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At the start of the month, I went to a presentation of the Enquiry by Design proposal, which, although disappointing, had some merit. I am not saying that work has not been done, but at that presentation, which was done by the agents GVA Grimleys, there was no mention of community land trusts. Certainly, the constituents who went along, many of whom are older and have views on what they would like to see come out of the siteincluding community provisionwere somewhat confused about why they were presented with just a housing development. That is sad and is not the way to do it. I am not criticising Grimleys or HCA, but we need proper consultation and to badge this for what it is: a different form of housing provision. It was wrong not to do that, and I had to mount a defence regarding whether we could deliver the site for the things that we wanted to do.
I make a plea to the Minister to look in detail at what the mutual home ownership model provides in terms of community land trusts. Ikon has come up with six different models for Cashes Green and Plymouth, and it would be useful to put them in the public domain, so that we can argue about them, look at their strengths and weaknesses and know where we are going. The debate is largely consensual and one on which Members from all parties can move forward, but we must look at how we can deliver the programme quickly. That is my big concern, because if Cashes Green is indicative, we are stuck in the detail and not delivering what we want: low-cost, affordable housing through locking the housing in perpetuity into mutual ownership and allowing people to climb the staircase by obtaining some equity value, if and when their incomes increase.
Matthew Taylor (Truro and St. Austell) (LD): I welcome the comments of everyone who has spoken, and I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) on initiating the debate. I am glad to have a few minutes to address the issues.
My principal concern is about rural communities. If the papers are to be believed, there will be a formal response to my report relatively soon. If so, the debate is well timed on two grounds: first, it may influence the response; and secondly, it may nudge the response so that it is made sooner rather than later. As the right hon. Member for West Dorset (Mr. Letwin) said, there is a time to move from finding that we all agree on the issue to taking some action, and the present economic circumstances have, to a degree, taken the matter off the boil in the press, because some believe that falling house prices mean problem solved. The truth, however, is that it is problem worsenedin three key respects.
First, if people think that the issue is no longer important, action is less likely to take place and will be diverted, because the Government have to address big issues that, to some extent, displace the issue before us. Secondly, need is rising. There are more people on lower incomes, and more people losing their jobs and unable to afford housing on the open market. One might think that that would be addressed by falling house prices, but because the issue is about a credit crunch and the availability of mortgages, the demands for deposits make buying even more unaffordable for people at the margins. Although they might have struggled to pay a monthly mortgage before, the rates available to them
have not fallen in line with the Bank of England rate; broadly, they have stuck at 5 per cent., and people who have small deposits are being asked to pay 6, 7 per cent., and in one recent constituency case 9 per cent., on a self-build exception site. The costs of getting into the market are higher than ever before.
Thirdly, the really big issue is that the private sector is no longer developing. I was at a meeting last week of a large number of developers, lawyers and those who are involved in the industry, and they were discussing who still had cranes up, because they were pulling out of any scheme that was not heading to completionwhere they were not so committed that they could not get out. The great majority of affordable homes are delivered as a quota on the back of private sector schemes, but that is not happening now. In every possible respect, the situation is worse now than when I reported, even though the detail may have become more complex and a little different.
I shall focus on the 16,000 communities with fewer than 3,000 people in this country. In such communities, there are two groups of people. There are the relatively wealthy, who may be incomers or local but can afford the homes and have benefited from the price rises, certainly as an investment. The majority of people say that they would like to move to a little village in the countryside, so the demand on such communities from people looking to buy is absolutely enormous. However, the other group of people in those communitiesthe people who work in them, the farm labourers, the tradespeople, the people in the shop or the pub and those who provide support as care workers for the elderly rich who have retired thereare being priced out. At best, such people end up having to commute from the poorer part of town to the rural areas, which makes no sense from a sustainability viewpoint; at worst, many of the facilities closethe shop and the pub no longer run.
We are just at the beginning of the cycle, because 20 or 30 years ago those people could still afford a home, or find a rented place or council house. However, the council houses were sold, the rented places have been turned into holiday lets or retirement cottages and the new generation is being priced out.
