Examination of Witnesses (Questions 1-35)
STEVE HOWLETT,
MARK THOMAS
AND BOB
WILSON
22 MARCH 2010
Q1 Chair: Good afternoon. Thank
you very much for agreeing to give evidence to us in this one-off
session looking at housing in London. It is one of the passions
of London Members of Parliament, as you will be aware. For the
record, could you introduce yourselves very briefly and outline
your particular interests?
Bob Wilson: I am Bob Wilson from
the National Housing Federation. I am Assistant Director responsible
for our regions overall, one of which is London.
Mark Thomas: I am Mark Thomas,
Head of Campaigns at Shelter, the housing and homeless charity.
We advise people in housing need in London, but we also campaign
for more affordable housing provision in London.
Steve Howlett: I am Steve Howlett.
I am chair of the G.15. I am also the chief executive of Peabody,
but I am here as G.15. G.15 has about 410,000 homes in London,
housing one in 10 Londoners. We have been providing about 10,000
homes a year at the peak. I must emphasise that we are an informal
group; we are not a trade body.
Q2 Chair: Thank you. Starting
with Mr Wilson, how do you currently define an affordable home?
In terms of an assessment of where you think the need for affordable
housing is, how do you strike that balance between affordable
homes to buy and affordable homes to rent?
Bob Wilson: Our definition is
fairly simplistic in many respects from where we are in the sector.
Affordable homes for us describes our markets in terms of social
rented accommodation and low-cost home ownership. It is defined
by reference to the market that you're in, rather than any function
of numbers. Although clearly in market sale or market purchase,
it is simplistically put in numbers form as a function between
price and annual earnings. You can apply those sorts of definitions,
but in essence our view of affordability is that it is defined
by the market you are in. Our market, from a housing association
point of view, is rented social housing and low-cost home ownership.
It is as simple as that.
Q3 Chair: To what extent do you
feel that the pattern has changed in recent years and where do
you see it going in terms of the proportion of the population
needing affordable homes?
Bob Wilson: Well, clearly, there
is a chronic shortage of supply in terms of affordable social
housing, social housing to rent or shared ownership. That gap
is getting worse. We all know this. We all know the numbers. We
all know that, as each day goes by, the demand is increasing and
certainly with the impact of the recession supply has been hit
hard. That gap is getting bigger. Beyond that—the incidence
between social rent—we still see from a Federation point
of view that the bulk of the demand and the need is in relation
to social rented housing. But clearly in more recent times, the
case for low-cost home ownership has been well made. We all know
equally that, in more recent times, a gap is opening up in the
middle between those on the one hand who can be placed in social
housing and the people who aren't poor enough to rank for a waiting
list for social housing and aren't well enough off to afford to
buy or even to part-buy. So there is a growing gap in the middle
that is exacerbated by current conditions.
Q4 Chair: Remind the Committee,
if you would, of the cut-off point above which a household would
not qualify for social housing.
Bob Wilson: We know that in London
at the moment the proposal is that that is raised. From our point
of view, it is what it is. What is affordable in that sense, in
London, as opposed to other parts of the country—
Chair: What is the figure?
Bob Wilson: I don't know the figure
for cut-off. Steve?
Steve Howlett: The Mayor's proposal
is to increase it to £72,000 for couples. For single people,
I think it remains at around £60,000. Charities have other
requirements as well, in terms of the bulk of our stock. I have
to echo our concern. We were set up to house the working poor
of London, and the working poor of London are finding it extremely
difficult with the market as it is. On one of our estates an existing
tenant pays £75 a week for a two-bedroom flat in Covent Garden.
If she died, we could re-let it at £120 a week. The market
rent there, including services, is £400 to £500 a week.
There is a huge middle ground, which we have to find some way
to help. I believe that if you can help that group, you can release
housing at the lowest rent, so that some people can move up and
out—a stepping stone to perhaps paying a higher rent for
those that can afford it, perhaps shared ownership. If we don't
do something like that, a lot of people are going to miss out.
Q5 Jeremy Corbyn: I am interested
in the point you were making there. Doesn't it end up that associations
like yours become a kind of social agency, operating around social
policy? Surely, there ought to be a fixed rent basis, based as
council rents are on costs of the building and of administration.
It seems to me that you are looking at your tenants and examining
their income, and then deciding the rent they will pay.
