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I have not yet bent the ear of my right hon. Friend the Minister about affordable housing in the Islington context, but I warn her that I will. In Islington, it is simply not affordable to buy, nor is it affordable to part-buy. Hybrid forms of key worker housing may work in Darlington and in other parts of Britain, but, in the Islington context, house prices are so high that
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buying part of a flat and renting the rest is unaffordable, particularly for a family that needs three bedrooms. The price is simply too high.

I had one case of a firefighter and his wife, a nurse, who was training to be a midwife, with had three children. They lived on the Finsbury estate in a two-bedroomed flat and were overcrowded, so they wanted to go for key worker housing or part-ownership. My senior caseworker and I spent a great deal of time trying to find some alternative means for them to stay in Islington, whether through part-ownership, key worker housing or anything else. We spent many months doing that and we looked at all the different solutions, but nothing was affordable within their pay range. The only thing for them to do, as we were advised, was to apply for part-ownership out east, which they would be able to do when the woman finally qualified as a midwife. I cannot even remember where the place was, but it was somewhere east of Tower Hamlets; I am afraid I get a little foggy once we get to the other side of town. That was the only accommodation that would be affordable for them as a family.

The point is that key worker accommodation may be affordable if people only want a one-bedroomed flat. A new teacher trying to get key worker accommodation in Islington may be able to buy part of a one-bedroomed flat, but that is not possible for a key worker with a family. That is our problem. That is why inner London is lobbying for social rented housing; nothing else works for us.

The difficulty is that, within the Islington context, a two-bedroomed flat in social rented housing might cost some £75 a week. So of course some of my constituents can move into private rented accommodation—indeed, such private accommodation has become increasingly available, not least because housing benefit will pay up to £300 a week. However, the private sector is charging £300 a week for rented accommodation and the rent in the social rented sector costs £75 a week and the Government are paying for them both. This is wrong and we have to find a solution to it.

One would hope that, with the credit crunch, perhaps the poorer half of Islington might benefit at last, in that land prices will go down and many builders will be out of work and, when all else fails—when the markets fail and businesses fail—in the end, all that we have is government. In those circumstances, perhaps the Government will be able to step in and, perhaps, having had 10 years of boom in the private sector and with a downturn in the market, now might be the public sector’s chance, and the chance for the poorer half of my constituency to get some new accommodation. If that is so, those girls who are stuck with their little sisters might, at some time, get a chance to move somewhere else.

Unfortunately, it is never as simple as it looks. The more I look, the more I realise that this difficulty has to be managed carefully. One of the most important sources of new build is housing associations. I understand that, in the early 1990s, grant rates for housing associations to build were at 70 per cent. That grant rate has now gone down to about 40 per cent. The difficulty is that, in those circumstances, that is not now a viable business proposition for housing associations, without cross-subsidies from other sources, including, as I understand it, building other flats and selling off parts of a development or
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selling off part-ownership and, therefore, being able to subsidise developments. Every new home being built by housing associations is subsidised, I am told, to the tune of £25,000 a flat.

When it comes to the larger homes that my constituents so desperately need—the three-bedroomed plus homes—the price is even greater and the problem then is that, if housing associations are asked to deliver a certain number of units, it is often far too easy for the larger units to be overlooked. If one four-bedroomed flat is provided, it provides accommodation not just for one family, but for the family below in the chain: so a family may move out of a two-bedroomed flat into a four-bedroomed flat, freeing up the two-bed one; then the two-bed is freed up, so the family from the one-bed can move into the two-bed; then the girl with her baby in a bedsit can move into the one-bed; and so it goes on. Building larger accommodation means providing accommodation all the way down the chain. That is why it is so important that, in terms of policy, we emphasise and prioritise the building of larger flats to give families a chance.

The difficulty is that the cross-subsidisation that the housing associations have been getting from selling off other properties is now drying up because of the credit crunch. I am informed that at the moment the housing associations have a debt of some £51 billion and it is anticipated that they will increase that borrowing by another £12 billion to deliver the Government’s affordable housing targets. Unless this is managed carefully, the sector’s financial health could be a cause of great concern.

Many things can be done to assist housing associations. We have to use more public land and we have to stop the selling off of public land to the highest bidder. We have to begin with a policy whereby if public land has to be sold, it should not be sold to the highest bidder but should be sold for the greatest public good. That principle could be established.

Moorfields school in my constituency is a large plot of land that stands next to Braithewaite house, a successful block of flats used by families, on one side of the road, while round the back a new development at Old street is potentially coming. That development is to be a massive great tower block largely comprising luxury flats: the 50 per cent. rule does not seem to apply to Islington council. That large plot of land in between those sites could be used for social rented housing and for some of the 13,000 families desperately waiting for housing in Islington.