Linda Gilroy: The hon. Gentleman is much more of an expert on the rural situation; I tend to look at the issue in an urban setting. But did he find, or is he concerned about, what I found in my housing inquiry: that more than 40 per cent. of working households in the age group that would aspire to buy their own houses, at about 30 to 35 years old, are unable to get a mortgage? Although house prices will have brought that percentage down, that is the figure behind the demand and supply situation, and it is completely out of kilter.
I agree, and I do not want to take anything away from the urban problems, because they exist, too. We worry about an ageing population and how it will be supported if there are not enough people in work to provide facilities, but we are experimenting that situation in our rural villages right now, because it is already happening there, not because there are no
young people, but because they are being priced out of the communities. What do we about it? Nobody in this place believes that we should tear up the planning rules and build all over the countryside, despite the fact that when the issue is debated in the press, that is often how it is described. We all agree that that is not the appropriate way forward. I do not have time to go through all the reasons, but to most people they are self-evident. We need to provide a route for people who work in such communities but cannot afford a home there. Interestingly, they are often working people who, even if there is council housing, will not get any because they are not high enough up the need scale. They can afford the bricks and mortar but not the excessive land values.
The solution is partly in place: the exception site process, which provides affordable homes in perpetuity to people with local need and connections in such communities. There is a fundamental problem, however. First, some local authorities do not apply the policy. It does not apply universally, and its application is discretionary for the local authority. Even in those local authorities that have such a policy, however, it may be applied only in certain villages that meet criteria of sustainability. The smaller communities are allowed to die or wither and lose their services on the grounds that there is no bus stop; that they do not have a boundary, because we allow the policy only where there is a defined boundary; or that there is no suitable site, because the planners can be restrictive. The wording states that it should adjoin the existing community, but some interpret that as right bang up against the nearest 20 properties, which may be the very place where there is most resistance. Another, more flexible site may not be miles away from the village; indeed, it may have a connection to it, which is the way that properties used to be developed. Not every property used to be bang up against the next, and those sites may be available and attract support, but planners say no.
I raise the issue because it is the nub of what not only CLTs, but registered social landlords and even, in some cases, the private sector seek to do. I feel passionately that there is a role for the private sector, provided the development has a section 106 planning agreement, is affordable in perpetuity or has a local connection. There are various routes, but we need to turn exception site policy from something that is exceptional to something that we do in communities where there is housing need but where we would not allow open-market housing, which would almost certainly be sold to people moving into the community anyway.
So what do we need to do? We need to say to all the authorities that they need to have this policy in place if there is not an alternative supply of housing. Houses will not be allowed to go on to the open market, and the process must be allowed to take place, subject to key criteria. There must be community supportnot absolute support, as there will always be some opposition, but if the community itself says that it wants a development to take place, the role of the local authority should not be that of a gatekeeper, refusing it on technicalities, but that of an enabler, supporting it.
The right hon. Member for West Dorset was right to say that there needs to be support because communities themselves do not always have expertise. They need help with the process, which begins with identification of need in the community. Agreement around need opens
the door to finding a site, talking to Farmer Joe and Lord Whatsit to find somebody who is willing to make a site available. We know that sites become available if people understand that the houses will genuinely be affordable in perpetuity for the local community. For the local community is a key criterion, as is affordable in perpetuity, not least because no one will part with land at low cost if they think they could part with it at a higher value for an open-market development. They also do not want someone else to make a profit from it. No landowner will make land available if they think that a few years down the road the houses will be sold off as the council houses were and someone else will make the money. Therefore, affordable in perpetuity is important.
Another criterion, of course, is evidence of housing need. There is no point in doing this if there are not people with a local connection in genuine need who will be part of the mix of the community. The development must be of appropriate scale and style and be well designed, but as I said, it need not be on the one piece of green open space at the centre of the village on which all the opposition is focused. There needs to be flexibility about the site.
