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17 Jan 2007 : Column 283WHcontinued
Hugh Bayley (City of York) (Lab): I congratulate my hon. Friend the Member for Bolton, South-East (Dr. Iddon) on securing this important debate. York is one of the house price hot spots in the north of England. Seven years ago, in 2000, the average price of a house in my constituency was £80,000, which was lower than the national average. By last year, it had risen to £185,000, which is considerably higher than the national average.
The fastest price rises have been in lower priced housingthe sort of housing that first-time buyers aspire to buy. Overall, in that six-year period, house prices in York rose by 131 per cent., but the prices of the cheaper houses in the lowest quartile rose by 191 per cent. In other words, for first-time buyers the cost of a house in York virtually trebled in six years. What kind of first-time buyer can afford a home costing £131,000? Assuming that they put down a 5 per cent. deposit and obtained a mortgage of three and a half times their salary, they would need to earn £36,000 a year. Half of all residents in York in full-time employment earn less than £22,620. They would need to borrow six times their salary to buy, which is beyond them. That means that half of working households in York are unable to buy a home in their city.
There is an acute shortage of affordable family housing. Some 61 per cent. of the new homes built in York in 2003-04 were flats, because of the Governments preference for developing brownfield sites. That compares with the 41 per cent. of new homes nationally that are flats. The following year, 75 per cent. of new homes in York were flats. The problem is sharply illustrated by council house sales under the right to buy. In the seven years from 1997 to 2004-05, 1,140 homes in York were sold under the right-to-buy scheme, 88 per cent. of which were family homes. An almost equivalent number of affordable social housing homes were built in the same period, but 70 per cent. of them were flats.
There is a need for changes in policy by national Government at a regional level and by York city councilfirst, in relation to planning gain. Since 1998, section 106 agreements have provided 600 affordable homes in York on 33 sites. The council sought for 25 per cent. of the homes that were built to be affordable homes and achieved 22 per cent. Two years ago, it increased the percentage of affordable homes that it would expect in larger developments to 50 per cent. I support that bold decision, but it has nevertheless dramatically slowed the number of planning applications coming from developers. The council needs some help from the Government.
The Government should consider taxing banked land in house price hot spots and increasing social housing grant to enable housing associations to partner private developers in areas of great housing need.
There are two major greenfield developments in York at Derwenthorpe and Germany Beck, where planning applications have been called in, which need to be determined one way or the other as soon as possible. Either the development should go ahead and start to provide much-needed housing, or the councils mind should be refocused on the need to identify alternative sites. The Government office recognises Yorks achievements in redeveloping brownfield sites, but it needs to agree on the necessity of greenfield development for family housing in York, as in a number of areas in south-east England.
On the right to buy, I would like the Government to relax the rule that allows councils to spend only 25 per cent. of their receipts on alternative housing investment. I would also like them to impose restrictions on the right to buy in York, as they have done in some local authority areas in the south-east. The Government office for Yorkshire and the Humber should be asked to review all the Governments landholdings in York, such as those held by the Ministry of Defence, other Government Departments and the national health service, to identify land that could be released for affordable housing.
I welcome the Chancellors commitment in the 2007 comprehensive spending review to increase the supply of social housing. There is a pilot homebuy-plus initiative in the York-Harrogate-north-east Leeds so-called golden triangle of house price hot spots. Some £7 million is being invested in that over five years, but that will not produce a significant number of homes. Of course, it is a pilot scheme, but I would like to see a move from the pilot to mainstream provision of homebuy-plus as soon as possible.
The council needs to cut its re-let times. When the Labour party controlled the council, it got the average re-let time for council housing down to two weeks, but that has crept back up to five or six weeks. The council should address that urgently.
I would like the council to provide realistic incentives for tenants to trade down from family-sized homes to release more family housing for rent. I would also like it to allocate a proportion of single-bedroomed properties, of which there is a considerable supply in York, to a rent-and-save scheme to enable young people who cannot afford to get on the housing ladder to build up the deposits and save the money to enable them to do so.
