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I have visited a large shared ownership development for key workers called Mallard House a few times. It was featured in the Evening Standard a couple of years ago as Britain’s most expensive shared ownership
scheme; I cannot remember the exact prices but they were in excess of £300,000. The newspaper went door to door trying to find out who lived in this “key worker” housing unit. A total of three people in the 80 units could in any way be defined as key workers. The development simply has not been a success, because the shared ownership has been made far too expensive.
Mr. Khan: Is the hon. Gentleman saying that the reason for the high prices is the greed of the developer resulting from a lack of definition of affordable housing, or that the developer is using the high prices to subsidise the affordable units?
Mr. Hands: Unless we make the private sector housing extremely expensive at a riverside site such as that, it will be difficult to deliver a large amount of social housing for rent. The hon. Gentleman’s optimistic confidence in the 50 per cent. rule across London will turn out to be gravely misplaced.
Mr. Slaughter: The hon. Gentleman is being very generous with his time. I do not agree that the poor should not be able to live in prosperous areas, which seems to be what he is saying about riverside developments, but I am also worried that he is anticipating my speech. If he is saying that affordable housing in such developments is too expensive, surely what is needed is more intervention to ensure that there is more affordable housing, not less. Will he join me in condemning the Conservative council in Hammersmith and Fulham, which said that, in every case, it will prioritise expensive shared ownership housing over social rented housing?
Mr. Hands: We have had these exchanges for about seven or eight years. The hon. Gentleman approved the Imperial Wharf development in the first place, so it is perhaps understandable that he is a little touchy about it. It is certainly not the objective of anybody to have very expensive and over-priced private sector homes put on the market in my area of London. There is a real crisis facing the hon. Gentleman’s constituents as a result of the lack of affordability throughout west London, which is one of the main reasons for the flight of 250,000 people from across London per annum.
One of the people who would disagree the most with the hon. Gentleman is the former Labour councillor for the Sand’s End ward, which covers the development to which I referred. Sadly, he lost his seat by more than 700 votes in May. He described the units of social housing for rent as completely unacceptable, of poor construction and very small. He called them unacceptably small, and it is a shame that his voice is no longer being heard speaking out against such developments, which he thinks have been catastrophic failures.
Moving on, I wanted to look at how we could make private sector home ownership in constituencies such as mine more viable. First, we need more house and home building across a variety of sectors.
Kelvin Hopkins: The hon. Gentleman is talking about the quality and size of housing. Was it not the Conservative Government who abolished Parker Morris standards? Is he suggesting that they should be reinstated?
Mr. Hands: That will be a matter for the Conservative party’s ongoing policy review and we will look at it very closely.
There is a need for more homes across a variety of sectors and Labour’s approach—that rising house prices will necessarily lead to a generation of more units of social housing for rent—is simplistic. We need a greater diversity of housing in constituencies such as mine. We need to speed up the planning system and make it more flexible. The planning gain supplement will almost certainly not be the solution; in general, taxing home building will not be the solution and previous attempts to capture the uplift in land prices for the Treasury generally have been a failure.
The Labour policy that, as a hard and fast rule across London and perhaps across Great Britain, 50 per cent. of new stock is to be social housing for rent is misguided. It is strongly contested by some London Labour councils. The London borough of Newham has, I think, come to the conclusion that what it needs is more lower cost private sector home ownership of the sort that I describe, in order to create a better balance in that borough. Such councils argue that they want to increase home ownership and shared ownership.
There are also genuine problems to do with stamp duty being too high and with the threshold for inheritance tax being too low, but that is probably a matter for a separate debate. There are people who are paying inheritance tax on former local authority right-to-buy properties on estates such as Sulivan court in my constituency. The original intention behind inheritance tax was not that people who bought their council flats under the right to buy in the 1980s and 1990s should later leave an inheritance tax bill to their children.
What we need across Britain is a much more liberalised approach to land use, and especially urban land use. There has been a lot of over-classification. In my constituency, the previous Labour council has classified some areas as key local shopping areas. The Dawes road is full of unused shops—disused retail frontage—which could, with a little more imagination, be transformed into residential property.
Mr. Khan: The hon. Gentleman talked about more imaginative use of land. Is he therefore surprised that some of his party colleagues have, for example, signed an early-day motion objecting to new homes in West Sussex, and that there is opposition from his Front-Bench team to new homes in Surrey, and that Essex MPs are opposing increased housing for Essex, and that, in another early-day motion, Hertfordshire MPs oppose increased housing in Hertfordshire? How persuasive is he with his fellow Tory MPs?
