Housing and Planning Bill

Written Evidence Submitted by Solihull Council (HPB 61)

Housing & Planning Bill 2015-16

1. Introduction

1.1 Solihull Metropolitan Borough is located on the southern edge of the West Midlands Conurbation. A strong economy, a high quality environment, aspirational housing and excellent schools makes Solihull a desirable place in which to live, work and invest.

1.2 Solihull Council has initiated innovative approaches, most notably the North Solihull Regeneration programme which since 2005 has delivered significant investment in new housing, schools and environmental improvements. Over 1,000 new homes have been built and by 2020 this will have risen to more than 1,800. The development of Village Centres provides a focus for integrated services for the benefit of local residents. These provide a wide range of services including health, education and training, leisure, employment and retail, supported by residential development.

1.3 Solihull has responded positively to the potential for the proposed High Speed 2 (HS2) interchange to bring forward development. The area around the proposed HS2 interchange station in Solihull has the potential to be a major national driver of jobs and economic growth. UK Central (UKC) is fundamental to the long term delivery and success of the Council’s priorities and vision for growth and forms an important part of the Greater Birmingham and Solihull Local Enterprise Partnership (LEP) ‘Growth Deal’ with Government. The LEP’s strategy for growth supports housing provision in areas of growth through unlocking housing land, and the Council will be proactive in supporting this.

1.4 With regard to the evidence in this submission Solihull has,

· comparatively high house values when compared regionally and nationally

· lower levels of social housing when compared regionally and nationally

· high housing need - the Council has used the Localism Act to reform eligibility rules for its Housing Waiting list but demand for social housing is still greater than supply by a ratio of approximately 10:1.

2. Suggested Amendments: Part 1, Chapter 1: Starter Homes

2.1 Point 1 - Solihull Council welcomes and supports the commitment to, and help for, first-time buyers. The Council agrees that helping first-time buyers is an important policy objective.

Recommendation - Solihull has a significant diversity of residential property values within the Borough. Legislation and planning guidance should recognise this and allow for local flexibility in how Starter Homes are implemented. In this way, they can be one form of effective help for first-time buyers.

An example is shown. On the basis of local income data and the approach to housing affordability provided by the DCLG Strategic Housing Market Assessment Practice Guidance (2007), the discounts that are required to make a two bedroom house affordable vary significantly:

Housing Market Area

Value of New Build Two Bedroom House

Percentage Reduction on Market Value to be Affordable

North Solihull Regeneration area

£125,000

0%

Urban

£200,000

30%

Rural

£260,000

46%

2.2. Point 2 - The Bill does not specify whether the Starter Homes discount will be in-perpetuity or for a limited period. There is a potential difficulty between local affordability and a windfall gain for the first-time buyer: if the Council agrees a larger discount to promote affordability but a first-time buyer can sell free of the Starter Home discount after a limited period, the windfall benefit is greater.

Recommendation - The Council therefore suggests that the discount period should be in-perpetuity thereby justifying higher discounts and promoting affordability.

2.3 Point 3 - Helping first-time buyers effectively requires a range of initiatives and this should include not only focusing on new homes but also the second hand market. Helping first-time buyers to buy in the second hand market creates movement in the housing market thereby promoting demand for new build homes from existing home owners.

Recommendation - The Council therefore suggests that help for first-time buyers requires a range of initiatives and incentives and should not focus only on Starter Homes.

2.4 Point 4 - Solihull’s adopted Local Plan has a policy for affordable housing which has been the subject of public examination. The policy takes account of economic viability on a site by site basis and residential development has not been deterred. In the examination of the Solihull Local Plan (November 2013), the Inspector took account of the evidence and initiatives to deliver affordable housing and concluded that the Council’s policy was ‘soundly based, effective and justified’. The approach was considered to be ‘appropriate for Solihull and consistent with national policy’.