The council should maximise the use of sites that it controls, such as those at Lowfield, St. Barnabas and Shipton street schools, for affordable housing and not simply try to get the largest possible capital receipt from them. It should also use nomination rights with other registered social landlords to their full potential. The council has put great reliance on the so-called tear-drop sitea larger former railway land site next to York stationbut it should not put all its eggs in one basket and overdevelop that site.
Ian Stewart (Eccles) (Lab):
Thank you, Mr. Cummings, for the opportunity to participate in this long overdue debate about affordable housing. It is incumbent on all
parties in the House to raise the profile of this important issue, and I therefore congratulate my good friend the hon. Member for Bolton, South-East (Dr. Iddon) and his colleagues on securing the debate.
We should make no apologies for wanting to speak for longer than our allocated times, Mr. Cummings, because the issue is that important. My hon. Friend the Member for Bolton, South-East set out the requirements of an affordable housing strategy for the north-west, and I wholeheartedly agree with his analysis. I shall therefore concentrate my remarks, in the time allocated to me, on my local authority area. In Salford, we have been aware of the rising problem of affordability for some time. In a city with fantastic economic growth potential, it is vital to have high quality affordable housing if we are to maintain sustainable communities.
The lack of affordable housing has major consequences. Households can be priced out of the market, and people can find themselves living in unacceptable accommodation. Historically, areas such as Salford were perceived as not having an affordable housing problem, because we have traditionally had a plentiful supply of low-cost housing for rent and sale due to the high volume of low-cost terraced housing and council-owned homes. However, housing markets have changed significantly in a short period. During detailed research for Salfords latest housing strategy, it was noted that some areas in the city were beginning to suffer from the problem of affordability. That prompted the need for further research to understand the demand for affordable housing in Salford.
Using three times household income as a measure of affordability, analysis by Salford city council demonstrates that few areas in the city are affordable for the average household. That indicates a growing need to provide new homes at an affordable price and new financial products to help households access existing or new housing. In Salford, housing needs calculations demonstrate the need for the local authority or a registered social landlord to provide an additional 320 rented homes a year.
The numbers on Salfords waiting list for affordable social housing rose from 8,000 in 2003 to 12,000 in 2006a significant increase of 33 per cent. In the Manchester-Salford pathfinder area, the average price of properties increased by 36 per cent. between June 2003 and June 2005. Sales of properties priced below £10,000 dropped from 366 in 2000 to just 23 in 2004. In the same period, sales of properties priced at less than £50,000 dropped from 965 to 521. That indicates that there has been a huge reduction in the availability of affordable properties in the housing market renewal area, in which the average household income is £19,500 per annum.
On a positive note, the market renewal programme in Salford and Manchester is helping us to make real inroads into this growing problem, and there are some significant developments in Higher and Lower Broughton in the city. In my constituency, however, mean house prices rose by between 20 and 27 per cent. between 2003 and 2004. The average house price in the Eccles ward, for example, was £145,000 in 2004, when the average household income was £28,000. If we use three times household incomesay £84,000as the limit for an affordable mortgage, it is clear that average households cannot afford to access homes in their own neighbourhood.
Given that incomes have not kept pace with house price rises in the intervening period, that situation has got worse.
If local authorities and their partners are to combat the problem, they must have the certainty that they will receive funding to clear redundant housing and provide new housing. That is why it is important that cities such as Salford, where great progress is being made in transforming housing, have the confidence that central Government will continue to provide support for housing investment. I therefore call on the Minister to provide certainty that the highly successful market renewal programme will continue, allowing councils such as Salford and Manchester to continue regenerating housing markets. We must use the comprehensive spending review to give local housing authorities and market renewal pathfinders certainty about long-term financial planning so that they can make provision for affordable housing. We must ensure that housing investment resources for local authorities are effectively targeted at providing sufficient affordable housing of a decent quality to meet current and planned economic growth.
In conclusion, the widespread perception in the north-west is that there is a serious lack of understanding in Westminster and Whitehall of the problems that we face, and we would welcome any ministerial visit to Salford to see those problems first hand.
