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Mr. Roger Williams (Brecon and Radnorshire) (LD):
I intended not to make a speech this morning, but to attend the debate and perhaps make an intervention. However, I am surprised by the lack of enthusiasm for this subject because it must be a constant theme that
representatives of rural areas encounter in their surgeries. I did not think that housing would be a big issue when I was elected, but it has turned out to be one of the most important. I congratulate my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) on his comprehensive approach to the subject. I will touch on a few of the points he raised.
At the end of the recess, I led a small group that included representatives of the National Housing Federation and the English young farmers clubs to meet the Secretary of State for Environment, Food and Rural Affairs on the issue of affordable rural housing. There were many encouraging comments and many aspirations were expressed. However, the delivery of houses is what is important. Many policies are in place, but they are not matched by a determination to bring them to fruition.
One Department for Environment, Food and Rural Affairs initiative that has proved effective is the position of rural housing enabler, which was established with pilot funding from the Department. Over time, that funding has been transferred to local authorities. Unfortunately, some local authorities have not continued to employ rural housing enablers because of the financial pressures they are under. The hon. Member for Stroud (Mr. Drew) said that making progress on this issue is sometimes like wading through treacle, or even concrete. Rural housing enablers have the time, persistence and energy to do that.
I met the rural housing enabler in my area recently. Some excellent work is being done in the village of Clyro. For example, land that is owned by local authorities and other public bodies is being identified to see if it can be made available to other organisations for the construction of social housing. The rural housing enabler has proved effective in Crickhowell, where a development has been built that is proportional to the size of the town. As is common, parts of the community were not hugely enthusiastic about the development. In the past, housing associations have been given targets for building houses and have built in communities without doing the necessary housing needs assessment. As a result, communities have been left with more houses than they needed and have not benefited.
Many people believe that we cannot achieve a decent level of affordable rural housing without changing the planning system. However, there are examples throughout England of local authorities that have delivered for the people they represent while working within the planning guidelines and policies. One such authority was South Shropshire, which unfortunately no longer exists because it was taken over by Shropshire unitary authority. The work that was done in south Shropshire has been transferred to the whole of Shropshire. The authorities in that area have succeeded in delivering a suitable amount of affordable housing.
A problem with planning is the definition of a sustainable community, which is used to decide whether a community could or should be expanded and developed. Some communities are deemed unsustainable because they do not have a shop, church, chapel, pub or some other facility. Often, they do not have such facilities because they were closed when development was not allowed. That is a chicken and egg situation.
My hon. Friend the Member for Ceredigion (Mark Williams) will raise the issue of obtaining mortgages for properties with local ownership conditions, so I will not
trespass on that ground. It is an important issue that banks that are subsidised by taxpayers' money are not aiding policies to provide rural housing development.
As I have said before, the problem we are debating is one of the key issues in rural areas. If we are a civilised society, we must ensure that we have enough housing for the people we represent. Anybody who solves this problem is worthy of an award with the status of a Nobel prize.
Mark Williams (Ceredigion) (LD): It is a pleasure to serve under your chairmanship, Mr. Key. I congratulate my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) on securing this critical debate. This subject is one of the biggest issues in my constituency postbag and at my surgeries.
It is a pleasure to follow the hon. Member for Stroud (Mr. Drew), who spoke about council housing. A large part of Aberystwyth looks as though it is made up of council housing. Many people who come to my surgeries believe in that myth and think that they will soon be able to access council housing. Sadly, half of the Ceredigion housing stock has been sold off. As he said, some villages have a row of six council houses, all of which have been sold off, leaving no provision of council housing in those communities.
As a Welsh MP, much of what can be done in my constituency to assist first-time buyers and to improve the provision of housing is rightly the responsibility of the Welsh Assembly Government. They are trying to secure renewed legislative competence in this area, including the power to suspend the right to buy in areas of acute concern. It is a pity that that provision did not exist somewhat earlier, when we had council housing to protect in that way.
Mr. Andrew Turner: Does the hon. Gentleman accept that although he has referred to problems, there are also successes, such as Nettlestone on the Isle of Wight, where a decision has been taken locally to build houses for people to live in, and I think five or six houses have been built there recently?