Steve Howlett: No, we have a rent
formula that was set by the Government and we apply that. One
issue is that there is also an intermediate market for people
who don't qualify, and we are trying to provide for that market
as well, providing a broader spectrum. I have to say that Peabody
is always going to be there for the people who are on the lowest
incomes. I want to see them do better. If they can stay in our
homes, we can act as a springboard with them in situ. There is
an issue at the moment, when we are all concerned about the future
of public finance, about how we can generate funds to provide
more housing. That is a part of the debate that we would like
to take part in.
Q6 Jeremy Corbyn: Could I just
make a quick point? Within that issue, your association, as much
as any other, has been forced to sell quite a lot of properties
in order to keep afloat. Do you see that as a good policy, or
as something that you were forced into?
Steve Howlett: I've had discussions
with some members of the Committee separately about the situation
in their constituencies. Because of our historic low-rent policy,
the introduction of a rent policy preventing us from raising rents
to get private borrowing on existing properties to invest, and
Government money being focused on new homes rather than existing
ones, we were in a situation where we had to meet the Decent Homes
standard. The only way we could raise the money—we couldn't
put the rents up; we couldn't get public money—was to sell
properties. I didn't particularly want to do that. I have to say
that we would not now build a big estate that was exclusively
low-rent. We would look for a mixed-income group of people to
live there, and this has enabled us to do it. If we had been able
to go faster towards the Government's affordable rent target—in
one Member's constituency I mentioned, if we could have gone half
way—we wouldn't have had to sell any properties. It was
not something that we would want to do, but it had to be done.
It certainly was not to get us out of a hole; it was to meet the
objective of providing good homes for our existing tenants.
Q7 Chair: Isn't it true, on that
point, that most of the properties that Peabody sold were street
properties? Certainly, if one looks at the sales going on at auction,
they are almost invariably RSL street properties being sold.
Steve Howlett: Actually, we've
sold quite a lot of properties on our estates. We have had a real
focus on bedsits and one-bedrooms and have tried to avoid selling
larger homes, particularly as we have grown more confident that
we can raise the money to meet the decent homes standard. I am
happy to supply the figures if you want. I will say that we did
sell some street properties, but that was in the early days of
a policy when we really had to get on with trying to raise money.
Q8 Chair: Just on this point,
Mr Wilson, are you aware of how many properties are sold by RSLs
during a year, and do you track them?
Bob Wilson: We don't. I've no
doubt that other agencies do—maybe the HCA, the TSA or the
Corporation did in the past. We don't track them, other than,
as we know historically from the global accounts that the Corporation
used to produce and the TSA still produces, that there still is
a turnover of sales proceeds in the corporate balance sheets of
the sector. That may come from shared-ownership sales in that
market. That market and those sales have actually been a key component
in enabling housing associations to plough funding back into the
business, so the notion that the sector would generally want to
divest itself of social housing, when we all know that we need
more social housing—net—is anathema. We would not
naturally want to do that. The fact is, in financial terms, the
sales proceeds from shared ownership in particular have actually
been a key driver. In fact, without those net proceeds, for the
past six years, the sector would have been in the red had it not
been for those sales. They are part of that market that has been
helping to drive the engine.
Q9 Chair: Just returning for a
second to the issue of affordability and particularly the sales
and, as you mentioned, the threshold being raised in the draft
housing strategy, do you have an analysis—I don't know whether
Mr Thomas knows anything about this from Shelter—of the
number of people on housing waiting lists, for example, whose
household incomes are in the category that is between the current
threshold and the upper threshold that is being proposed in the
new draft housing strategy? That is, households with incomes up
to £70,000 who are actually on the housing waiting list.
Mark Thomas: I don't have those
precise figures now. I'd imagine that the number is relatively
small. Certainly, if we look at council tenants, the vast majority,
nationally, earn less than £30,000. It would be interesting
to look at that, but those aren't figures that I have. I would
say that, in terms of intermediate provision, we would like to
see more focus placed on intermediate homes for rent at sub-market
levels at levels above social rented levels.
Q10 Chair: Just a last question
from me: do you think, looking at the draft housing strategy,
that it is a sensible use of resources to target affordable houses
at households with incomes up to £70,000?
Steve Howlett: I think that one
of the things that we have to look at is whether the people moving
into it are freeing up other accommodation that might be let at
a lower rent. It is not as simple a question as looking at—
Q11 Chair: How many of your tenants
have household incomes of over £60,000 or £70,000?