Dr. Roberta Blackman-Woods (City of Durham) (Lab): I congratulate my hon. Friend the Member for Bolton, South-East (Dr. Iddon) on securing this important debate. At a meeting that was held in my constituency in September to look at the Durham visioning exercise, several local residents mentioned the lack of balance in our communities. In the city centre, student housing has crowded out family housing, and there is simply no affordable housing. What social rented housing was available there was sold off under the right-to-buy scheme and then sold on to student landlords. In recent years, most affordable housing has been made available through low-cost home ownership equity share schemes built in the Durham villages, but little housing has been built under those schemes either. In 10 years, only 500 affordable housing units have been delivered in Durham, which now means that a two-bedroomed terraced house in the city centre can sell for £185,000 or more.
The residential strategy in the recent visioning exercise, which has been led by Liberal Democrat Durham city council, makes no mention whatever of affordable housing or of how to deliver it in the city centre or elsewhere. The councils only housing strategy seems to be to sell off as much land as possible in the city centre and elsewhere to the highest bidder and to deliver luxury apartment dwellings. That policy has been heavily criticised not only by me, but by local residents and, recently, by a local planning inspector. We had managed to get some inappropriate luxury apartments called in, and the planning inspector refused them. His report backed what several of us had been saying locally, which was that the application of section 106 agreements was the only tool the city council had given itself to deliver any affordable housing. That approach was set out in policy H12 of the local plan that was adopted in 2004. As it happened, however, the Liberal Democrat council had never adopted
or applied policy H12, so no section 106 agreements were applied to the delivery of affordable housing. That was picked up in the inspectors report, which not only criticised the council for not applying policy H12, but made the important point that it had delivered only about 30 social housing units a year and that the district therefore now requires 503 new affordable houses each year just to deal with the backlog.
Interestingly, following all that pressure, the council adopted policy H12 a couple of weeks ago, so I suppose that that is an advance. However, we now have an additional problem in that the regional spatial strategy will not allow Durham to build enough houses each year between now and 2021 to deliver the necessary social housing using policy H12 or other means. I therefore ask the Minister to look again at what the regional spatial strategy says about housing and affordable housing in Durham and, indeed, the north generally. Paragraph 377 of the strategy recognises the need for affordable housing in the region, but then appears to prevent us from delivering it.
I know that time is short, so I shall just say what I think needs to happen. Obviously, we need to have policy H12 not only adopted, but implemented and reflected in the new local development framework for Durham, which, again, makes little mention of affordable housing. The visioning document for Durham also needs to reflect policy H12. We need additional social rented housing and low-cost home ownership, in not only the Durham villages, but the city centre. We and officials in the Department need to think imaginatively about how we turn surplus student housing in the city centre back into family and affordable housing. A group of us in Parliament are thinking about that issue, too, and we need a dialogue. Finally, I welcome planning policy statement 3, and it is really helpful that it talks about family housing and sustainable communities, but we need the tools to deliver those .
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I welcome the debate, which was secured by my hon. Friend the Member for Bolton, South-East (Dr. Iddon), because it clearly indicates that the shortage of houses to rent is a chronic problem in the north as well as the south, and that is the message that we must get across. As has been said, the Government were right to give priority to moving the decent homes programme forward in 1997 and to dealing with a chronic backlog of work, which had led to the disrepair and lack of improvement in our houses. At the end of the 1990s, the authority in Sheffield could not let homes in parts of the city; they were standing empty and had to be demolished. Since then, things have changed simply because house prices in Sheffield have trebled. The average house price is now £140,000double what someone on average earnings in the city can pay for a mortgage. Therefore, people have increasingly turned to social renting as the only option. Unfortunately, that option is often not available for families in housing need. My hon. Friend the Minister will be only too well aware of the chronic housing shortage problems in the south of Sheffield, in particular.
As a member of the Select Committee on Communities and Local Government, I endorsed the national target figures of 200,000 new homes a year and Shelters target of 20,000 extra homes for social renting. As I hear more evidence, however, I am led to believe that those targets may be too modest and that even if we were to achieve them we would not deal with the total housing need.
