Clause 3 — Guidance

Prayers – in the House of Commons at 11:46 am on 9 January 2015.

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Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee, Chair, European Scrutiny Committee 11:46, 9 January 2015

I beg to move amendment 1, page 3, line 3, at end insert—

‘(3) Guidance issued by the Secretary of State to authorities under subsections (1) and (2) shall only be issued after a statutory consultation period of not less than three months.”

I seem to be doing a bit of overtime today, but I do so in the spirit of debate, discussion and dialogue, and to probe some of the matters inherent in this important Bill.

Clause 3 deals with guidance:

“A relevant authority must have regard to any guidance issued by the Secretary of State when exercising any function conferred or imposed by or under section 1 or the Schedule.

An authority mentioned in section 2(2)—” that is pretty much any kind of local authority one can imagine—

“must have regard to guidance issued by the Secretary of State when exercising the duty imposed by section 2, including guidance about identifying functions affected by the duty.”

My amendment proposes a further provision for clause 3. It is a simple proposal that would require statutory consultation of not less than three months, and the guidance issued by the Secretary of State would be given only after that consultation period. The type of guidance issued by the Secretary of State under section 3 might be broad, as might the range of situations that may need guidance. Vanguard councils are experimenting with registers, willingly and voluntarily, which will be important. In a nutshell, it would be a good idea to consider having a statutory consultation period of not less than three months to accompany those arrangements.

My proposal is very simple and one that needs to be well considered. All I need say in conclusion is that I regard the amendment as an opportunity to discuss and debate the question. I am happy to listen to the arguments other hon. Members put forward.

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk

I am grateful for the opportunity to speak to the amendment tabled by my hon. Friend Sir William Cash, which would require statutory consultation before guidance was introduced.

When I originally drafted the Bill, I considered whether there should be consultation before the guidance, and whether it should be statutory. It is worth saying to my hon. Friend that the Bill is quite thin and will work satisfactorily only with guidance—he is right to identify that guidance is an important component. My hon. Friend alluded to the reason for that: the range of authorities that are planning authorities is very wide.

The Bill does two things: it requires planning authorities—the Bill calls them “relevant authorities”—to keep a register; and it requires them to have regard to that register when exercising their statutory functions, whether that is planning, housing, the disposal of land or regeneration. The range of authorities that are planning authorities is wide. For example, an inner-London borough is a planning authority, but so is a national park. In a rural area such as South Norfolk, a rural district council, as we called them in the old days, is a district council and therefore a planning authority. It is not possible to imagine a set of rules or guidance that would be applicable equally to an inner-London borough and a national park. What it might be reasonable for us to expect of a planning authority in a mixed rural and urban area with plenty of land to show that it had had regard to its register, it might be unreasonable for us to expect of a planning authority in a dense inner-London borough that has much greater land availability problems. For different reasons, it might not be reasonable for us to expect the same thing of a planning authority such as a national park. Any guidance would therefore by its nature be varied, depending on the circumstances.

My hon. Friend mentioned the role of the vanguard councils. He is right that they are crucial. With a small pot of money from the Department for Communities and Local Government, they are experimenting and establishing what works best in terms of establishing and operating a register. The vanguard councils are doing voluntarily and willingly what will in due course become a duty for all councils. The idea is that all councils that are faced with the new duty—the duty to operate a register and to have regard to it—can learn from the vanguard councils about the best way to set up and operate a register, and integrate the running of the register with the council’s planning, housing, land disposal and regeneration functions.

It would be wrong to be over-prescriptive and to place new burdens on councils, especially given that the vanguard councils from which much of the learning will come are at an early stage. I have no doubt that in due course as the Bill is implemented, it will be sensible in most cases for the Department to consult local planning authorities of different types, depending on the nature of the guidance it wishes to issue in different cases. It would particularly be worth consulting vanguard councils, which will have valuable experience to share. That is the point of the vanguards.

My hon. Friend’s proposal to turn the consultation process, which I am sure will happen, into a legal obligation with a statutory three-month consultation period would inevitably create more inertia, which is precisely what the Bill aims to cut through. The aim of the Bill is to start to unblock the logjam of housing supply by allowing customers more say over what they want rather than leaving them little choice but to accept what a big developer tells them they want. The underlying philosophical drive behind the Bill is that if we build more houses as if customers matter, we will end up with more houses, which is what the nation so badly needs. The aim is most definitely not to create yet more process and inevitably more delay, which I fear statutory consultation would do.