Mark Williams: I thank the hon. Gentleman for that intervention. I can trace my ancestry to the Isle of Wight, although not to that particular community. I accept the point that local initiatives need to be taken, and I will come on to that later. I simply wish to make the point that there is also a requirement for council housing and that we have lost a huge amount of that stock.
Like much of rural Wales, Ceredigion has for a long time been one of the least affordable parts of the United Kingdom. According to the most recent figures, the house price to earnings ratio is about 6.4. As I say, there is a chronic lack of social housing and, as of September, 2,594 people were waiting on the council housing list.
After the fall in house prices-some evidence was provided by the Countryside Alliance among others to suggest that the fall was much lower in sparse rural areas-prices are rising again and rental prices remain largely static, as more people choose to rent if they can, rather than attempt to buy. In my constituency, such a
situation is compounded by steady migration into the county, which, of course, we welcome, and a burgeoning second home sector, to which my hon. Friend the Member for Westmorland and Lonsdale alluded in relation to his constituency. The problem is also compounded by the success of the two universities in Aberystwyth and Lampeter, which puts huge pressure on the rental sector.
Ultimately, the obvious problem, which has been mentioned, is supply and demand. Until enough houses are built to meet the needs of communities, any measures to assist in making housing more affordable are likely simply to tinker around the edges of the problem. The hon. Gentleman mentioned the English figures on the targets for delivery and the figure of 22 per cent in relation to England. The figure is a little better in Wales, but not much, at 31 per cent. Of course, actual delivery is likely to be significantly lower, given the economic climate in rural areas.
My main concern is, where there is private sector housing as a product of market development, those developments remain at a standstill in many cases because of the difficulty in obtaining mortgage finance. I could literally take the Minister and her Welsh equivalents to scheme after scheme that is at a standstill in my constituency. For example, there are schemes where, out of 10 houses, three are deemed by planning to be affordable and there is a planning requirement for them to be built first, yet both developers and prospective residents tell me that they are being hampered by the inability of prospective purchasers to access mortgages.
For many of my constituents, accessing mortgages is nigh impossible. Yes, we need a banking sector that is more risk averse, but it is frustrating that people who should by rights be benefiting from schemes that local authorities have introduced to make housing more affordable have had a patchy experience. The concern raised by lenders is that such 106 properties have template agreements that ensure that if houses remain on the market for a certain period-perhaps six months-the restrictions are gradually released. However, that is not always suitable, particularly in small rural communities where there is acute need and where restrictions are put in place for good reason. I appreciate the work of the Minister's Department and the Assembly Government on the development of templates for 106 agreements, but I question the wisdom of the Council of Mortgage Lenders, although it makes the point that those templates are not routinely or consistently used by local authorities.
How much flexibility do those 106 templates afford local authorities and how far does that impinge on local circumstances and specific conditions? Sometimes those conditions necessitate that properties are deemed affordable for perpetuity, and require that there are occupancy controls for key service workers and that sales are restricted on the basis of local incomes. Those are the realities of the need in many of our rural constituencies. The Council of Mortgage Lenders has acknowledged that what it deems to be restrictive clauses lead to what it describes as a "diminished appetite to lend." That is the reality for a growing number of my constituents, who have come to see me. What discussions has the Minister had to address the matter of the section 106 templates, so that she can ensure her discussions with the banks mirror the needs on the ground?
It is bewildering for many of my constituents that some commercial high street banks are able to offer services in this area when others are not. As my hon. Friend said, it is bewildering because a vast amount of public money has been pumped into the banking system-of course, there has been more on that in the news today. My fear is that many mortgages that could have been agreed if the right situation and arrangements were in place have been lost because of this issue. Without redress, that will continue to happen. Although such experiences represent a minority of cases-the letters I have had from the commercial banks say that it is only 3 or 4 per cent. of cases-the figures are significant for those of us in rural communities. Some banks have a positive record-Lloyds has even helped the local authority in Ceredigion to construct its section 106 agreement-but I am afraid that others, such as Abbey, Northern Rock, Royal Bank of Scotland, HSBC and Nationwide, are not accepting the 106 criteria in my constituency.