Steve Howlett: I don't know. I
imagine it's quite low. We have a very low turnover rate, of something
like 2.5%. Some of those residents' positions will have changed
quite markedly since they were originally housed. We do not collect
that information on current rents, only on when people are housed.
It is obviously very low at the start.
Q12 Chair: Would there not be
a prospect that you actually have some tenants with a reasonable
household income?
Steve Howlett: Yes, that's exactly
right. I think that having a mixed income group on our estates
has been very helpful. That is, again, one of the reasons why
we would support the provision of intermediate housing. It is
a further element of choice for people.
Q13 Mr Slaughter: There is one
point that I didn't quite follow. You were talking about a sector
between social rented and the current intermediate sector. As
I understand it, Mr Wilson, you were saying that the current intermediate
sector was unaffordable to a substantial number of people who
fell between the two stools and are not eligible or simply do
not have access to social rented housing but are unable to afford
intermediate housing or shared-ownership housing at the moment.
Could you say more about that? What do you see as a solution?
What type of units? Do you agree with Mr Thomas?
Bob Wilson: There is clearly a
case for an intermediate rented market. I think it will become
increasingly clear as the next few years go by, as the recession
bites and with more to come, that that gap will appear and that
the middle group will not be picked up by social housing in terms
of waiting lists. It can't get on a waiting list in any case.
It doesn't rank for inclusion on a waiting list and simply can't
get a foot or a toe even on the bottom of any housing ladder.
In terms of solutions, I think the private rented sector will
be a natural area for that group to turn to, but we should not
forget it in terms of an intermediate market.
Q14 Mr Slaughter: Are you admitting
then that shared ownership—this is not a party political
point, because both parties have put faith in shared-ownership
housing—is not proven to be a solution to the shortage of
affordable housing, particularly in London where prices are higher?
Are you saying that, whether it is done through RSLs or through
the private sector, we should be looking for, as Mr Thomas said,
a rented sector above social housing rents but below market rents?
Bob Wilson: No, I'm not saying
that. I think that the case for shared ownership over the years
has been proven. It has acted as a good stepping stone and has
opened up a market for those people who want to move on from social
rent and who aspire to own a house. There has been a market for
it and it has been proven. I think that, going forward, it is
a question of balance. Where should the priority be? We certainly
still see the bulk of market pressure in the social rented sector,
but that is not to say that low-cost home ownership doesn't have
a part to play. I think that that has been proved. It is the market,
which is broke, as opposed to the model, which is broke, if the
market repairs itself, the model will again work. The proceeds
from turnover in shared ownership will help to cross-subsidise.
One of the reasons why housing associations have felt extra pressure
these past two years is that the cross-subsidy that they have
been able to lever in alongside private finance to drive the engine
has gradually disappeared. I think there is a particular problem
in the shared-ownership market with lenders to do with shared
ownership and risk. Frankly, we do not understand that. I hope
that, if and when things improve, that part of the broken market
will work again.
Steve Howlett: There is substantial
demand for shared ownership in London. People have come in their
thousands to fairs to find out more and sign up. The difficulty,
as Mr Wilson said, is the funding that is available, particularly
from banks and building societies. Some banks won't fund shared
ownership, because it is not the simple, vanilla model of somebody
buying outright. Deposits have also presented problems for people,
as has the complexity of the model. We would all like to see a
simple model that people can understand. In shared ownership,
you rent part and buy part, which is pretty simple, but some of
the models that have come up have become too complicated and do
not really say what they are about.
Q15 Mr Slaughter: But it is right,
is it not, that the whole point that Mr Wilson made was that most
shared-ownership properties, certainly in wealthier areas of London,
require an income level substantially above that of the majority
of people in social rented housing? There may be loss leaders
doing it, but generally what I find is that you need a household
income of £30,000 to £40,000. The very fact that the
Mayor is extending that limit to £72,000 implies that they
are looking for that sort of level. What I am asking is: do you
agree that there is a market of people who are not currently being
catered for who cannot access shared-ownership housing? It is
not that it is too complicated or that there is nothing available.
They don't seem to have the income to do it.
Steve Howlett: I think we need
a broader market between the affordable rent levels and the intermediate.
But I do think that the shared-ownership products do free up some
of the lower-cost rented housing to make it available for others
who need it more. The priority is to take nominations from local
authorities for those shared-ownership sales.