I understand my hon. Friend’s concerns, but I hope he will agree that statutory consultation is not necessary and consider withdrawing his amendment.

Photo of Lyn Brown Lyn Brown Shadow Minister (Communities and Local Government)

I thank Sir William Cash for his interest in the Bill and for his speech.

As hon. Members know, the Opposition support the Bill and see no reason to support the amendment in that form. We are convinced by the points made by Mr Bacon and are content with the Bill.

Photo of Brandon Lewis Brandon Lewis Minister of State (Communities and Local Government)

I, too, thank my hon. Friend Sir William Cash for taking an interest in the Bill and for working to ensure that the Bill is as strong as it can be. He suggests that there should be a statutory consultation period of three months before any guidance is issued by the Secretary of State. I thank him for raising the important issue of consultation and guidance, and for giving me the chance to explain the Government’s position, which I hope I can.

I know from the experience of our right-to-build vanguards that it is important that any national framework for the register is sufficiently flexible to reflect the considerable differences—my hon. Friend Mr Bacon outlined the differences—in the scope for custom build in different parts of the country. It is important that we seek the views of a wide range of interested parties, particularly when we are establishing the detailed framework, but I am not convinced of the need for a statutory consultation period before the issuing of guidance. I am afraid that the Government cannot support the amendment.

Statutory consultation can have a valuable role, but it is not necessary or desirable for every Government action. When used unvaryingly, it can have a detrimental impact on policy and create significant delays. That is not to underplay my understanding of the point that my hon. Friend the Member for Stone makes—I acknowledge his point.

In many instances, the Secretary of State may issue guidance to local government without being required to consult local government and other partners before doing so. For example, we are not statutorily required to consult on national planning policy guidance. In the case of the Bill, we believe that statutory consultation would only delay the implementation of the custom and self-build register that the Bill seeks to establish. The explicit requirement in the amendment for at least a three-month consultation period seems excessive, especially given that our current consultations on planning policy matters are normally around six to eight weeks, which gives local authorities and others sufficient time to respond.

My hon. Friend’s amendment would also mean that the Government must consult for a considerable period on even minor revisions to the guidance, which would clearly add unnecessary bureaucracy. Arguably, it would increase the burden on local authorities. My hon. Friend wants neither of those things and we strongly want to avoid them.

To deal with what my hon. Friend desires, local authorities have been key influences in the development of the policy, as we have demonstrated through the right-to-build vanguards. My hon. Friend the Member for South Norfolk outlined how important they have been in the development of the policy—I will return to that on Third Reading, which will I hope will happen shortly. We fully intend to maintain this close link with local authorities and other partners in implementing this policy, including in drawing up the guidance.

With those few words of explanation, I hope my hon. Friend feels reassured enough to be able and willing to withdraw his amendment.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

I have listened with enormous care to what the Minister has said and to the shadow Minister. My intention from the very beginning has been to make sure that the Bill has proper consideration and that it receives all the assistance it needs to get through. I have every confidence that that is exactly what will happen, and I congratulate my hon. Friend Mr Bacon on his proposals. In the circumstances, having listened to the arguments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Third Reading

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk 12:00, 9 January 2015

I beg to move, That the Bill be now read the Third time.

I am grateful to the House for its consideration of my Bill. I should point out that there was a technical amendment in Committee to change the long title, but that was merely to bring it into conformity with the published Bill’s aims on Second Reading, which were narrower in scope than the long title I presented on First Reading. For the record, therefore, I feel I should state that the long title now refers to a Bill

“To place a duty on certain public authorities to keep a register of individuals and associations of individuals who wish to acquire serviced plots of land to bring forward self-build and custom housebuilding projects and to place a duty on certain public authorities to have regard to those registers in carrying out planning and other functions. “

I shall be brief, as the Bill has been discussed thoroughly at previous stages. There was support for it from hon. Members on both sides of the House on Second Reading and in Committee. Other than the technical amendment to the long title, no amendments were made.