As to the comments about planning policy statement 3, I recognise the Governments desire to make it easier, and in some cases to try to encourage local authorities, to grant permissions for house building. My only concern about that would be that I should not want to take off the pressure to build the majority of houses on brownfield sites. That has been a successful policy, and is certainly working in Sheffield. I should not want us to revert to more building on greenfield sites when brownfield sites are available. I welcome the fact that the Government are aiming, across the board, for more commonality of approach to section 106 of the Town and Country Planning Act 1990. Some authorities use that well to bring about the building of affordable homes to rent; other authorities hardly use it at all. Certainly, we want more to be done by such authorities.
To focus on local issues in the Yorkshire region, the other day I obtained some figures about 2004-05, the last year for which figures are available, which showed that there were 10 times as many people on housing waiting lists as there were lettings in the region. An even more frightening figure, in some ways, was that for every five houses that were let, two were sold under the right to buy. There is a serious need to deal with that issue, because even if we begin a modest increase in house buildingthrough registered social landlords, local authorities or arms-length management organisationsif all that happens is that more are sold off at the end of the process, we shall not tackle the problems of housing need. The Government should think seriously about reducing the discounts in areas of housing need in the north as well as the south, as happened a few years ago. In 2004-05, when, in Yorkshire, there were 10,000 instances of the right to buy, only 270 new homes were built by registered social landlords; none, of course, was built by local authorities or ALMOs.
ALMOs are the major housing provider in Sheffield now. More than 40,000 homes are owned by Sheffield Homes. It is a three-starexcellentALMO, and has received that credit two years running. It is a good manager of properties and we should ensure that the good managers are the ones that build, when we finally get round to allowing building in the social rented sector. It let 4,400 houses, or rather homes, in the past year. It was a slip of the tongue when I said houses because two thirds of the properties that it lets are flats and maisonettes. There is a chronic shortage of family housing, which is the type that is being sold off, by and large. The problem is not just total numbers, but property type. For some of the family homes there were more than 100 bidders in the choice-based lettings programme for properties that became available. Sheffields ALMO wants to build 400 new homes a year, but even that would not replace the homes that are leaving the system under the right to buy. It would not even allow property availability to stand still; but it would be a start.
There are real obstacles. There are problems because of the perversity of the housing revenue account, which means that the ALMO and the local authority lose subsidy together if they build new homes. That is a crazy situation, which we must address. The Government have launched six pilots nationally, one of which is in Sheffield, to consider how that can be resolved. ALMOs have no asset base against which to borrow, and that is a problem when they are minded to try prudential borrowing to raise capital to build new homes. They also have very short-term financial arrangements, under which they do not know from one year to the next what their subsidy position will be, unlike registered social landlords, which can plan much further into the future. Of course they are also on a short-term contract with the council, which means that they cannot plan properly.
I believe that ALMOs have a major role to play in the future in building and providing extra new homes to rent. I am pleased that Sheffield city council and Sheffield Homes are working through the problems. I am also pleased that officials of the Department for Communities and Local Government are engaged in that. Ministers have said that they believe in principle that ALMOs should be able to build new homes. I hope that that principle will be turned into practical achievement before too long.
Tony Lloyd (Manchester, Central) (Lab): As other hon. Members have done, I congratulate my hon. Friend the Member for Bolton, South-East (Dr. Iddon) on securing the debate, which is a vital one. I want also to say a word of congratulation to the Governmentalthough I have other kind words to say about themas the housing issue clearly affects only Labour areas, to judge by the absence of Conservative and Liberal Democrat Members taking part in the debate. The fact that only Labour Members are here for the debate, apart from the other parties Front-Bench spokesmen, is a sad indictment.
The reality in areas such as the city of Manchester is that in some ways we are the victim of the Governments great success. In parts of my present constituency, which I took on at the 1997 general election, there were For Sale signs all over the place; houses were in an awful state and people were literally abandoning them. Whole streets were being demolished, unofficially, long before the bulldozers came in. Property prices had dropped so far through the floor that it was possible to obtain a terraced house for as little as £1,000. People wanted to give them away. That will be something familiar to some of my northern and midlands colleagues.
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