chairman of the Select Committee, referred to the density guidance as a positive measure to try to improve availability. That may be correct in some respects, but I am worried about using a blanket density minimum throughout the country. In the few areas in my constituency that are able to put up housing, there is now a requirement to build at the same level of density as applies in the cities. Consequently, three and four-storey blocks of flats are being slapped into little estates on the edges of small towns or villages of predominantly single-storey bungalows or two-storey houses. Those flats are completely out of character with the rural conditions in which they are situated. The Government need to look carefully at this prescriptive centralising approach; they should be more prepared to show flexibility in rural areas.

The hon. Member for Hazel Grove applauded the measures relating to the affordability percentage, but the experience of imposing a 50 per cent. affordability criterion in South Shropshire has not been as rosy as he might have anticipated. The project is still in its early stages, so that might change over time, but we are now three years into the project, and we are on the third set of revisions to the plans put forward by the Liberal Democrat administration. Developers are not flocking to South Shropshire—far from it. They are giving it a wide berth, and choosing to develop in neighbouring authorities where no such constraint exists to put pressure on their profit.

Mr. Roger Williams (Brecon and Radnorshire) (LD): I note the points that the hon. Gentleman is raising, and I am sure that the plans are improvable. Does he not agree, however, that an important issue in connection with affordable housing is land values? The
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policies of his district council can ensure that developers have a realistic view of land values, and can therefore purchase it at such a price as to make their developments of affordable housing reap rewards for them.

Mr. Dunne: I accept that land values play an important part in determining the overall cost of housing, but I do not accept that that policy is having the effect of reducing land values. The problem is that, because of the restricted number of units that we can build, the land values rise whenever consent is granted. The land value for affordable housing rises as well, because that is the only kind of housing that can be built. So the policy is not having the desired effect that the hon. Gentleman suggests.

Mr. Anthony Steen (Totnes) (Con): The problem in Shropshire that my hon. Friend has mentioned is mirrored in south Devon, where the Liberal-run council in Torbay has been insisting on 40 to 50 per cent. affordable homes in each development. As a result, perfectly good sites are not being developed, because the private developers are saying that they cannot possibly manage to subsidise so many homes—subsidy is what affordable housing is all about, after all—out of the profits of the private houses that they are building. The consequence is that the private housing prices go up, and the subsidised houses never get built, because the developers do not want to build them. So we are on a hiding to nothing. The whole concept of affordable homes—subsidised homes—is a total myth.

Mr. Dunne: I am grateful to my hon. Friend for that intervention, which illustrates well one of the unintended consequences of these policies. I can give the House another example from my constituency. The largest development that has been consented is in a town called Cleobury Mortimer, where 112 houses were consented. This happened just before the introduction of the 50 per cent. policy, but more than one third of those houses were to be affordable. They have not been delivered, however. The builder had secured the opportunity to fund the affordable housing through the construction and sale of the open-market housing, but because of the high proportion of affordable housing in the scheme, he did not find it attractive enough to be able to sell the open-market housing. The entire scheme is therefore stymied, and is at present stuck. We are therefore delivering neither affordable nor open-market housing, despite having that large consent in that town.

I have touched on some of the potential solutions to those problems, and I want to finish by highlighting one or two in greater detail. It is important to give a fair allocation of public housing grant to areas across the country, not only for social housing but in low-cost assistance. There are just as many key worker categories and jobs needing to be filled in rural areas as there are in urban areas, and it seems quite wrong that Government policy should prevent that from happening.

Local authorities should be given more control over the number of houses that they are able to consent to each year. They should be less prescriptive about density, and more imaginative in the way in which they
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allow houses to be reconfigured. Examples include dividing a reasonably large house into two to provide a retirement flat for elderly parents or, in our area, allowing farmhouses to be divided into two to provide separate dwellings within the same house for parents and children, when the children start to have children of their own. Such reconfiguration should be permitted without imposing the requirement to sell the houses. A local authority could impose a section 106 agreement to require the two units to be sold together, thus preventing the opportunity to make capital gain, which seems to be the fear of so many of our local planning officers.

There should be much more flexibility over the supply of land outside the green belt. Areas such as mine have acute housing need. Indeed, the housing needs survey found that we should be building 287 affordable houses a year, but we are building less than half that number in total at the moment. The local authority should have the flexibility to allow some greenfield development, or to change the definition of brownfield to encourage farmyard development, for example. There should be more local determination. I agree with the right hon. Member for Oxford, East (Mr. Smith) that supply is part of the key to this issue, in terms of pricing and availability. We need the Government to show flexibility on this matter.

1.56 pm

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), the Chair of the Select Committee, on its report, and on the fact that the Committee is also undertaking an inquiry into the social housing element. I shall be concentrating on social housing in my speech today. Like other hon. Members, I want to emphasise that a key issue is supply. We have seen a 30 per cent. fall in lettings in the social housing sector since 1999-2000, and a decline in the overall stock in the social rented sector of 238,000 units, mostly as a consequence of the right to buy.

We have seen a welcome upturn in new housing provision recently, particularly in London but also in other parts of the country, but this has to be considered in the context of a continuing fall in supply that outstrips provision. Last year in London, for example, 6,037 additional affordable homes were constructed, but 11,549 were sold through the right to buy. It is important that we consider both sides of the equation and concentrate on the broader picture if we are to address what is nothing less than a crisis in the provision of social housing to meet the needs of our population.

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