I am delighted that there is political consensus in favour of the Bill. The Minister responsible for housing and planning, my hon. Friend Brandon Lewis, who is my parliamentary neighbour, and the shadow housing Minister, Emma Reynolds, have spoken in support of the Bill. I am glad to see Lyn Brown in her place. The shadow housing Minister would have liked to be here, but she has other commitments. However, she has been very supportive of the Bill. If we can agree the Bill today, and it gains a fair wind in the other place and reaches the statute book, we will have done a great deal of good for the prospects of self-build and custom house building in this country.

The Bill will require local planning authorities to maintain a register of individuals, or groups of individuals, who wish to acquire a serviced plot of land on which to build a home of their own. Local authorities will then be required to consider the demand for custom build on the register when they, for instance, develop their local plans, regenerate their town centres or old industrial sites, or dispose of surplus public land. I want the register, over time, to become an established mechanism for helping to determine local housing need, similar to the affordable housing register. The register will also form the bedrock of the Government’s proposals for a new right to build, which the Department for Communities and Local Government consulted on last year.

The Bill has been drafted to allow flexibility in the detailed operation of the register to take advantage of the Government’s work in testing the right to build. The Government’s consultation and practical experience with 11 right-to-build vanguard local authorities will inform the final statutory framework for local registers through the detail of the regulations set down by the Secretary of State.

The rationale for the Bill is compelling. We all know that there is considerable latent demand for custom and self-build. We also know that many people want to build their own home, but they are unable to do so, or they find their plans obstructed by the unavailability of suitable land. By helping local authorities to have a better understanding of the local demand for custom and self-build, and then to have regard to that demand in exercising their planning, housing and regeneration functions, the Bill will start to encourage more land to be brought forward for custom build, thus unlocking the huge latent demand for custom and self-build that we know exists.

We will be able to put into action some of the lessons available to us from successful projects, such as the new custom-build communities in the Netherlands, and in other European countries where custom build and self-build are much more common than in the UK.

As the founder of the all-party group on self-build, custom and community housebuilding and place-making, I was particularly pleased last summer to lead a delegation to Berlin to see the successful delivery of a wide range of low-cost collective custom-build projects, which show that it is possible at scale to develop highly desirable options for affordable renting using the custom-build approach. Indeed, it was partly as a result of the Berlin visit that our all-party group assumed its current name. We should have no doubt that involving local people much more closely in developing the housing they want has enormous power to help transform communities.

I offer my particular thanks to the team of officials in the Department for Communities and Local Government, who have done so much to help me with the Bill. I offer my personal thanks to the Clerks in the Public Bill Office, who have been enormously helpful. I also thank all the Members of Parliament who served on the Bill Committee and who have taken an interest in my Bill.

I offer special thanks to Ted Stevens and Michael Holmes of the National Custom and Self-build Association and to the television presenters Kevin McCloud and Charlie Luxton, who have all supported the all-party group’s work during the last year and who have helped to create the environment in which the Bill is seen as the natural next step.

The Bill is not an overnight solution for all the challenges we face in our housing market, but it is an important step towards a world in which we routinely treat the building of houses as if customers mattered. By unlocking the latent demand for custom and self-build, my Bill will help to diversify the market. Most fundamentally, custom and self-build have an important role to play in improving the quality of our newly built environment. We need to build more high-quality homes that are more spacious, that more closely reflect the wishes, hopes and dreams of the people who will live in them, and that are more energy efficient and sustainable. My Bill will help all that to happen, and I commend its Third Reading to the House.

Photo of Andrew Bingham Andrew Bingham Conservative, High Peak 12:08, 9 January 2015

I was unable to be present for Second Reading, and this speech would probably be more appropriate to a Second Reading. However, the debate took place on a Friday when I was tied up in my constituency.

I want to talk a little about self-build and to promote it based on my own experience. In the early ’90s, I moved house and bought a bungalow that had been built by a self-build group. When I moved in, it quickly became apparent that the quality of the build was way in excess of that of a lot of the other property on offer in and around High Peak at the time.

As we settled in, we noticed certain things. Everything was done to the finest quality. The point about a self-build is that the people who build it build it for themselves. We had bought the property off a member of the original self-build group, and the chap who lived next door was also part of the group. In fact, when I was looking to plant a new hedge at the front of the bungalow, he came out and advised me that the leylandii I was putting in were not quite close enough together and that we did not want anything doing on the cheap on this estate, thank you very much. It is ironic, when I drive past that bungalow, which I moved from some years ago, that the hedge is still standing, and it looks fine and pristine, so I stand by my claims about it.

