Homelessness and Mortgages

Part of Opposition Day – in the House of Commons at 3:45 pm on 16th November 1992.

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Photo of Simon Hughes Simon Hughes Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Environment, Food and Rural Affairs) 3:45 pm, 16th November 1992

I will not give way again, because I hope that the answer was not only comprehensive but that it will allow the hon. Gentleman to understand our policy and not distort it.

Conservative policies of the past 13 years have resulted for many in homelessness or old, cold and damp housing, and, worse in recent years, the increasing risk to those who have bought that their homes will be repossessed over their heads. That blight affects all parts of the country and people of all ages and backgrounds. Whether I talk to my hon. Friends the Members for Caithness and Sutherland (Mr. Maclennan) and for Orkney and Shetland (Mr. Wallace), who are from one of the most remote parts of the north of Scotland in rural Britain, my hon. and learned Friend from rural mid-Wales, the hon. and learned Member for Montgomery (Mr. Carlile), my hon. Friends from the south-west, whether in citiies such as Bath or Truro or in rural communities such as north Conwall and north Devon, my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton), or my colleagues on the council in the London borough of Southwark, the problem is essentially the same. There are queues of people who cannot be housed and queues of people who, although housed, do not think that they will be able to stay in their housing either because it is unfit or because they fear that they will not be able to keep up the payments for the home which they have been persuaded to buy.

Young people and others on the streets of cities such as London are the most visible victims, but there are many other invisible victims of the housing crisis. Today, my colleagues and I want to show that there are in this House people who understand the severity of the crisis and who believe it possible, given the political will and within the term of one Parliament, to ensure that the goals expressed over the years are achieved and that everyone in Britain has a home at a price he or she can afford.

I shall deal briefly with the record. How many houses are there; are we meeting the need? The statistics are clear. The most recent figures on house building starts and completions were issued by the Department of the Environment in November this year. They show that starts in Great Britain in the past 10 years have decreased from 194,000 to 160,000—lower than ever before. Completions have fallen from 175,800 to about 167,000—lower than ever before.

The National Council of Building Material Producers, in its October bulletin on the state of the building industry, says: There are ominous signs that the industry is now moving into a deeper recessionary phase and that the situation is very much worse than had been anticipated in our February survey. The autumn state of trade survey reflects the appalling state of the construction industry. The number of jobs in all parts of the industry has fallen too. Since July 1989 the Federation of Master Builders has lost 260,000 construction workers. A quarter of the skilled work force is out of work, and apprenticeships are down by 50 per cent.

We are not building the necessary houses, and on current projections there is no prospect of our doing so.

What has happened meanwhile to the number of people wanting property? The most objective statistics are those for households accepted as homeless. Record numbers of such households exist. In England, in the second quarter of 1992, there were 34,840. In London, in the second quarter of 1992, 9,400 households were accepted as homeless and there were more than 10,000 in other English metropolitan areas. In the same period 62,780 households were in temporary accommodation—6,500 more than a year ago; 11,000 households were in bed-and-breakfast accommodation.

Last year more than 150,000 households in the United Kingdom were accepted as homeless, and about 1,250,000 were on waiting lists. Probably another 750,000 households need somewhere, but are staying with family or friends on settees or on floors. The census carried out a year ago counted just under 3,000 people sleeping rough, and at the same time a quarter of the housing stock is deemed unsuitable for human habitation, as defined by an Act of Parliament introduced by this Government.

England, Scotland and Wales exhibit similar characteristics. Increases between 1979 and 1989–91 are recorded in all three countries. In 1979, in England, about 55,000 were accepted as homeless; in 1987, the relevant figure was 109,000; and in 1991, 150,000. In Wales, the figure rose from between 4,000 and 5,000 to more than 6,000, and, in Scotland, from 7,500 to more than 10,000. These are not just statistics: they are people and families among the most vulnerable groups in society, and we all too regularly hear tragic stories of people in just such categories as these.

Of course, during the eighties, many people took the Government's advice and bought. They decided to avail themselves of mortgage interest tax relief and became owner-occupiers. What has happened to them? So far, 1992 has been—and is likely to continue to be—the worst year for house price reductions since records began. The transaction volume—the number of properties bought and sold—is the lowest since 1974, when far fewer people owned their homes.

Mortgage rates and mortgage repayments are low—no doubt the Minister will tell us that they are the lowest for 20 years—but, with the fears surrounding the prospect of purchase today, many people now will not buy.

The worst fear is that of unemployment. According to every projection, official unemployment is soon likely to rise to well over 3 million and people are not likely to buy if they do not think that they will have the money to pay for their house. They fear that the house price will fall below the value of the mortgage. One in five of the people who bought during the past five years now owns a property which is worth less than they paid for it. That is hardly a good investment, although one that has been explicitly encouraged by Tory policies.

As of June, according to the most recent report of UBS Phillips and Drew, there were 1·5 million households in the debt trap, which is one seventh of all households with a mortgage. The Bank of England estimates that 1 million people are in that position and have an average debt of more than £6,000 on their property.