Q16 Mr Slaughter: If you have
a 2.5% turnover on tenants, would there not be a lot of envy of
shared-ownership properties?
Steve Howlett: We do have a demand.
People would like to have them. Affordability is, of course, an
issue in London that makes it difficult for quite a lot of those
people.
Mark Thomas: Can I just come in?
There is a role for shared ownership. The issue is about the balance
between shared ownership and problems of intermediate provision.
At the moment, it is very much skewed towards shared ownership.
Shelter would like to see a more equal balance, and more emphasis
placed on intermediate provision. It is important that we are
not in a situation of encouraging people into shared ownership
when we are not absolutely convinced that it will be sustainable
for them financially. Seeing the problems that we have got into,
with people over-stretching themselves, the Government have to
be very careful that they don't end up encouraging people to do
that kind of thing. I have no doubt that the housing associations
and others administering the schemes do tests and such things,
but for people in the £30,000 to £40,000 income bracket,
there are real questions about whether shared ownership will provide
them with a sustainable housing solution to go forward.
Q17 Jeremy Corbyn: On the question
of shared ownership, what evidence do you have of the numbers
of those who bought into shared ownership who have staircased
up? Secondly, it seems from personal experience that there is
enormous disparity between the quality of management for leaseholding,
the service charges and the arrangements for capital works and
sinking funds. There seems to be a complete lack of uniformity
across the piece. It sometimes looks from the outside that there
is a temptation by the associations that own the freehold of the
shared ownership of using them as a good source of cash for a
long time to come by adjusting service charges.
Steve Howlett: On the issue of
service charges, we want to recover the cost of services from
shared owners, to make sure that the other parts of our operation
are not subsidising the shared owners. We are open with what the
charges are, and consult residents. I recognise that service charges
can be an issue, but we are striving to be fair about how we apply
them. Staircasing has slowed down quite appreciably in the last
couple of years, but before that, it was something that did work
well. When the economy and the market picks up again, perhaps
it will start.
Mark Thomas: It is an issue when
we think that more research and more information are needed about
what happens to people who go into shared ownership and what their
experiences are. People can find it quite difficult to move on.
Some of our feedback is that people find the schemes very confusing.
There is a proliferation of different schemes. It can be difficult
for people to get their heads around what the rules are. We would
like to see a move towards greater simplicity in schemes, as well
as greater transparency, and, critically, to ensure that, if people
go into the schemes, they do so with really good independent advice,
so that they are able to properly assess certain consequences.
Q18 Clive Efford: Mr Wilson, how
do you feel that the housing market in general has changed? The
current situation is that there are no 100% mortgages, and people
require deposits. How does that change demand on shared ownership
and the intermediate market? What do you think is the immediate
and the long-term future?
Bob Wilson: Well, in recent times,
there has been a massive effect. Notwithstanding what Mr Thomas
said, in terms of shared ownership properties and the behaviour
of lenders, the hoops that many applicants have to go through
and the hurdles they have to jump over, which housing associations
have to look at and review, are far more and far greater than
in some other areas. In our view, the risks to the lender are
certainly not any greater. CML produced some numbers last year,
which showed that failure rates in relation to shared ownership
mortgages were certainly no higher than in the rest of the residential
market. But you're right to suggest that there has been a significant
impact on liquidity problems generally in the economy. That has
fed through into the private sector and people can't get 90 or
100% mortgages. One of the problems in the recent past is that
people have been getting probably far more than that, and that
is one of the things that stoked up the bubble, which has now
burst. That non-availability and problem with liquidity in the
market has had a significant impact in the short term, certainly
on shared ownership.
Q19 Clive Efford: It has been
suggested recently that there is going to be more demand for people
to live in affordable housing while they save for deposits. Is
that something that your industry is taking into account in future
planning?
Bob Wilson: Yes, clearly. Someone
last week said that the average age of the first-time buyer these
days is 37. I heard that said, and our own David Orr said something
similar, so clearly the shape, size and behaviour of the market
generally is changing significantly. All that has to be planned
for and taken into account—absolutely no doubt.
Q20 Clive Efford: Okay. Mr Howlett,
Mr Wilson says that there are unnecessary barriers in the way
of people going into shared ownership schemes with registered
social landlords. Is that something that you recognise?
