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In the light of todays announcement of the bank rescue package, what progress have the Government made to provide a rescue package for those at the bottom of the housing ladder, who are suffering most from the impact of the credit crunch and the current financial instability? I ask that question, bearing in mind that just the other day, there were 50 repossessions in court in Penzance, as reported in the papers. Apart from the Bank of Englands special liquidity scheme,
which was announced in April, the Government have clearly indicated a desire to act. I congratulate them on announcing initiatives, but it is a question of applying them. I am talking about the rent-to-buy pilot, the new shared equity and mortgage rescue schemes, financial advice and assistance, extra money for registered social landlords, purchase schemes of private, developer-led developments that cannot proceed for whatever reason, and the housing private financing initiative.
Other organisations have made proposals. The National Housing Federation has proposed that housing associations develop their own mortgage rescue packages to assist those who face difficulties, and the purchase of unstarted, started and complete private developments. Shelter has proposed better information and advice provision for those who are in arrears and face repossession. It also said that the Government and the Financial Services Authority needs to be tougher on irresponsible lenders who are all too ready to take repossession action; needs to regulate private mortgage rescue sale and leaseback schemes; and introduce a pre-action protocol for mortgage arrears in court to ensure that repossession is a measure of last resort; and look again at income support for mortgage interest.
Matthew Taylor (Truro and St. Austell) (LD): The financial crisis has, of course, made home buying less affordable, because deposit requirements have gone up as, effectively, have interest rates, particularly for first-time buyers, notwithstanding todays announcement. The new Homes and Communities Agency will have substantial funds, but it has a huge job in delivering the Governments affordable homes targets because of the fall in private sector development. There may also be packages in urban areas, not least in the north, for the Government to deal with surplus buy-to-let developments. I hope that the Minister and my hon. Friend agree that it is important that the agency has a clear brief to continue the work that it has been developing on smaller rural communities, particularly villages. They may not be an obvious priority in the current circumstances, but they have experienced some of the sharpest affordability problems.
Andrew George: I entirely endorse my hon. Friends remarks, and I commend his report, which was published at the beginning of the recess and is entitled, Living Working Countryside. The Minister is aware of it, and I look forward to the Governments response.
I hope that the Minister feels unconstrained, or at least less constrained than he was in yesterdays debate, when he responds. Reasonable questions have been asked about the impact of the RSS on the ability of local authorities and others to respond to the desperate need to provide affordable housing, rather than allowing the planning system to fuel a developers paradise, which it has done in the past. We should look at extending help to the most vulnerable people and families in these hard times.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright):
I congratulate the hon. Member for St. Ives (Andrew George) on securing this important debate on affordable housing and planning. In the debate on 25 June on
planning and housing estimates, which he mentioned, I paid tribute to his expertise, professionalism, knowledge and insight on housing matters. I should like to reiterate those sentiments todayI have not changed my mindand say how much I welcome this timely debate on affordable housing and planning. The emphasis has been almost exclusively on rural housing, rightly, because the hon. Members who have spoken represent rural constituencies.
I should like to provide some context and remind the Chamber what the Government have already done to help to provide affordable housing in rural areas. Since 1997, more than 71,000 affordable houses have been provided in rural areas. Between 2006 and 2008, the Housing Corporation was able to deliver almost 7,500 homes in settlements of fewer than 10,000 people, of which almost 5,500 were homes in settlements of fewer than 3,000 people. We have provided in planning policy statement 3, on housing, for local authorities to develop rural exception sites so that affordable housing can be built on land that would not otherwise be available. We have also set the corporation a challenging national target to deliver at least 10,300 properties in small rural communities in this spending review period.
The hon. Gentleman made a number of points in his excellent speech, and I am keen to address them. In many ways, he reiterated the points that were made in yesterdays debate on the regional spatial strategy for the south-west, but he also advanced them. He asked me to be less constrained than I was in that debate, but I am a risk-adverse individual, and the age of irresponsibility is at an end. I do not intend to shoot from the hip. I reiterate what I said yesterday and on a number of other occasions: the Secretary of State has a quasi-judicial role in the process, and I do not want to do anything that would compromise her ability to make a free decision. I do not want to be subject to any kind of judicial review. All that I say is that in debates today, yesterday and on several other occasions, hon. Members have been able to raise points that they and their constituents wished to have raised, and that is welcome.
The hon. Gentleman mentioned affordability and protection for more vulnerable households, and I welcome his comments on that. I wish to mention at length the package of measures that we announced on 2 September, because this is probably the first opportunity that hon. Members have had to discuss it. The hon. Gentleman showed in his speech that he is very much aware of the state of the UK housing market. It is going through a sharp adjustment, triggered largely by the global credit crisis. People are finding it extremely hard, if not impossible, to get mortgages, house prices have fallen and house builders are experiencing extremely difficult trading conditions after years of favourable circumstances.
On delivering affordable housing, we are aware that housing associations are facing problems in accessing credit at competitive rates and that their business models, by which houses for sale at market value help to subsidise properties for social rent, are under severe strain because of the lack of mortgage finance. Purchasers of our low-cost home ownership products are facing similar problems in obtaining mortgages or raising a sufficient deposit.
At the heart of our announcements on 2 September was pulling those factors together by helping first-time buyers on to the property ladder, trying to minimise the risk of repossession and increasing and enhancing the
supply of social housing. They built on a number of measures that had been taken in July and earlier to help families adjust to the current tough state of the housing market. The new package will help those most in need, and I shall explain the impact that it will have on affordable housing.