I have been mentioning 13,000 families since I was elected. I was surprised that so few families were being added to the list until families came to see me—and I know they go to see my hon. Friend the hon. Member for Islington, North—and complained that it is almost impossible to get on to Islington’s waiting list these days. That is becoming such an increasing embarrassment, because my hon. Friend and I, and many other colleagues, are making a huge fuss about this large number of families on the waiting list for housing within Islington, with nothing being done about it, while the local authority is selling off Moorfields school, for example.

The local authority is also selling off a site in Elthorne street that was owned by the council; it was a factory and then became a site for many little businesses and local employers. The council sold it off for £1 million and it has recently given planning permission for that property to be made into 17 luxury flats. That publicly owned building will now never provide any housing for
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those two girls and their daughters living with their little sisters. Now that public land has gone we will never get it back; we will never have the opportunity to house families there. We must do something about this and we must stop the sell-off of public land simply for the sake of keeping the council tax down. We must prioritise. We cannot just wring our hands and say, “Oh, it’s such a terrible problem; it’s such an enormous problem. There’s nothing we can do.” We have to do something about this and we must ensure that there is somewhere for these 13,000 families to go.

The first issue to consider is the sell-off of land. Public land should be prioritised and used. There may be opportunities available for us to work in partnership with housing associations to build more social rented housing, particularly given that the subsidy that the housing associations have been able to provide so far may be weakening with the increasing credit crunch.

On other sources, housing associations could be allowed to buy land that may be owned privately but is not being built on, whether due to developers not having the wherewithal, means or imagination to build on such sites. The Government might be able imaginatively to change the rules so that, in such circumstances, housing associations could step in. Or they could step in where planning permission has been given but little progress has made on a site and, rather than wasting that land—given how many people are in desperate need of rented accommodation—allow housing associations to step in at that early stage.

There are other opportunities available, when developments have begun and have gone a long way down the line. Again, it may be possible for housing associations to step in at that point, but there are two difficulties in relation to that. First, I am glad to learn that the environmental standards we expect for social rented housing are higher than for private rented housing.

A housing association cannot simply buy flats that have been built for the private sector, because they may not be good enough—the environmental standards may not be good enough, and the rooms are often too small. We manage the size of social rented flats, but we do not manage the size of private rented flats. Those are complications, but with careful management, it should be possible to fix part of the problem, and ensure that the downturn in the market does not mean ever-increasing numbers of people in desperate need of social rented housing.

It has been suggested that housing associations may be able to step into the gap that will be created by the credit crunch, but that alone would not be sufficient, even with the whole £20 billion that has been earmarked for the building of affordable housing in the next three years. It would only shore up one in 10 of new buys yearly. That is not enough on its own, but if we had a goal of ensuring that we relieve some of the pressure in the social rented sector by being imaginative and giving housing associations a greater lease, allowing them to do more than they can at the moment, and by taking a realistic look at the effect of the credit crunch, and accepting that they will not be able to subsidise things in the same way as they have in the past, we may be able to go some way towards assisting some of my more desperate constituents.

In the past 10 years, only one in seven new developments in Islington has been social rented housing. That is not fair, and I hope that in the next 10 years we will be able
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to increase the amount of social rented housing in my constituency. Half of my constituents are largely my people, and when I go round social housing and talk to them, they look to me and Labour MPs such as me to provide a solution. I hope that with the downturn in the market we may be able to think laterally, and give them some help.

3.52 pm

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): As a member of the Select Committee, I welcome the report, and agree with it. As has been said, we took an awful lot of evidence and made many visits throughout the country to ensure that the report was factually based on people’s experience in their daily lives and the struggle that many of them have in achieving their goal of becoming a tenant with affordable, social housing. As my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry) said, the problem is more acute in London than elsewhere, but that does not mean that it is not acute elsewhere. Certainly, in Sheffield, the change over the years in the shortage of available rented housing is only too obvious for anyone to see, particularly Members of Parliament at their surgeries. I agree with my hon. Friend that one’s heart almost sinks when someone comes in with a housing problem, because one simply does not know where to begin to help them, and often cannot do so because they are one of a number of people in real need trying to access an increasingly short supply of rented housing.

The Committee rightly agreed with the overall target of building 3 million new homes by 2020, and increasing the number of social rented homes that are built each year to 50,000. Eventually, we may have to increase those figures further, but they seem to be a good starting point in support of the Government’s targets. The hon. Member for Chesterfield (Paul Holmes) commented on the shortage of available property in his constituency. I asked Sheffield Homes, the ALMO that covers most of the rented stock in my constituency, to provide some figures for last year. I asked for the figures for three-bedroomed family houses because, as a result of the right to buy, there is a disproportionate number of flats compared with houses in the housing stock, because, by and large, the houses have been sold. The figures, which excluded allocations to homeless families and people whose homes had been demolished—there is a demolition programme in south Sheffield for system-built properties from the 1970s which are no longer fit for purpose—showed that there were only three allocations from the waiting list to people wanting three-bedroomed family homes in the whole of my constituency last year. I receive more requests for help from people wanting such accommodation in a month than is available in a year, and I accept that I see only the tip of the iceberg.