Mr. Hands: I welcome that intervention repeating comments in the parliamentary Labour party brief. It is our view that local considerations should be taken into account. I am speaking about the problems of inner London, and those faced by my constituents. It is not for me to dictate what the policy—
Mr. Khan: Will the hon. Gentleman give way?
Mr. Hands: No, I shall not do so again. I have been extremely generous and several Members are waiting to speak.
We need more market forces in home building. There are significant supply and demand issues. We need more housing of all types. I wish there to be greater liberalisation of the system. We also need to do far more to help young people and young families—such as those in my constituency—access private sector housing and home ownership.
2.32 pm
Mr. Michael Wills (North Swindon) (Lab): I shall endeavour to follow the guidance on brevity, Mr. Deputy Speaker, and I should apologise in advance for my imminent absence from the Chamber as I am required to attend a Committee sitting. I wish to make a few remarks on how the affordable housing problem affects my constituency in Swindon; it is not just a problem for London and south-east, as we have heard.
Swindon desperately needs more affordable housing. More than 5,000 names are on the waiting list for social housing, and thousands more people, especially younger people, are unable to buy their own homes. The average price of a new home in the Swindon area is now more than £205,000. As a result, many young people in my constituency cannot afford to buy a home in the neighbourhood in which they grew up.
In our debate, we have heard much about the appropriate target for affordable housing. That is not the issue in Swindon; the issue in Swindon is whether the target that has been set will be met. In its local plan, Swindon borough council is committed to ensuring that 30 per cent. of all new housing is affordable, yet the borough council agrees new development after new development with levels of affordable housing either well below that or with none at all. Every development that is permitted without such a level of affordable housing is a wasted opportunity for my constituents. About 2,000 new houses are being built in Swindon every year; their total sales value is more than £400 million. The fact that, despite such a huge figure, so few affordable houses are being built is a blow for every one of my constituents who yearns to own their own home but cannot afford to do so.
It is imperative that that neglect of affordable housing is reversed, because Swindon borough council is about to embark on a massive expansion of housing in the town; the total could be about 35,000 houses, with a current market value of about £7 billion. How much worse will the situation be in terms of social division and all the wasted opportunities for home ownership if the council does not ensure that at least 30 per cent. of that huge expansion is affordable?
Sadly, there is, however, very little evidence that the council has grasped the urgency of the situation. Last year, it launched a flagship statement—50 promises to the people of Swindon—by which it said it wanted to be judged. Sadly, it did not commit itself in those 50 promises to meeting its own target of 30 per cent. of new houses being affordable; it committed itself to only 16 per cent. I have gathered thousands of signatures on petitions calling for the council to ensure that more affordable housing is built, but the council has ignored those petition signatures.
I do not know the reason for that neglect. Is it because the council values affordable housing less highly than other planning gains, or is it ineffective in its dealings with developers? However, there is certainly a widespread perception among my constituents, which I share, that the developers that have made, and are about to make, billions of pounds out of building houses in Swindon have given very little back. Whatever the reason for Swindon borough council’s current failings on affordable housing, it must do better.
I congratulate my hon. Friend the Minister and her Department on the new planning guidance. It is certainly a step in the right direction in encouraging local authorities to ensure that more affordable housing is built, but what more can Ministers do to force local authorities to meet the targets that they have set in their local plans? The new planning guidance does not spell out the penalties for such failings, and I will be grateful if she undertakes to spell out what they could be, so that local authorities know that they cannot go on ignoring—as Swindon borough council is—the needs of all those who depend on affordable housing to make a home for themselves and their families.
I would also be grateful if the Minister undertook to devise a timetable for such interventions, because the longer a local authority delays in meeting its targets the more difficult it will be for it do so. Every development that is agreed with levels of affordable housing below the target simply raises the hurdle higher for subsequent developments and makes it all the less likely that overall targets will be met within the time scales of the local plan. Everybody should be able to afford their own home and I ask the Minister to put measures in place to persuade Swindon borough council—if necessary to force it—to make sure that everyone in my constituency can do so.
2.38 pm
Dr. John Pugh (Southport) (LD): It is of course very unusual for Members of this House to talk and not to know exactly what they are talking about; it is almost unprecedented, in fact. But we are all in that situation with regard to affordable housing, because there is a central question: affordable to whom, and affordable where? That means different things in different places to different people. Although I am a member of the Committee and participated in the report, I can talk authoritatively only about the situation in my constituency of Southport and the north-west. Week after week, I meet young couples who can neither rent nor buy appropriate property. They are inadequately housed with relatives, and in some cases are potentially homeless. They do the rounds and get on long council housing waiting lists and approach the housing associations, and by and large, they do not get very far.