My neighbour spoke to me about self-build, which I did not understand, and told me that he was involved in another self-build project elsewhere in the High Peak. He suggested that I might like to get involved, as I might want to move to another house and it was a way of moving up the property ladder. I duly went along to the first meeting of the new self-build group, which was put together by a quantitative surveyor who had run the group that had built the bungalow in which I was residing. I remember clearly that we met in a pub, which suited me at the time, in Marple. There was a collection of people I had not met before. As we went around the room, we were asked what we could bring to the group. There was an electrician, a bricklayer, a joiner, a plasterer—all the trades. It was with a little embarrassment, when it came to my turn, that I revealed that my only formal training was as a chef, perhaps creating some anticipation of me brewing up on site. However, I spoke to my late father, Tony Bingham, who was an electrical engineer. Between us, we said that we could contribute to the electrical side.

The QS had identified a piece of land and would do all the planning applications and so on. There were about nine or 10 of us in the group, so there were to be nine or 10 houses. There was a discussion about who would have what plot. In any collection of houses, there is probably one plot that is more preferable than the others. We talked about design and it was agreed that lots would be drawn to decide who would have what plot. There was a clear understanding that we would not just work on our own house—if I was having

7 Acacia avenue, my father and I would work on all the houses of Acacia avenue, not just my own. That was the way it would work, which struck me as an excellent idea.

This was in the early 1990s, when property prices were escalating at quite a fast rate. In some ways, there are echoes of today. There were a lot of easy mortgages around in those days—we could have a separate debate on that—but self-build was a way for people to get on to the property ladder by using their own skills. My father and I were going to do the electrical work. I live in a village called Chapel-en-le-Frith, which is in the High Peak. It is very much a community area with people I had gone to school with, so my old school friends were involved in the group. There was a real sense of teamwork and camaraderie, and the QS oversaw the whole project. It is a great way of pulling people together to build properties.

My hon. Friend Mr Bacon made a point about quality, so let us talk about the quality of the properties that will be built. A self-build group or consortium that is building a set of houses of all the same quality is not going to build for themselves houses unless they are of the best quality. Some take part in self-build groups because they can contribute to building a house that is beyond what they could afford to buy on the open market. They may live in the house for many years or they may trade up very quickly. If they are building a house as part of a long-term residential plan, they will not scrimp and do things on the cheap—it will not be all hardboard and plywood. The quality of the build of my house was excellent. At the meeting in the pub in Marple, everybody was clear that they would not scrimp and save, because they were building their own homes. There has been some discussion on the quality of homes that are being built and can be built. One of the many advantages of self-build is that we will get top-quality houses that will last, hopefully, for hundreds of years. That will increase the general quality of our housing stock.

The Minister may well have visited the BRE Trust in Watford, which undertakes research on buildings and the environmental and energy costs of running them. It has done some fantastic work. When I visited a couple of years ago, I was shown a house for which energy costs were—I think, from memory—about £50 for the whole year. Self-build trusts have a lot of discussions about what is on the market to help to reduce energy and heating costs, and £50 a year is phenomenal. I do not think there is anybody in the Chamber or in the country who would not like to heat and warm their house for £50 a year—I think we would all jump at that. Self-build groups can be a vehicle for many of things the BRE Trust has looked at—heat source pumps and so on—to reduce energy costs. A developer who is building many houses may not wish to do that, because of costs and profit. There is nothing wrong with that, but there is an element of “belt and braces” that comes with building one’s home. If there is an energy-saving device that will drastically reduce energy costs—whether a solar panel, heat source pump or technology that is in its infancy—one will consider using it. When it is put into the house, it is there for ever. As well as driving up the overall quality of the houses we are building, self-builds can help the environmental agenda.