The key thing with the CLT model is that it brilliantly pulls all those criteria together. It gives the community surety on all those points because they appropriately hold the value of the site. That is why the model has support not just from Shelter, the Country Land and Business Association and the National Housing Federation but from organisations such as the Campaign to Protect Rural England. A point that I always make to those who say that we are talking about ploughing up the countryside is that the last organisation in the country to support ploughing up and concreting over the countryside is the CPRE, but it is behind this kind of proposal.
Sarah Teather (Brent, East) (LD): This interesting debate has been different from the kind of debate that the hon. Member for Welwyn Hatfield (Grant Shapps), the Minister and I usually engage in on Wednesday mornings, which is when we regularly debate housing. I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) on securing this debate. I want to acknowledge from the outset her report and the report of my hon. Friend the Member for Truro and St. Austell (Matthew Taylor), which are helpful additions to the debate.
Liberal Democrats have been championing community land trusts for a long timelong before others became so keen on themand I am absolutely delighted that there is now cross-party support for them. I was relieved when the Government agreed to cross-party representations to have them added to the Housing and Regeneration Act 2008, and I acknowledge the contribution of the hon. Lady in ensuring that that happened.
The hon. Lady clearly laid out the issue around need. She spoke about the case in her constituency that provoked her to begin work on her report. Both she and my hon. Friend the Member for Truro and St. Austell spoke
about house prices. The fact is that falling house prices have not actually increased affordability for many of my constituents and many people around the country, because the issue is affordability of credit. The hon. Lady made the point very well that we would require a substantial drop in house prices in many areas for affordability to become a reality.
The real danger is that if we do not keep pace with house building during this period when credit is drying up, we may experience hyperinflation later. Need does not go away just because mortgages dry up. People still want to be able to buy or rent houses, and the fact that they are finding it difficult to access credit does not mean that need disappears. The danger is that when lending comes back on stream, we will get back into another housing bubble and then, of course, another bust later.
Another point that the hon. Lady made very well was about the need for intermediate housing, which is often overlooked when we debate these issues. We talk a great deal about the need for social housing and home ownership, but the particular thing that CLTs offer is intermediate housing for people who fall between two nets: they cannot afford to buy but have too much income, are too wealthy or are not deemed to be in priority need and so are unable to access social housing.
The Co-operative party pamphlet, New foundationsUnlocking the potential for affordable homes is particularly helpful in laying out how CLTs may deliver an innovative model during economic downturn. It is a helpful addition to the debate, and I hope the Minister recognises that and will respond to it in his summation. Housing associations ability to deliver housing has been based on a model of cross-subsidy through private sales, which of course is now failing, whereas this innovative model of mutual home ownership offers an opportunity to deliver housing in a different way.
The hon. Lady spoke about mutual home ownership being an attractive investment for life and pension fund investors. It would be far less risky than investing funds in shares, asset-based securities, derivatives or hedge funds on global markets. It is an attractive model for investors but also an attractive model for people who are looking for some form of home ownership because there is far less risk that they will fall into negative equity. If mutual home owners do fall on hard times, they could sell some of their equity shares to others or freeze their equity and convert to a rental tenancy, which would not be possible in other situations.
Linda Gilroy: The hon. Lady highlights an important feature of the model. In addition, there is the Co-operatives track record of low debt: people do not build up debt and are able to pay their mortgage or rent.
The right hon. Member for West Dorset (Mr. Letwin), who is no longer in his place, made an interesting point about the potential for CLTs to get around the nimbyism that we often see when we encourage communities to build more houses. There is always tension between the Governments targets for house building and peoples fears about loss of lifestyle and change to the nature of
the local community. The point of CLTs is that they get around that problem because they come from the ground up. People have a stake in the developmentthey feel that they or their children may benefit from it. That makes CLTs particularly attractive for rural areas, which is the point that my hon. Friend the Member for Truro and St. Austell made here and elsewhere, although not in his report. However, the importance of CLTs extends beyond rural areas. The model is gaining a great deal of interest in London as well. The sense that people have that there is some possibility of accessing the development overcomes crucial fears. The right hon. Member for West Dorset also discussed the need for professional help and the importance of the relationship with parish councils and housing associations.