First, the package will provide up to 10,000 more first-time buyers who are currently frozen out of the mortgage market with the chance to get on to the property ladder through a new shared equity scheme in a new partnership with housing developers. I know that the hon. Gentleman is interested in rent-to-buy models, and we will run a pilot rent to homebuy scheme on certain sites from 2009 to allow households to benefit from below-market rent for two to three years while they save for a deposit. After that, they will have the option of buying a share of the property.
The package also included a one-year stamp duty holiday on all houses costing up to £175,000, meaning that about 50 per cent. of all house purchases will be exempt. We are also providing more support for social rented homes by bringing forward £400 million of Government spending to deliver up to 5,500 new social rented homes at good prices in the next 18 months.
We are supporting house builders and the housing sector by adding to the £66 million already allocated, so that a total of at least £200 million will be available to buy unsold property from house builders, principally for use as social rented housing. The Government also announced new support measures to help vulnerable house owners meet their mortgage interest payments. The Department for Work and Pensions announced that it would reform support for mortgage interest by shortening from 39 weeks to 13 weeks the waiting period before it is paid for new working-age claims from April 2009. The capital limit for new working-age claims will also be increased to £175,000 from that date. A further £100 million investment will be provided to support SMI reform, which we estimate could help to prevent 10,000 repossessions.
Andrew George: Bearing in mind that this is a debating Chamber, and not one for posting information, I have raised issues that are worthy of debate in a debating Chamber. With the greatest respect to the MinisterI admire him equally, so there is mutual admiration going onI suggest that he could send me a written note of the information that he is reading out about the package of measures that both he and I have mentioned. I would be happy to get that helpful information, but can we debate some of the issues around the regional spatial strategy itself, such as the relevance and impact of trend-based projections and the relevance of applying the RSS differently to the Isles of Scilly and the mainland? It is better for us to tease out such issues in debate here and now than for the Minister, if he does not mind my saying so, to give me information that I would be quite happy to receive in the post.
I respect the hon. Gentlemans wishes, and I am more than happy to help in that regard. I was trying to set out the details of that important package of measures, because the House was in recess when it was announced. Some £1 billion of public money is being provided to help support the wider housing market, particularly vulnerable householders who face the risk
of not being able to get on to the property ladder or of repossession. The hon. Gentleman mentioned the importance of parliamentary scrutiny in both yesterdays and todays debates, and I was keen to mention those matters for the first time since we returned from recess. However, I take on board his point, and I am keen to move on.
If I may, I should like to talk at length about the important matter of affordable housing and planning estimates, particularly in a rural context. I am very pleased that the hon. Member for Truro and St. Austell (Matthew Taylor) is in his place because, as has been mentioned, he has provided an excellent report. The Prime Minister asked him to look into the issue, and I shall quote from his original terms of reference, although I am sure that he does not need me to reiterate them. [Interruption.] I will be giving a test later on. He was asked to examine
the application of land use planning to facilitate the provision of land for greater economic and social sustainability within rural communities, including land for enterprise and the provision of affordable rural homes.
The report was published in July. The crucial point that I have taken from it is that the best way to see our rural communities thrive is to invest in the wider issue of rural economies and communities, both by supporting jobs and through affordable housing.
To take the matter to another level, the concept of the sub-national review is to bring together the regional economic strategy, which is about the economic development of an area, and the regional spatial strategy, which discusses planning, housing numbers and a whole range of spatial issues, into an integrated regional strategy. That is key, and it is a bit of a no-brainer in some respects, because it is so important. I reiterate that I took from the hon. Gentlemans report the idea that we cannot only talk about affordable housing, and that how to sustain that housing with a vibrant economy is key.
I shall address directly the hon. Gentlemans point about the role of the Homes and Communities Agency. I hope that he welcomes the agency, as it will be valuable in driving forward a range of matters on affordable housing, the regeneration of communities, sustainable development and improvements in design principles. This morning, I addressed a rural housing conference called Investing in Rural Futures. Sir Bob Kerslake, the chief executive of the HCA, made a speech, as did I, and so did Candy Atherton. I was able to announce that Candy Atherton, who has played an enormous role in pushing forward the issue of affordable rural housing, has been appointed to the board of the Homes and Communities Agency. I hope that that reassures the hon. Gentleman and others that the agency will not be an urban-led regeneration organisation, important though that is. It will also have at the heart of its strategic direction the importance of rural communities and affordable housing.
Just before coming to the debate I spoke at the same conference, where people have been in break-out meetings during the day. Key to the points that my hon. Friend the Member for St. Ives (Andrew George) has made is the fact that, as my report reflects, there is consensus that Government leadership is needed on the issues addressed. That consensus exists among
people at the conference and elsewhere. I hope that we will have a chance to discuss those issues further and that the Government will act on the report. That was a message that came out of the conference.
I am very keen to do that. The Government are considering their response to the hon. Gentlemans report, which is going across Departments at the moment. We will hopefully be in a position to respond shortly. I take his point, and there are issues that we can sort out centrally. We have a good way of disseminating good
practice, for example. I was very much taken by his point about how to link thriving economies with the planning system, and by the point that it is easier to convert a garage into a snooker room than into an office. We want to promote enterprise, hard work and entrepreneurialism, so where is the sense in that? We need to do something about it, and that is where his report comes into its own.
Adjourned at Five oclock.