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12 Nov 2008 : Column 270WH—continued

Mr. Betts: Obviously, there will not be a review of the housing revenue accounts system in time for the Chancellor’s announcement of a package of proposals next week. We have been told that the review will take place in the
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middle of next year. I entirely agree with the hon. Gentleman. The issues that I hope will fundamentally be addressed are how rents are fixed centrally and the inability of organisations—housing associations and particularly ALMOs—to plan ahead because they do not know what the subsidy will be in the next two or three years. The problem of not being able to use capital receipts locally also needs to be dealt with. In relation to social rented housing, there is a real problem with the housing revenue account system, which is like an albatross around the neck of future development. I hope that that issue will be tackled, although I think that the reality is that we will not receive a response from the review until the middle of next year.

Other hon. Members want to contribute, so I will conclude my remarks. I have tried to indicate that there are probably no quick fixes to the current problems with buying and selling homes. One or two things could be done—for example, improving shared ownership. Future problems include a potential spike in house prices and a lack of building that will lead to a lack of training and a shortage of workers. The Government need to think about those matters. Things can be done to keep people in their homes and the Government have acted on some of them, but more can be done—for example, by co-ordinating advice locally. Money should be put into the building of houses for rent in the current market if we are to avoid a decline in those numbers at this time of great pressure.

In some ways, it is opportune that the new Homes and Communities Agency comes into being next month. The agency probably would not have picked this time to come into being, but we should strongly welcome the fact that that is happening now. The agency will be able to co-ordinate local authority action, and I know that Sir Bob Kerslake, the chief executive, believes that tackling this issue is about not central delivery, but delivery through local authorities. I certainly welcome that. I hope that the agency will have an enhanced budget to enable it to work with local authorities and housing associations to build extra homes. At a time when land prices are falling, it might well be that some of that money could initially be put into land purchase. If the public sector were to buy up land for future schemes, that would be welcome and could be done to anticipate future needs when the industry is in better health.

The agency could also consider the co-ordination of advice through local authorities and others to help people who have a particular housing need. The Homes and Communities Agency has a massive task, and it is opportune that it is about to come into being. I am certainly looking forward to hearing its proposals and seeing how it will react. I want the agency to work through local authorities, as they have a key role to play. However, in the end, neither the agency nor local authorities and housing associations will be able to deliver unless the Government step up to the mark now and provide substantial extra funding. That will not only kick-start jobs and building in the industry but ensure that we address the fundamental problem of a massive shortage of houses to rent, which, in the current circumstances, will only get worse.

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Mrs. Janet Dean (in the Chair): I believe that four Members want to speak. I intend to call the Front-Bench spokespeople at 10.30 am, so there should be ample time.

9.54 am

Paddy Tipping (Sherwood) (Lab): I am delighted to follow my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) in this important and timely debate. I agree with the third point he made: it is vital that hard-working families and people have the opportunity to get decent affordable rented housing. He is right to say that for that to happen we need to ensure that housing associations and local authorities have extra resources, so that they can tackle the job. In my area, Ashfield Homes has as many people on the waiting list as there are houses available. That is the scale of the problem.

I shall follow a different tack from my hon. Friend and talk about the housing element of the east midlands spatial strategy and the effect of the present economic crisis on that. The Minister will know that consultation on the spatial strategy finished on 17 October, but I hope that he will take my speech as a late submission. He will perhaps know that on 17 October, the East Midlands regional assembly announced a partial review of the spatial strategy—a strategy that is not yet agreed. If the planning framework is already changing and in doubt, what does that mean for long-term planning?

The central issue of the regional strategy is housing, which has been a contentious matter in Nottinghamshire. In the housing core area in Nottingham—basically, the Greater Nottingham area—the expectation is that 70,000 new houses will be built by 2026. Earlier this year, local authorities produced a sustainable urban extension study, which considered possible sites in greenfield and green belt areas. That caused widespread alarm. There is a perception in Nottingham that green belt and greenfield sites will be eaten up. Importantly, last Monday, local authorities published a second study, which has the even grander name of the strategic housing land availability assessment and which considers areas to be developed within the urban area. The current position is that roughly half the houses needed could be developed on what might be called brownfield sites in the urban area, and half on green belt and greenfield sites.

The essential question, which has already been mentioned in the debate, is, what kind of houses are to be built and where will they be placed? My anxiety arises from the fact that the market as it has operated in the past has delivered what I call executive homes: five-bedroomed homes with two cars on the drive on greenfield sites. What drives the market is the unfortunate fact that more and more families split up and require two homes instead of one; in addition, all of us are living longer. Now, instead of widespread erosion of the green belt, we need smaller, sustainable homes that are closer to town centres and have good transport links.

I am concerned that the East Midlands regional assembly now says that it intends to revise the housing estimates and that it considers the Prime Minister’s pledge to build 3 million homes by 2020 to be important. The demand to consider having more homes on greenfield and green belt sites will be irresistible. I simply say to the Minister that such houses are not needed for ordinary hard-working people. There are plenty of new flats in
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the city of Nottingham—the place is awash with flats that cannot be sold—but it is essential to have some family housing to give hope to children for their future. I want us to move forward quickly and have a planning system and a regional spatial strategy that have that principle at their core. Investment should be made in brownfield sites before greenfield.

