Clause 6 — Modification or discharge of affordable housing requirements

Part of Growth and Infrastructure Bill (Programme) (No. 2) – in the House of Commons at 6:15 pm on 17th December 2012.

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Photo of John Redwood John Redwood Conservative, Wokingham 6:15 pm, 17th December 2012

The Government are right to be concerned about the poor volume of house building that they inherited and that has continued for the past two and a bit years. It is right that they need to facilitate more development of more or less any kind. It will, by definition, be affordable because people will now build houses only if they can see a purchaser or tenant with reasonable security.

I have difficulty with the amendments proposed by Mr Raynsford. He and I would probably agree that we need more affordable housing of all kinds in this country. The biggest shortage is probably in affordable housing for sale. A large number of people would like to own their own home. It is one of the tragedies of the current situation that people in their 20s and quite a lot of people in their 30s are no longer able to obtain a large enough mortgage to afford the prices of homes in many parts of the country. We therefore have a new generation of people who do not have the access to home ownership that previous generations have enjoyed and taken advantage of.

That has come about because of a mighty land and property price bubble, generated primarily by the mortgage excesses of the previous decade and, to a lesser extent, by the capitalisation of the subsidies that the Government tipped into the housing sector to try to keep pace with the inflationary bubble that the banking and monetary policy was creating. We are using public money to chase a bubble, which makes it very difficult to get affordable housing to people. The public money then does not go around as far as it should, because land and property prices are so high.

How are we going to break into that conundrum? The Government are trying many things. They are trying to get a freer flow of mortgage money and cash to people at cheap prices, so that they can afford more. They are also working on the supply side to try to puncture the land bubble at a sensible rate, so that all homes become more affordable.

The danger with concentrating on so-called affordable homes for rent in the public sector is that, as the right hon. Member for Greenwich and Woolwich says, there is a big lottery element to it. If one was born in the right village or has lived in the right village for long enough, one might qualify for such property, but if one has moved around too much or has lived in a different village, there is no such opportunity. The lottery element is one problem with what the right hon. Gentleman is suggesting.

The right hon. Gentleman said that affordable homes would always be available, but of course they will not, because they will mainly be lived in by the people who first get them. Those people might decide to live in them for 20, 30, 40 or 50 years, so they will not be available to anybody else because they will be providing family accommodation to those people. We might say that that is fine, because that is the purpose of such homes, but they cannot both fulfil the intended role for the family who are lucky enough to get them and be available to a family that does not have them.

That leads to a distributional problem, because if somebody who takes on a heavily subsidised affordable rented house becomes very successful, we rightly do not tell them that they have to leave. That means that someone quite rich and successful can be living in a heavily subsidised house, which does not seem fair. It is better to move to a system of subsidising people rather than properties, by giving them income support and the means to achieve what they need—a house to buy, a flat to rent or whatever. It is subsidising property that has got us into all these awful arguments, and it is sending the wrong signals and drying up the market in all sorts of ways. There are not enough affordable properties, and an awful lot of developers are being put off.

I hope that the Minister will build on the ideas that are currently in circulation to allow some development to take place, and that he will not allow previous plans from better financial times to prevent that development. I hope he will consider the two important points that I have made—that it is surely better to subsidise people in need than particular homes, which can lead to the maldistribution of results both geographically and by individual; and that it is surely better to work on the land market, because it must be our ultimate aim to have a land market at prices that people can afford. Thanks to the mortgage and subsidy boom of the previous decade we are a long way from that, with the result that many of our constituents cannot access the housing that they need and would like.