Self-build has a great part to play and the Bill, promoted by my hon. Friend the Member for South Norfolk, gives it real teeth and legitimacy. That is why I support it. I still cast my mind back and remember the self-build. It is a fabulous way to get on to, and move up, the housing ladder. This was a way for people to use their skills, whether they were a joiner putting in the doors and window frames or an electrician, with the QS overseeing the purchasing. There will always be issues with a consortium of people. We all know in this place that when there are large groups of people with different opinions we have to satisfy everybody and pull them together. Every self-build group will have such challenges. One member might want a particular design while another member might want another design, but they are bonded together by one thing: to build the best quality house they can. Their skills will not cost them money, just time, so they will build better and, hopefully, more environmentally sound houses for them, their children, their children’s children and our future. More self-build will drive up home ownership, which I am very keen on. Through right to buy, Help to Buy and so on, the Government have done some great things to enable first-time buyers to enter the market. People may be first-time or second-string buyers, but self-build is another way to get people to enter the housing market. With money harder to come by today, it is a great way of enabling more people to get on to the housing ladder and have better quality housing.

This is a commendable Bill. We should support, help and promote self-build. Many people are still not aware of it. I was unaware of it all those years ago until I was approached. We must do more to advocate it. It will not be without its problems—things in life rarely are—but it is a great way of moving forward. I support the Bill.

Photo of Lyn Brown Lyn Brown Shadow Minister (Communities and Local Government) 12:18, 9 January 2015

I congratulate Mr Bacon on all the work he has put into the Bill and on getting it this far. I know just how hard that can be, having sat a number of times on private Members’ Bills in the previous Parliament, in particular on the Communities Bill, which took an awful lot of effort and time. I can only imagine the kind of effort he has had to put in to get us to this stage. I also commend him for achieving cross-party consensus. The Opposition are very supportive of the Bill.

If passed into law, the Bill would create an opportunity, for those seeking a plot of land for a new self-build or custom build home, to register their interest with their local authority. The local authority would then have regard to the register in developing its approach to housing and the local plan. We are supportive of this approach, because we think it essential that a range of measures be deployed to tackle the current housing crisis.

We are building half the number of homes we need to keep up with demand, and over the past years we have seen the lowest levels of house building in peacetime since the 1920s. As a result, home ownership continues to decline and is now at its lowest level for 30 years. A record number of young people in their 20s and 30s are living at home with their parents, while 9 million people are living in the private rented sector with little security or stability and facing increasingly unaffordable rents and poor standards.

The Lyons review set out a comprehensive plan for how the next Labour Government will tackle this crisis and get at least 200,000 homes built a year by 2020. A clear conclusion of that review was that we are overly reliant on a small number of builders and we need much more diversity in the housing market. Custom and self-build can be a part of that diversity.

Earlier this year, my hon. Friend Emma Reynolds, who apologises to the hon. Member for South Norfolk for not being here today, set out Labour’s plans to boost home building, including measures to support custom and self-build and a register, as proposed in the Bill. Our hope is that as well boosting the level of custom and self-build, we will see an increase in take-up among those on low to middle incomes as a result of having such a register. Custom build should be an option for all those who want their own home—not just for a wealthy few.

In many other countries, the housing market is made up of a much more diverse number of builders, including self and custom builders. This often means the output in house building is much higher, while the homes are also attractive and of good quality—essential if we are to win the support of communities across the country for new homes in their local areas. While the Bill stops short of proposing the fundamental change needed, as set out by Labour, to tackle the housing crisis, it proposes concrete steps that will help boost the self- build and custom house building sector. The Bill is to be welcomed and the hon. Member for South Norfolk is to be congratulated on it. I wish him further luck with it.

Photo of Brandon Lewis Brandon Lewis Minister of State (Communities and Local Government) 12:22, 9 January 2015

I start by endorsing the cross-party harmony and join Lyn Brown in congratulating my hon. Friend and neighbour Mr Bacon on introducing the Bill. He has carried it through to this stage with his usual passion and individual flair—including mince pies in Committee, which I am still working off on my training bike. It is a testament to my hon. Friend’s passion as well as the necessity for legislation that the Bill has been received so positively across the parties in this House. I am particularly pleased about the cross-party consensus on the Bill’s aims, which will help to give the custom build sector further impetus across the country, and I especially welcome the Opposition’s support.

We had a good debate on Second Reading and in Committee, so I shall not go into too much detail on the Bill’s content. If the House will allow me, I will take a few minutes to explain why the Government support the Bill so strongly and how it will help to take forward our proposals for a new right to build.