The Government have a good record. They have exceeded their 60 per cent. target in the east midlands and have roughly achieved the figure of 75 per cent. We need more, but it will progressively become more difficult.

Mr. John Leech (Manchester, Withington) (LD): The hon. Gentleman makes some valid points. Is not one of the problems that brownfield sites often lend themselves to big developments of flats, rather than family homes? Home builders need to be more innovative in how they develop sites, so that they build family properties within a development of flats, rather than coming up with just one or two-bedroomed flats on brownfield sites and the big five-bedroomed houses on greenfield sites as the hon. Gentleman.

Paddy Tipping: The hon. Gentleman is right, and the point that he makes was pursued by my hon. Friend the Member for Sheffield, Attercliffe. We need mechanisms to ensure that the market and the way we intervene in it deliver the answer to housing need, rather than the solution that brings profit to house builders. Unfortunately, up to this point, we have not been able to achieve that.

My plea to the Minister is this. He will now receive the results of the consultation on the east midlands regional spatial strategy. I hope that he will examine closely the housing element of it and that he will make it his strong and firm policy that what is important is smaller, sustainable homes near urban areas, rather than wholesale erosion of the green belt.

There is talk of an eco-town in Nottinghamshire on the site of RAF Newton. The present proposal is, to put it in professional terms, absolutely bonkers, but RAF Newton is a site with potential—potential for a smaller community, not the large scheme planned at the moment. With imagination, good planning and good design, a scheme could be developed on that site. I hope that the Minister will assure us again that if houses are built there, they will count against the housing numbers in the regional strategy. What it is important to get from this debate, from Government policy and from the autumn statement when it comes in the next few days, is a set of measures to ensure that there is hope for people in desperate need of housing. That can be provided only through greater involvement and greater intervention by the public sector.

10.2 am

Matthew Taylor (Truro and St. Austell) (LD): I shall concentrate on specific measures that could help to resolve the problems that have been so well set out by those who have already spoken. As the Minister knows, I was asked to report to the Government on rural housing need. The report was produced in July, and I am glad to say that it received a lot of support from the Government. We now await a response. I will not go through the 48 recommendations, not least because many of them are for the longer term, but also because we do not have time to do so. I shall concentrate today on more immediate measures.

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When the report was being drawn up, we were already seeing the beginnings of the current economic problems. The background, which I discussed in the report, is that housing need does not go away because house builders are no longer building houses. The fact that people cannot get mortgages to buy and that, at a time of falling house prices, people are unwilling to buy because they think that properties might be cheaper next week than they are this, does not alter the increase in household numbers and family break-ups, the fact that people are living longer, the fact that people are more likely to want to live alone, for a variety of reasons, or the fact that people aspire to a home of their own.

All that pressure, which led the Government to their target of 3 million homes—whether it is right or wrong, we are still talking about a lot more housing need over the coming years—is not going away. What happens in a recession and what is happening now is that our ability to solve the problems and provide solutions is eroded because house builders will not build. That has a knock-on consequence, which we have heard about, for housing associations, because the majority of affordable housing being built is on the back of private sector development. A massive loss of affordable housing provision is now starting to hit because new developments are not being started and even existing developments are not being completed. At the same time, people are less able, because of rising unemployment, to afford homes, so there is greater pressure on the affordable housing sector. There is more need for affordable housing.

Dealing with the problems that I have described is difficult in the short term. In the long term, we may be creating an even bigger problem, because as we come out of the current situation and people start to be able to buy, the houses will not be there for them to buy. That may ratchet up prices and we may go back into the same cycle. I know that Ministers are aware of that.

As there is not much time, I shall run through my four suggestions as quickly as I can. The first is obvious and I know that Ministers are considering it. The more the funding programme over the current spending round can be brought forward so that, in particular, the Homes and Communities Agency and current projects can forward-spend now on affordable housing projects, the better, partly because that helps to fill the hole in planned affordable housing delivered through private sector development and partly because it is counter-cyclical spending. I think that Ministers understand that. If more money can be found, that will be even more welcome, but even in terms of the funds that have already been allocated, bringing forward spending is important. Nevertheless, it is important that people think long term and not just short term with that housing development. The measure is not just an economic solution and a fiscal stimulus; it is about the housing provision needed in the long term.

I agree with the hon. Member for Sheffield, Attercliffe (Mr. Betts) that there are an awful lot of flats in cities that cannot be sold by the private sector. However, to put it bluntly, they probably could not be sold by the private sector even if we were not in a recession, because there has been massive over-provision. Although the Government acquiring large numbers of one-bedroomed flats in the middle of cities may appear to be an easy solution, that would not meet the priority housing need of families. The last thing they need is a cheaply built
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flat in the centre of town that was not even built to affordable home standards in terms of space, with no garden and so on. We need more family homes. To divert money into bailing out the private sector to too great an extent would simply saddle the state with undesirable city-centre flats that have not been built to the standards of affordable homes, that are not as well insulated, that do not have the space and that, in the end, could provide the state with the next generation of slum housing, particularly if it is all affordable housing so that whole blocks of flats are built up. There may be room for some within it.