Steve Howlett: Not really. My
interpretation of what was said is that we are very careful to
make sure that people aren't over-committing themselves going
into shared ownership. We'd like to see a system of much more
flexible tenure where there can be a safety net for people whose
circumstances change, and people can move up and down in terms
of the cost of their provision and their share of ownership.
Q21 Clive Efford: I'm going to
move on, if I may. Mr Thomas, what assessment have you made of
the progress that boroughs have made towards delivering affordable
housing?
Mark Thomas: To start with the
London-wide picture, obviously there has been some dropping off.
One has to acknowledge that that is in the face of some considerable
challenges. Drilling down to borough level, boroughs face very
different levels of need and also, to some extent, different delivery
challenges as well. However, there is quite a lot of variability
between councils in terms of the targets they are setting themselves
and the delivery of their targets, and also in terms of the relative
weighting they give to social rented provision versus intermediate
housing. A critical issue going forward is how we can make the
structures in London work to make sure that boroughs have incentives
to set ambitious but at the same time realistic targets that are
based on meeting the housing need in their local areas and across
London as a whole. I think that would be a critical test for policy.
Q22 Clive Efford: What about the
Mayor's targets for affordable housing? Should they be altered?
Are they realistic? Should they be increased?
Mark Thomas: The Mayor's committed
to reviewing the targets in a couple of years, and we've said
that the affordable target should be very much reviewed as a central
part of that process, because over the longer term we would like
to see a more ambitious target if that is achievable. A couple
of years down the line will be the time to assess how the economic
circumstances have changed and whether we can up our level of
ambition.
Q23 Clive Efford: That's a bit
mealy-mouthed, isn't it? You're supposed to be a pressure group.
Is the Mayor's target sufficient to meet the needs of people in
London or not? It's quite an important question.
Mark Thomas: The context is that
the level of need for affordable and social housing is in fact
above any of the targets that anyone has actually suggested. We
feel that it is important to set realistic and achievable targets.
We are then very committed to making sure that they are adhered
to. In our minds, the overriding need is for social rented housing.
The Mayor's targets equate to just over 9,500 social homes per
year, which is in excess of what we have achieved over the past
couple of years. Given the circumstances, we think that the targets
are quite challenging, but we will absolutely be holding the Mayor
to account for delivering against those. When we feel that a higher
target would be appropriate, we will push for that.
Q24 Clive Efford: There was a
target of 50% affordable housing on all housing developments and
that is no longer the Mayor's target. Was that a retrograde step,
or something we should be looking towards?
Mark Thomas: We feel that we have
to look at the outcomes that were being achieved. As I say, the
critical thing for us is what has been delivered in terms of social
rent housing. There was great variability there. The other thing
is the split between intermediate and social rent housing. In
fact, the previous Mayor's target was not being achieved. We will
have to see how the targets play out, and whether they achieve
that for us will be the critical thing.
Bob Wilson: I think, just to go
back if I may, over one point, yes the targets are set certainly
at the lower end in relation to assessed need. They are short
of assessed need. Having said that, there is an assessed need
across the country for 3 million homes by 2020. There is no way
that is actually going to be met, but it remains or remained a
target—it probably still is—but it is an aspirational
target and that's fine. In terms of recent performance, however,
in the past few years the current target is quite stretching.
Having said that, with the prospect, potentially, of public spending
cuts in housing, it will probably turn out to be quite stretching
indeed. One of our concerns about the targets and the 50% you
mentioned, is possibly more to do with the danger, as they currently
stand, that by not having a percentage target of specific sites
and moving to negotiated targets for individual boroughs, we may
not end up with truly mixed communities. Some will over-perform,
some will underperform and you may not get the houses you want
in the areas you want them; it may not be an even spread.
Q25 Clive Efford: Are there any
boroughs that cause you alarm at the moment?
Bob Wilson: I wouldn't say there
were any boroughs that cause me particular alarm. Our main concern
is looking across the piece, and the feeling we get that dealing
with targets this way could result in an uneven distribution and
a concentration of social housing in areas where there is already
significant provision. That will not help provide mixed communities.
Q26 Mr Slaughter: You're suggesting
that the way that the current Mayor has set out his stall on targets
could lead to difficulties.
Bob Wilson: It could, and we've
made that point already.