I will set aside the general problem that many Members experience of constituents whose children would, in the normal run of things, expect to have houses in future, but who—like my own children—find themselves with no mortgage, no pension arrangements and a certain amount of debt as a result of going to university. Instead, I want to focus on the immediate needs of the people who come to see me about housing. Generally, they are low-waged couples with children.
My constituency is a relatively affluent seaside resort, but even in affluent-seeming resorts there are, in general, low wages in the care, retail and leisure sectors. Such people cannot commute a long way to get to work; they have to live locally, because commuting is expensive. They often have school-age children and caring responsibilities locally, and they depend on family networks for child care themselves. So in my constituency, we have the phenomenon of people with jobs who have needs, and simply not enough houses. It is a north-west housing hot spot.
A well-documented study has established that the housing situation has been a restraint on the economic growth of the town. It causes migrant workers with low housing needs to be drawn in to fill the gaps, and it results in a less balanced community, with more elderly people and fewer younger families. There is a very serious supply problem. Research throughout the country shows that the affordability crisis is fundamentally caused by a lack of supply; however we dress it up, that is what it boils down to. The situation is different in Southport.
Anne Main (St. Albans) (Con): It is not just a question of supply. In areas such as mine the average house price is £300,000 and it is not possible to build enough houses to bring prices down. Surely the hon. Gentleman agrees that we need to look at all the levers, and perhaps consider increasing the role of the rented sector. Does he agree that we cannot simply ensure that people can afford to buy houses if prices are that high?
Dr. Pugh: I do not disagree. My argument is that the fundamental problem is the lack of supply, as my hon. Friend the Member for Hazel Grove (Andrew Stunell) said at the beginning of the debate. There are other problems, which need to be resolved, but anyone who compares the data with international data will see that the UK has a supply problem.
In Southport, the supply problem does not relate to land. Land is available for development—there are big and small plots—without encroaching on the green belt to any great extent. In fact, the causes of the problem lie elsewhere. At one time, they to some extent resided with the builders, who preferred to build luxury flats, often demolishing Victorian houses to do so, and to build for the rich and the retired, thereby bringing such people into the community. That was to some extent stopped by Government planning guidance. We now have planning restraints, housing targets and Government guidance, which we must come to terms with. Paradoxically, the problem now is the restraints and targets, coupled with a lack of support from the Housing Corporation.
Southport is part of Sefton, which is a council with a pathfinder area in Bootle. It might plausibly be argued that my constituents could simply move south to Bootle and re-populate the city. That might seem an attractive analysis if we take the example of London, but on the ground the situation is very different. There are serious flaws in that plan, as I hope the Minister will accept. Pathfinder development has been slow and far more expensive than anticipated. As we all know, houses on whole streets that could in the past have been bought for very limited sums now cost £60,000 each. Culturally, Southport and Bootle are very different
communities, and the pathfinder area and the surrounding region have their own affordability problems. That is quite apart from the question of whether my constituents could afford to travel to work in Southport, and whether they would want to uproot their children and abandon family networks. In my council area, we cannot simply expect the jobs to follow the housing—that is not plausible and it is not going to work, any more than the suggestion in the Eddington report that economic growth will follow is plausible. It is too simplistic. We need sustainable, local and subtle solutions.
We have made some progress in getting that point across. It is certainly understood by the council and English Partnerships. The regional development agencies seem to have wised up, and the Housing Corporation has caught on. The Minister for Housing and Planning also seems to have accepted the point intellectually. There may be a few difficulties with the Planning Inspectorate, but the argument is being won.
There is an unassailable case for less rigidity and more flexibility—for empowering and encouraging local, sustainable and pragmatic solutions. That is the case in theory; on the ground, however, nothing very much is happening. I shall return to my constituency tonight and find tomorrow that I have the usual depressing series of cases, with often very futile outcomes.
2.44 pm
Richard Burden (Birmingham, Northfield) (Lab): Like other hon. Members, I warmly welcome the Select Committee’s report and congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) on her introduction. I add my voice to those that have emphasised the importance of the point that the report makes about the need to increase radically the amount of social rented housing units to be built in the future. Shelter has urged that for some considerable time and I am pleased that the Committee endorsed it. I know how passionately my hon. Friend the Minister feels about it and she has rightly said that it will be considered during the comprehensive spending review. I have no doubt that she will make her points during that review and it is important that the message is also sent—from, I hope, both sides of the Chamber—that we wish to see a step change in the good work that is already being done by the Government.
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