In the three year period 2013 to 2015, 160 affordable homes were provided through the ‘Section 106’ process (107 rent and 53 shared ownership). A further 461affordable homes (284 rent and 177 shared ownership) are either in development or have been secured by legal agreement and are expected to be built out over the next 3 years. This is a significant contribution to helping the Council meet its local housing needs and has not prevented development sites coming forward in the Borough.

Recommendation -The Council requires flexibility to meet its local housing needs. Starter Homes should be additional and complementary to existing Section 106 affordable housing approaches and not a replacement of them. The Council accepts that the inclusion of Starter Homes in residential developments will require a revision of its existing affordable housing policy and how many rented and shared ownership homes can be secured through legal agreements.

3. Suggested Amendments: Part 4 Social Housing in England

3.1 The Council is concerned at the potential impact of the provisions which are set out in this part of the Bill. Solihull is a relatively high value area with a constrained land supply. The loss of social housing stock and the difficulty of providing replacements at affordable rents will clearly hinder the ability of the Council to meet its local housing needs.

3.2 The Council is also concerned about the way that the ‘Pay to Stay’ provisions may be framed and the consequent impact on tenants.

There are 5 points which the Council wishes to put forward for consideration:

3.3 Point 1 – Although s64 (2) requires the Secretary of State to consult individual local authorities before issuing a s62 determination of a payment required from the local authority, there is no requirement for agreement between the Secretary of State and the local authority on key aspects of the basis for such a payment. These include the definition of ‘high value’, the estimate of such properties which are likely to become available and the specification of items which may be deducted from any payment. These are all decisions which the Bill reserves for the Secretary of State alone following any consultation with local government representatives under s64(1).

Recommendation - s62 should make provision for agreement on how the policy will operate with affected local authorities (i.e. those deemed to have ‘high value’ homes), taking into account prevailing housing needs and giving consideration to the reasonable scope for the ‘management of assets’ before any determination is made. This would strengthen and extend the scope of s67 which importantly provides for agreement to reduce payments where the authority will reinvest in an agreed / approved way.

3.4 Point 2 - Currently, the Bill is open to the definition of ‘high value’ being at regional level. If this were to be the case then Solihull areas of high values in the regional context would be included with other areas in the region with significantly lower values. Such a definition would not make sense in a local context. For example, if the definition were a house in the top third of values in the region, this may include homes which are not in the top third of values in each local authority area.

Recommendation – s62 should also require that the determination of ‘high value’ is made at the local level with reference to the variation in values between local housing markets

3.5 Point 3 - s65 (6) allows for determinations to make different provision for areas or local authorities. This is important as the policy will clearly impact differently within regions and between authorities within the same region. If the opportunities to replace stock in the area from which they are sold do not occur, perhaps due to shortage or cost of land, then there will be an outflow of value into cheaper areas which may be beyond the boundaries of the selling authority. Also, the stock loss in the ‘high value’ area will not be replaceable.

Recommendation - s62 to stipulate that the value of any sales of high cost homes should be retained within the selling authority and the replacement of any extended Right to Buy properties should be within the authority in which the property which was sold is situated.

3.6 Point 4 - s63 (2) refers to exclusions of properties from the calculation of determinations but is completely open as to what any exclusions may be.

Recommendation - Include a requirement that in determining which properties may be excluded, the Secretary of State should have regard to the impact of removing a property for social or affordable rent in areas with a low number of social sector homes and the scope for local replacement. Further, there should be exemptions of homes provided since 2012 (i.e. following the introduction of self-financing) and properties which have been built or adapted for people with particular needs including older and disabled people.

3.7 Point 5 – The provisions of Chapter 4 of Part 4 the Bill (High Income Social Tenants: Mandatory Rents) leave everything open to definition in regulations, including the definition of ‘high income’ and ‘household income’. There are no stated principles which may influence the nature of the rent regulations, although this of course is the subject of a current consultation.

Recommendation – s75 to stipulate that the definition of ‘high income’ should have regard to average local earnings and that authorities should have flexibility in rent setting to take into account local need and hardship cases.

3.8 Solihull Council confirms that this submission has not been previously published or circulated elsewhere.

November 2015

Prepared 19th November 2015