Q27 Jeremy Corbyn: What comment
would you make on the effectiveness of the Homes and Communities
Agency in delivering affordable housing across London? Do you
think that the strategies to get affordable housing for each borough
where there is a problem of land supply are effective and working,
because the statistics would suggest not?
Bob Wilson: Can I just check that
the first part of the question is in relation to the effectiveness
of the Homes and Communities Agency?
Jeremy Corbyn: Yes.
Bob Wilson: Certainly, in this
last year and a half from an effectiveness point of view, the
Federation's view is that it hit the ground running. It was flexible
virtually from day one when it came to grant rates and some of
the schemes that needed to be flexed to achieve any housing delivery.
So we have been quite happy, from a Federation point of view,
over the past year or so, that the HCA has been generally very
flexible. We have some concerns in relation to single conversations,
but that is a different question from the one you asked.
Steve Howlett: Could I just say
that G.15 members are major customers of the HCA, and we are really
pleased about how it's all worked? I think that if it hadn't been
for the HCA and housing associations there would have been a real
problem in the provision of housing in London over this period
of economic difficulty. I think that we have been the only show
in town, as it were. In terms of moving forward, I understand
that the Mayor has agreed 40,000 targets with the boroughs. I
do not know the individual breakdown of those. From our perspective,
the most difficult thing in providing housing where we want to
provide it is the cost, and central London is more expensive than
outer London and there is also the difficulty of land supply.
We are very keen to work around here, in Westminster, but there
is a real shortage of land at prices that can lead to affordable
housing. I didn't quite catch the last part of your question.
Q28 Jeremy Corbyn: Oh, sorry,
maybe I wasn't clear enough. You partly answered it with your
last answer. It appears to me that land supply is better in the
outer London boroughs such as Bromley, Enfield and Redbridge—the
outer ring. Social housing demands are high everywhere, but they
are chronically high in the inner London ring of Hackney, Lambeth,
Lewisham, Islington and Camden, et cetera, where land is
more difficult to obtain. Do you feel that the Homes and Communities
Agency has sufficient powers or is interventionist enough to try
to redress this very serious imbalance?
Steve Howlett: It's early days.
The first thing is that it had to deal with this economic recession
and the difficulties. Single conversations with the boroughs are
under way, and it is probably too early for me to say how far
that has developed. I have to say it is not universal around inner
London that there aren't sites available. I can say that we have
a number of opportunities in Southwark and that in Hackney the
local authority is being very helpful, and we also welcome the
Mayor's initiative in terms of the land owned by the GLA family.
If, as he has suggested, there are 30,000 homes on GLA-family-owned
land and that can be got out and can help the people we are in
business to help, that would be a very good thing. It is tough
in Westminster, as land is in short supply. The local authority
in Westminster has helped us, and I am really pleased to say that
with money from the HCA and Westminster we are building 57 affordable
homes, I think, in Pimlico—some rented, some shared ownership—with
community facilities. So, things can happen, but it is very tight
and difficult, and we are all trying to find ways of providing
housing.
Jeremy Corbyn: Thank you. That's encouraging.
Q29 Mr Slaughter: I think we've
dealt with the questions that I was going to ask, but following
up on the questions from Mr Efford, I am a bit perplexed because
from the answers that you've given us so far, I am not sure whether
you're doing your jobs very well. You all have a responsibility.
Mr Howlett talked about Charter and the objectives of Peabody.
Charter has a long illustrious history as a campaigning organisation
for those who are either not on the housing ladder or are struggling
to get on it. Equally, you are an advocate for the housing association
movement. My experience on a week-to-week basis is of people in
dire housing need, through either overcrowding or a lack of access
to housing, who are not being served. I am not putting the blame
on the Mayor, the Government or anyone in particular, but shouldn't
you all be on your soap boxes shouting about this? Aren't you
all paid to advocate for people who are in housing need? What
you have said to us so far today is, "We'll wait and see
what happens. With all those set targets and the difficult situation
at the moment, let's wait and see what happens over the next couple
of years." I'm not saying it's easy, but I am saying that
I don't think you're trying very hard if this is the attitude
you're putting forward.
Steve Howlett: Actually, I don't
accept that at all. We are working with the Mayor, who has been
there for two years; all the indications are that things are happening.
We are all working really hard to provide housing in a very difficult
economic situation. One of our biggest concerns is what is happening
to public expenditure into the future—that is the real worry.
I am a passionate advocate for the provision of affordable housing.