I shall conclude with a few questions for the Minister, which pick up on some of the points made by the hon. Member for Stroud (Mr. Drew). Of course there will be areas where separating the price of land from property will not, on its own, bring homes into an affordable range. What guidance has the Minister given to the Homes and Communities Agency on subsidies that it may make available for this kind of development? What has his response been to representations from CLTs that the Leasehold Reform Act 1967 should be amended to ensure that affordability is locked in?
A number of hon. Members mentioned value for money. I am interested in the idea of valuing a site based on the cost per year of affordable housing. The point about the current system for valuing a development being simplistic was well made. I wonder how the Government will ensure that we also take account of social value and social benefit to a community.
Having made those points, I remind the Minister that this matter has cross-party support, if he had not already gathered that from the debate. I hope that he will not just make it possible for community land trusts to exist, which is what the amendment to the Housing and Regeneration Bill did, but will positively enable CLTs, because this important, innovative idea may offer a solution at a time when many of the other models that we have for housing development are failing.
Grant Shapps (Welwyn Hatfield) (Con): I will try to be brief. First, I congratulate the hon. Member for Plymouth, Sutton (Linda Gilroy) not only on securing the debate, but on her excellent paper, Homes for the Future, which sets out many of the principles behind todays debate and the future of housing. I also thank the Minister for his phone call to me, during which he said that, having voted twice against our new clause on community land trusts, he had decided, under some persistent and welcome pressure from hon. Members in this Chamber and others beyond, to accept in the House of Lords an amendment that looked remarkably similar and which, for the first time, defined community land trusts in law.
There is a huge amount of agreement and perhaps even co-operation on CLTs, as is fitting for such an idea. The hon. Lady has already mentioned the community land trust taskforce, which met for the first time last week. I set up that taskforce to produce a report that
will, I hope, provide the recommendations that need to be put in place to encourage CLTs into actionto make them happen, as it were. Many of the eminent names that have already been mentioned this morningsuch as David Rodgers and Martin Largesit on that panel, so we know that we are getting expertise from the best sources. The taskforce is chaired by Dr. Karl Dayson of the university of Salford, who has spent a large amount of time, academically, studying this subject.
Some of the problems that CLTs face are questions of culture and misunderstanding. I enjoyed my visit to the CLT project in the constituency of the hon. Member for Stroud (Mr. Drew). I was struck by the story of a community coming together and doing all the background work, including studying and consulting the local community and working up the plan that the hon. Gentleman mentioned in great detail, only to meet English Partnerships, which insists on redoing all the work at a cost of £160,000, as I recall. That is nonsense and is contrary to the principles that we are all trying to establish for CLTs. I have taken that specific example up with the chief executive of the Homes and Communities Agency, Sir Bob Kerslake, who promises to investigate.
Last week I sat on a panel with Sir Bob Kerslake at the Guardian Future of Housing conference and one of the questions that came in was about what could be done to speed up CLTs. His response was, Look, Id just like to see any of these actually go ahead. There are many trials nowI have been round the country and have seen many or most of thembut they all suffer from problems of understanding or misunderstanding. People do not quite understand what they are about.
We are now in a position to do something with cross-party support and I hope that the Minister, in his last year or so, can get this scheme moving. There is a really pressing need, which has been brilliantly outlined by many, including the hon. Member for Truro and St. Austell (Matthew Taylor) in his report and the hon. Lady in hers, and in the Co-operative report of last week.
I was struck at the first meeting of our community land taskforce last week, here in Westminster, when, in response to the question, This is a great new idea, but how are we going to get it going? one panel member said, I saw this idea in Estates Gazette 20 years ago and ever since then I have spent my life trying to get the thing going. The time has come. Minister, we look to you to provide the guidance.
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