Mr. Roger Williams: An example of that in my constituency is in Newbridge-on-Wye, where a development for 12 affordable houses has not gone ahead because the condition that the local authority wanted to put on them meant that no mortgage provider would provide the facilities to purchase them.
Mark Williams: That is precisely the point. The situation is worse than that. There has been a marked lack of communication within the banks, which means we have reached a ludicrous situation where mortgage offers are given to constituents when they have meetings in the high street branch, but when the offer is forwarded on to offices higher up the banking structure, the branch is told that it was not entitled to make such an offer. My hon. Friend makes a good point. I know Newbridge-on-Wye and that the issue is a problem there just as much as it is elsewhere in Ceredigion.
These problems run deep. I am particularly concerned about the implication on service provision in our villages and the effect on young people. Going back to July 2008-things have become markedly worse since then-the Taylor review identified that only 17 per cent. of purchases were made by first-time buyers. This is anecdotal, but a young couple came to see me in 2005 because they had no housing opportunities. She worked as a carer on a low wage and he worked as a part-time employee at our national library in Aberystwyth. If they had stayed in the area, they would have become part of the hidden homeless, living in a spare room in a parent's house, rather than being able to access accommodation themselves. The couple were forced to leave the locality.
Over 20 years, the proportion of young people in rural areas has fallen from 21 to 15 per cent. It is a sobering thought that without homes and jobs, there is no community left to support local shops, schools and services. It is no coincidence that we are also having a debate in rural areas about the vibrancy of our schools, and that we have had debates about the lack of post offices and the loss of shops and pubs. Such issues are intrinsically interconnected and we need a holistic approach from the Government to deal with them.
Andrew George (St. Ives) (LD): I am pleased to wind up for the Liberal Democrats. I congratulate my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) on the manner in which he introduced what is an extremely important debate for much, if not all, of rural Britain, given the pressures on the countryside and the difficulty of finding affordable housing for many local families. I will, of course, have to overlook his contentious opening remarks about the beauty of his constituency, particularly as mine covers west Cornwall and the Isles of Scilly, which everyone knows is far better by comparison.
Although the statistics may vary in different parts of the country, certainly many of those mentioned relate to my part of the world as well, and we could read that across to many other areas. It is important that my hon. Friend's analysis of the problem concentrated on moving towards solutions, and that the debate has not simply been about raising a series of gripes and criticisms of Government policy-instead, it has concentrated on the way forward.
The hon. Member for Stroud (Mr. Drew) mentioned the usefulness of the exceptions approach and the role of community land trusts, which are developing over time but which have to overcome enormous hurdles to achieve desired outcomes. The hon. Member for Isle of Wight (Mr. Turner) made an important contribution and emphasised the need to devolve greater planning powers to local communities and local authorities. The Government should listen to comments on that theme, to which I shall return.
My hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) made an important and telling contribution. He pointed out that although it is possible to work within the existing planning system, and although some local authorities, such as the former South Shropshire authority, were able to work with the limited tools available to them, there is no room for complacency. The difficulties that local authorities have to overcome to meet local housing need are enormous and, if anything, getting worse.
My hon. Friend the Member for Ceredigion (Mark Williams) emphasised the need for powers to be devolved-to Wales in his case. He also emphasised the important role of the banks and lending institutions in oiling the wheels to help the intermediate market properly take off. Those of us who have taken up casework in our areas and who are trying to assist such developments, particularly those with section 106 obligation agreements attached, have found that the lending institutions have not been particularly helpful.
I should declare an interest. Before I was elected to the House, I was a rural housing enabler before rural housing enablers were invented. I worked with a local charity in Cornwall and the Isles of Scilly, and I was one of the first shareholders in the Cornwall Rural Housing Association, which was established in 1986.