It makes sense for people and it makes sense for the economy.
Housing can be a real driver of economic regeneration. For every
£1 billion the public have put in, we are able to raise of
the order of £2 billion in private money to provide more
housing. That has got more difficult as costs have risen and the
market has decreased. For every £1 billion, I think we generate
21,000 jobs, which are really important to London's economy. We
have to be realistic. It is very difficult when the whole environment
is saying that public money is under severe threat. We will keep
arguing for it and see how it all develops in the next few months,
but I can assure you that we are working hard. I am very pleased
that Peabody now, after a time of not providing new housing, is
providing housing, and we will carry on doing that.
Mark Thomas: Perhaps I could add
to that by saying that Shelter is absolutely committed to highlighting
the gap between the housing needs—both nationally and in
London—and what we are doing at the moment. Last week, we
launched an initiative that was a league table of council performance
up and down the country, highlighting what they assessed that
they did in terms of affordable housing and what number of homes
were actually getting built in the individual areas, encouraging
greater transparency about that and very much encouraging local
people to contact their elected politicians and hold them accountable
for what was happening in their areas. There is, though, a debate
about the means of getting to the outcomes that we want to see.
We have seen some shift in approach in terms of the current Mayor
and his relationships with councils. We will have to see how that
goes. We are monitoring that very carefully. If it is seen not
to be working, then we will be the first to talk about that.
Bob Wilson: If I could say as
well that certainly the Federation over the past three, four or
five years has championed the cause of more investment in social
housing. The last comprehensive spending review was an example
of just that actually, and a result for Federation lobbying. We
will continue to champion that cause as we go forward and as the
focus falls on public sector expenditure, and housing in particular.
I just add, from our point of view, the drivers in terms of need
in housing are the massive waiting lists, with 350,000 households
in London; homelessness; and overcrowding. They are all drivers
of need. The single most important solution that will answer those
needs is building more housing. The simple fact of arithmetic
is that you cannot build social, affordable housing without subsidy
from somewhere, either in the form of public grant—or grant
as equity, if that's the new phraseology—or free, discounted
or public land; public land made free. That needs to happen. You
can't do it without subsidies from somewhere. Going into the next
public spending round, certainly the federation will be continually
championing the cause for a better case for housing. If we cannot
maintain the current levels of investment in public housing, then
those problems will get worse and worse—that gap between
supply and demand will get worse and waiting lists will grow.
The reality is that we are moving into a situation under the next
spending round where the pressure is on for cuts right across
the board. Housing will be in there. We are arguing the case now
for housing to be ring-fenced in the way that health and education
are in the lead-up to the election. During the lead-up to the
election, we would like to see housing rather higher up the agenda
than it is.
Mr Slaughter: Again, I won't pursue that
at the moment, because we are going on to housing needs.
Chair: No, do, because we'll run it together—I
am conscious of time. Why don't you cover that as well, if you
would like to?
Q30 Mr Slaughter: You have just
mentioned overcrowding, Mr Wilson. This is an immediate problem.
I take it that there had been no cuts, but an increase in the
investment in housing in the last two years. There have been no
cuts so far, but you're obviously right to be cautious given what
may happen in the future. What strategies do you see being available
to reduce overcrowding at the moment?
Bob Wilson: Again, obviously new
build is, we think, the overriding solution. Building bigger family
homes would be part of that solution. Setting targets within the
targets, if you like, for bigger and family homes would be a good
idea. We know that that is on the cards, and we know that everyone
thinks that that is sensible. That is one of the solutions, and
we are pleased to see some signs of that beginning to happen.
As regards other on-the-ground solutions, I think, Mr Howlett,
you'll be able to say something.
Steve Howlett: There is a lot
going on, actually. Overcrowding is still one of London's biggest
issues. One of the things that we've been doing is providing attractive
new housing schemes for older people. We've got a scheme in Southwark,
which has attracted people living in three, four or even five-bedroom
affordable homes to move into older persons' housing, and I am
very pleased that the Government have shown quite a lot of interest
in that and seeing whether that is an opportunity. I think that,
as well as providing new homes, we have to make better use of
the existing stock—looking at ways that we can perhaps add
on extra space to existing homes and build on existing estates.
One of the things that we've been working on is called new generation
lettings, which is targeting smaller homes at the older children
of overcrowded families, so that they move out and create space.