Mr. Betts: I take the point that the hon. Gentleman is making. We are desperately short of family houses and buying up flats in city centres would not necessarily be a solution to all the problems, but certainly I see many couples, for example, who just want a home. If they knew that the allocations policies were such that, by going into one of the flats that the local authority has bought in the city centre, they might have a chance, probably in a year or two years’ time, of moving on and they would not be pushed down the waiting list because they had accepted that flat in the first place, there might be some room for buying such flats to help some people on the list.

Matthew Taylor: There is room for buying some. I simply sound a note of caution about how far that policy is taken. There was another point in the hon. Gentleman’s comments, to which I shall return at the end, about how more flexible approaches might be taken.

It is important that the estates we build are mixed. The lessons of the past are that, in the long run, large rented estates create problems of their own, however well they may have been built in the first instance. The developments should contain both rented properties and properties that are affordable to buy. Where appropriate, it would be great to have some private sector housing in that mix, too, but that may be more problematic at the moment.

That brings me to a core point, where I think the Government have a role. There is now clear evidence that part of the squeeze on the mortgage sector is squeezing out part-buy affordable housing and, indeed, affordable housing where people buy, under a section 106 deal, the freehold but at a capped price that is affordable to local people. In both cases, there seems to be evidence that the mortgage companies, only a small number of which were willing to provide mortgages in those circumstances anyway, are in effect pulling out of providing mortgages at all. They have not announced that; the policy is not official, but it seems to be happening.

That is reflected in housing associations now being unwilling to build part-ownership properties and in part-ownership properties being transferred over to the rented sector because people are not coming forward to buy them. There are a number of housing estates in my constituency—estates being built by housing associations or in the development phase and estates that have already been built—where the part-ownership properties have been transferred over to rent because the mortgages are not available. I cannot emphasise enough to the
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Minister the fact that that is not because they are not desired or needed; it is happening because people cannot get a mortgage on them. There is a clear role for the Government in helping those individuals, which will be of both short-term and long-term benefit. In the short term it will help people to buy those properties, and in the long term it will help to ensure that estates remain mixed and have people with a range of needs and social backgrounds, rather than becoming purely more traditional tenanted estates, with some of the long-term problems that that can cause.

The Government have a role to play. Given their current interest in and talks with the banks, perhaps they will be able to put together a package that deals with mortgage availability. In addition, I remember not so long ago when councils provided mortgages. Perhaps we should think about that again for those types of property. That could be done together with lenders, and might reduce some of the risks they fear. Ironically, such properties are relatively low risk. The demand for low-cost home ownership packages remains even when the market falls. The value of those properties is unlikely to fall much, especially if it is linked to local wage levels rather than local house prices.

Thirdly, the report argues for a long-term planning process to create sustainable communities and new neighbourhoods. That should include a mix of housing, work opportunities and leisure facilities, not just estate-by-estate development. With the break in the market, more available land and a fall in the level of development, we have an opportunity to ensure that the next generation of development will create sustainable communities, community extensions and new neighbourhoods. Throughout the ’80s and ’90s we simply saw places doughnutted by estates.

Sustainable developments have the advantage of being properly planned. They involve a partnership between long-term investors and local authorities, with the result that the developments have greater stability. Of course, in a downturn that might fall back, but it will not be lost altogether as it is part of a longer-term scheme. The current fluctuation gives us the opportunity to pull into that long-term planning.

I raised this final point during a debate on the economy last week, and I would like to elaborate on it slightly now. At the moment, the Government are pushing councils to reduce the use of temporary housing. I have never been much in favour of people living in temporary housing. In my part of the world, that usually means bed and breakfast—not the sort of bed and breakfast where one might go on holiday, but houses in multiple occupation where people are kicked out during the day. Young families, people with children or single parents often do not have a base during the day, and I have always been against that kind of temporary accommodation.

The shortage of affordable housing has meant that councils have been taking long leases on private sector properties to provide what is classed as temporary accommodation, but which often provides good-quality accommodation for a year or two. The accommodation is in someone’s house, but for one reason or another the owner does not occupy it so it can be let to the local authority. The local authority provides guarantees on rent and on the condition in which the house will be handed back to the original owner. The process is
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therefore relatively risk-free for owners and supplies them with a guaranteed income stream, while providing housing for the kind of people to whom the private sector—for all sorts of reasons—is often unwilling to rent, but who are nevertheless in housing need.

Current policy presses councils to decrease their use of that system, but in the current circumstances, many houses are coming on to the market for rent because people cannot sell them. In addition, the number of people going on to the housing registers is likely to increase because of the economic circumstances. It would therefore make sense to take on those unsold houses or flats, not necessarily by buying them but by using that kind of lease. Encouraging councils to do that would be helpful. It would reduce the flood of unsold houses on to estate agents’ books and would meet immediate housing needs, without requiring the Government to take on the capital asset of properties that might not be appropriate for a long-term base of affordable housing.

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