I shall concentrate primarily on two issues, the first of which is the fundamental problem of the dead hand of centralised control and its impact on the ability of local authorities properly to address the need for affordable housing in their areas. Regional spatial strategies have been mentioned by several speakers. The Government's overall objective of building 3 million homes by 2020 is
the totemic objective that drives policy. They simply ignore the need for the more subtle and localised approach that is required in many rural areas as they drive on with their top-down, prescriptive approach, which is inappropriate for rural areas. It is a tragedy for many rural areas that the Government are grinding on with a strategy that has failed successive Governments, who have simply attached housing development numbers to structure plans-now regional spatial strategies-in a manner that does not necessarily address the intricacies of the situation in rural areas.
The Government have confused the means with the end. The end is to meet housing need, and the means to do that is to build 3 million houses by 2020, but that target seems to have become the end of the Government's policy. They have become so obsessed with building those homes that they fail to recognise why they are building them. Let me give an example from my part of the world, Cornwall, where the housing stock has more than doubled in the past 40 years-indeed, we are the third-fastest growing place in the UK. Like my hon. Friend the Member for Westmorland and Lonsdale, I say that we are not nimbys; we are very much imbys. We have accepted and welcomed development in our fast-growing area, which is densely populated for a rural area. However, at the end of those 40 years of perpetual growth, the housing need situation for local people is worse.
One conclusion that we can draw from that example is that simply building houses is not the answer. People who follow housing policy in rural areas will recognise that being a one-club golfer-simply building more and more houses without recognising and adapting to the intricacies of the situation in rural areas-is part of the problem. I think we all recognise that there is a difference between land values in rural areas-between the value of agricultural land and the value of development land. That is the elephant in the room. The stroke of a pen at a local planning committee can increase the value of an acre of land from £3,000 or £4,000 to the equivalent of a lottery win. We know that the planning system is fuelled by greed rather than need, and that fundamental problem has made it extremely difficult to meet housing need. The need for a policy that meets housing need while retaining the integrity of the planning system and not simply turning it into a developers' charter is something that local authorities fully understand, and they need to take those considerations on board when they address these issues.
We need to expand the exceptions approach that the hon. Member for Stroud touched on. We also need to expand the intermediate market. Yes, the lending institutions need to be more on board than they are, but we also need to give local authorities the power and tools to address need. We cannot simply get around the problem by building cheap housing. I do not think that my hon. Friend the Member for Montgomeryshire (Lembit Öpik) meant or implied that we were talking about cheap housing for people who are in housing need. As my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) said a moment ago, in the past, local authorities knew about meeting local housing need and they built decent houses. What we are doing at the moment is cramming people into unfeasible spaces and creating ghettos for the future. We will regret that approach in years to come.
My second point is about second-home ownership, which has been mentioned by my hon. Friend the Member for Westmorland and Lonsdale and others. The issue is not about the politics of envy. We have achieved the removal of 40 per cent. of the 50 per cent. council tax discount that was costing the taxpayer about £200 million a year. It was clearly morally unacceptable to subsidise the wealthy for their second homes while thousands of rural folk could not afford a first home, so that subsidy had to be done away with. I remember a debate in this Chamber with the hon. Member for Sunderland, South (Mr. Mullin), when he was a Local Government Minister. I had been carrying on about the issue for years, and I told him that all I had heard from the Government were complacent responses, and he said, "Well, I've been reading complacent responses for too long," and put his notes down. We had a little chat afterwards, and the policy changed thereafter. I would like Ministers to take that kind of initiative.
I have undertaken surveys of estate agents in my constituency for many years. The last one I conducted demonstrated that three times as many properties were sold to second-home buyers as to first-time buyers. I am sure that many people will feel that that should be addressed, but before we can address the problems that second-home ownership creates, we must define what it is. The Government have always used the difficulty of defining second-home ownership as an excuse for not addressing the issue. We could use the capital gains tax register or references to form that definition. The recent exposure of MPs' misuse of the system of electing where their primary residence is demonstrates why that area of tax and tax record needs to be properly tightened. Using the electoral register, the council tax register, the business rate register and local knowledge, I believe it would be possible to define where second homes are. Once we had achieved that, we could bolt other policies on to it, such as tax and planning controls that would allow local authorities to determine whether someone should be allowed to turn a permanent residence into a second home. I hope that the Minister has been listening and that she will pass my comments to her ministerial colleagues, and that we will get some movement on the issue.
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