We're looking at the support that we offer people. Actually, one
of the things that often encourages somebody under-occupying—I
think we're in a situation where there's roughly a balance between
under-occupation and over-occupation—is helping people move
out of under-occupied property. It is not the financial incentives
that do it, but somebody helping with the curtains and carpets,
the move and the power suppliers. I know that a number of G.15
members are doing schemes like those.
I applaud a lot of local authorities that
are sharing information with us. We are working together to tackle
overcrowding. So I think it's a mixture of new supply, making
better use of existing supply and focusing. One of the things
that I know a number of associations have done is find out who
the 20 most overcrowded families are, find solutions for them,
and then move on to the next lot. I think when you target action
on a particular family, it can bring results.
Mark Thomas: May I add a few things
to that? First, the provision of family-sized homes is absolutely
key in London. The Mayor has committed himself to a figure of
42%, so it is critical that he achieves that, and we're not there
yet. In addition, there are a couple of aspects that aren't encapsulated
in that target. The Mayor has also committed to halving severe
overcrowding by 2016. But that doesn't include overcrowding in
the private rented sector. One of the trends that we've seen in
London is a sharp increase in the level of overcrowding, including
severe overcrowding, in that sector. We'd like more to be done
to look at that. In addition, the targets at the moment focus
on family-sized housing, which is defined as three-bedroom or
more. But there is an issue about the proportion of homes being
delivered that are four-bedroom. Those are also much needed. It's
important that we keep an eye on that. As Shelter said, we think
that there's a case for a target for the number of four-bedroom
homes delivered as well.
Q31 Mr Slaughter: Are you agnostic
as to where these homes go within London? This goes back to the
issue of overall targets or targets for individual boroughs. Clearly,
the problem reflected in terms of central London is perhaps even
more so in the case of family housing, because family housing,
particularly with gardens, which need space, is even more difficult
to come by. What's your view on that? Are you looking for most
family housing to be either in outer London or in cheaper areas?
Mark Thomas: I think, for us,
we'd say no. We recognise the greater barriers that exist in inner
London, but we think it's really important that it's provided
there as well.
Q32 Chair: I am conscious of the
time, and you have been generous with your time. We have others
waiting. As a very last point on this issue, the proportion of
stock in the RSL sector that is given to local authorities for
nominations across London is what? Can you remind us?
Steve Howlett: It depends, partly.
It's generally 50%. On new lettings it can be 75% and in certain
cases higher than that, but generally it's 50%.
Q33 Chair: If RSLs on average
have around 50% of their own stock to deal with their own internal
transfers, and so forth, why would it be that any RSLs have statutory
overcrowding within their own stock?
Steve Howlett: I think it's the
shape of the stock. Many associations, for a variety of reasons—history—have
more smaller accommodation than large, and there has been an under-supply
of larger accommodation. At times the funding system has very
much favoured the provision of smaller accommodation, and I think
it's that imbalance. A lot of our Victorian estate, for instance,
is actually quite small. We've knocked two into one and three
into two, and so on, to create bigger ones, but we still have
pressure on the volume of smaller accommodation.
Q34 Chair: Is that something G.15
and the Federation have made representations to the HCA about?
Have they said that we need to be able to develop family-sized
accommodation in each area, and what is the response to that?
Bob Wilson: Well, I think we are
all singing from the same hymn sheet in that respect. I think
there's a general recognition of the need to build more family-sized
homes.
Q35 Chair: Why is it not happening?
I'm just looking at my own borough. For example, last year: 29
units of three beds and above in the entire borough, in an entire
year. So if we're singing, we're clearly not exactly dancing.
Bob Wilson: I think we probably
come back to the targets and the fact that having targets as they
now are—I'm not just talking about London, but across the
board—for building more three-bedroom and above housing
is a good thing. Having targets generally is a good thing, because
it tends to drive results, and I come back to one of our concerns,
being that the way the targets are in London at the moment we
may not get that.
Steve Howlett: The HCA does have
targets and has increased those targets since it came into being.
I think it's around 43%, but you've got an expert witness coming
to that. But we're very conscious that the HCA wants to see more
family housing, and frankly so do we. What we've got to do is
make sure there's a funding system that enables us to deliver
it.
Chair: Thank you very much.
Chair: Thank you very much for giving
evidence. I know you were listening to the evidence before. For
the record would you just introduce yourselves?
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