It is right for the Government to respond to the current housing pressures, which came after the report was produced. Part of the £2 billion package of help for the housing market may be used by councils to buy vacant property in the private sector for social letting, or to start building new homes. The Government must quickly rethink that package, welcome as it was, because, as we have heard, there is evidence that some housing associations are having problems in getting their schemes under way for the simple reason that they rely on
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packages of funding, some of which are used to build houses for sale. That helps to cross-subsidise rented properties. As the value of houses for sale has fallen—and selling them may be a problem—they will find it difficult to raise funding to get those packages away. Some of them are having problems because of the lack of funds in the wholesale market anyway. At the same time, private sector schemes throughout the country are not starting—work has stopped on schemes in the Darnall area of my constituency—and if they have section 106 agreements, the houses covered by those agreements will not be built either. It is likely that there will be a fall in the number of housing association properties being built, and the Government must address the issue urgently.

It is right that housing associations and local authorities should be able to access money through the package to build more homes, but if fewer homes are being built under other financial arrangements, the Government may have to step in quickly and increase the available funding. The enormous pressures on social housing that we are already experiencing, and the fact that many people who wanted to buy in the private sector as first-time buyers cannot now access mortgages because of the requirement for larger deposits, produce additional pressure, because tenants cannot move out of social housing and owner-occupiers who want to move into social housing cannot do so because the option of owner-occupation has been postponed, at least for the time being.

The Government must ask local authorities what they are doing to access funds that have been made available. Many local authorities do not recognise the need, or they lack the systems, to buy up empty properties, which is a fairly quick way of providing extra social housing. I do not see much evidence of local authorities getting their act into gear to access funding for that purpose, or stimulating their ALMOs or housing associations to do so. It will be interesting to hear whether my right hon. Friend the Minister has any figures to show how much of that money has been spent on the purchase of vacant properties.

Grant Shapps (Welwyn Hatfield) (Con): Has the hon. Gentleman heard, as I have, discussions among registered social landlords about the fact that it is almost impossible for anyone to get their hands on the money to make those purchases?

Mr. Betts: I have not been told that by an RSL, but it would be interesting to know how much money has been allocated and whether the Minister is aware of any problems in accessing it. I am sure that it is not the Government’s intention that it should sit in the Treasury’s coffers, but if there are obstacles, they should be dealt with quickly. It would be a disaster if properties were empty and families were without adequate housing, and we could not put the two together when the money was available.

Section 106 funding will continue to provide a lot of social rented housing. I have been critical of my council in Sheffield for being far too slow in changing its planning policies to reflect the need for section 106 agreements to provide social rented housing as part of new private sector housing developments. The horrible irony is that just as the council changed its policies to require a greater percentage of social housing on private developments, the credit crunch came along and builders stopped building new private houses. That is sad.


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The Government should recognise that in the longer term, when the housing market is back in gear, section 106 agreements will provide quite a lot of social housing. They should say to local authorities, “Do you, as part of your planning policies, have section 106 agreements clearly labelled as something you intend to use when you give planning permission for private houses?” How can good practice be exchanged between one local authority and another? One thing about Section 106 agreements is absolutely obvious, and when we went around the country and collected evidence it was there for everyone to see. There is an enormous disparity in local authorities’ achievements and policies on section106 agreements.

Emily Thornberry: Is it not also the case that, in London, if the 50 per cent. rule that was introduced under the previous Administration at City Hall is abandoned, one local authority will be played off against another? The only way to have the 50 per cent. rule across the whole of London is for all of London to agree to it. Ken Livingstone’s target has been abandoned, which is a great shame.

Mr. Betts: I agree. Without knowing all the details of what has happened in London, I can see the obvious problems. If there are competing housing policies in different London boroughs, there will never be an overall strategy for London as a whole.

Jeremy Corbyn: On the point about section 106 money, in its investigations, did the Committee come across much evidence of unspent section 106 money that simply sits in local authority coffers for years doing nothing? Worse, did the Committee find instances in which developers sold on, and sold themselves out of, a section 106 requirement, thus preventing the public from benefiting from what should be a social benefit?

Mr. Betts: I have certainly seen figures from the Department in the past that show there is some disparity between the section 106 agreements that are reached and the number of houses that are eventually built. Again, that is something Ministers may wish to look at.

I shall make two other points about section 106. There is still nervousness about the effect of the community infrastructure levy on section 106 agreements for social housing. I support the community infrastructure levy, as it is right to have a policy that ensures that the public purse benefits from the private gain from planning permissions. We have received assurances from Ministers about the interaction between section 106 agreements for social housing and CIL, but we still seek reassurances that there will not be any adverse effects.


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