The Government are committed to increasing housing supply and helping more people achieve their aspiration of owning a home of their own. When we came into office, the housing market was stalled. In fact, we inherited from the last Labour Government the lowest level of house building since, I think, 1923, which puts things into context. Prospective buyers could not get mortgages, and developers were not building. We have spent the last four and a half years fixing it, and we can see that our efforts are paying off.

I appreciate the comments of the hon. Member for West Ham on the Lyons review and the aspiration for 200,000 homes to be built. I shall come on directly to the number of homes in a few moments, but let me politely point out that this is the third target that Labour has set in the last 12 months. I will be interested to see where the level falls to the next time Labour announces a housing target.

The facts are that we have seen 500,000 new homes built since April 2010 and the number of starts on new homes last year totalled 139,500—up by 15% on the previous year and the highest number since 2007, which should provide some context. The construction industry, furthermore, has been hiring at the fastest rate since 1997. I am sure that my hon. Friends will have seen that the number of first-time buyers is at its highest since 2007, according to a Halifax review published just this week. That is proof that our policies, such as Help to Buy, are working.

We can see light at the end of the tunnel, but there is still more to be done. We want to increase house building rates further and encourage improved standards of design and sustainability. I believe it is through greater diversity in our housing market that this can be achieved. With more competition, more new entrants and more new development, we will increase the speed and, importantly, keep, develop and improve the quality of house building in respect of build, construction and design.

Our volume house builders play a vital role in our housing market, but we know that there is no “one size fits all” model for our market. As the economy and the construction industry recover, we want to see more small and medium-sized builders back in the market. We know how important they are. In addition to their role in increasing the supply of housing, they provide local jobs across the country, as Members will know. They provide a more personalised product and services for local people, and they strengthen the capacity of the house building sector more broadly. They are the reason for the changes in planning terms for small sites, which we announced just before Christmas and they are direct beneficiaries of this Bill.

We are already actively supporting the small and medium build sector. Our support for smaller builders through our £500 million “Get Britain Building” investment fund for smaller builders’ work has already helped to deliver thousands of new homes and to commence work on a further 12,000 sites. We have opened our £525 million builders finance fund to small and medium builders to deliver schemes as small as five homes. Again, that could benefit directly from the Bill and the work behind it.

However, we want to look at more innovative ways of diversifying the market such as the custom build sector, which leads me directly to why we are all here today. I strongly believe that custom and self-build housing can play a central role in securing greater diversity in the housing market and help us to deliver the homes people need. We know we live in a country where there is high demand for custom and self-build. That could be met by the small and medium building industry, as I have outlined.

According to research by the Building Societies Association, one in three people in the UK is open to building their own home, and 1 million people want to build their own home in the next year alone. In fact, according to the website PlotSearch, January is apparently the peak time for subscribers to plot-finding services. It is no surprise that this high level of interest exists; custom build can be cheaper, greener and better designed than conventional market housing.

As I mentioned on Second Reading, a report published by the Lloyds Banking Group in 2013 concluded that self-builders can save between 20% and 25% on the cost of the equivalent home on the open market. According to the National Custom & Self Build Association, a typical three-bedroom home costs just £150,000 to build. It is interesting to think about some of the available options. Just before Christmas, I visited my hon. Friend the Member for South Norfolk in his constituency to visit Beattie Passive, a Norfolk company that showed us how it works. If I recall correctly, it let me have a go at trying to build one of the homes that it can supply. The kit can be supplied for somebody to build their own home at a cost of just £7,500. That makes house building, and custom house building in particular, affordable at a level that people often do not realise is available to them. For many custom and self-builders, the key advantage is the potential for more energy efficiency than can be achieved in typical developments. The Beattie Passive homes are a good example of that. Home owners who can influence the end product tend to have a longer-term interest in their properties, which may result not only in more energy-efficient homes, but, frequently, in better design and increased investment in the community. In fact, custom and self-build residents remain in their homes for about 14 years longer than the average resident.

Despite the advantages of custom building in diversifying the market and producing high-quality, sustainable homes, the market is stymied at present. Custom build currently accounts for only about one in 10 homes in Britain, just over 10,000 a year. That is a far lower proportion than we see in the United States and in other European countries. I think that the state of the market is caused by three main barriers: the limited availability of land, limited access to finance and advice, and the problem of red tape.

Since 2011, the Government have worked with the industry to overcome those barriers and develop the custom building sector. We want to double the output of the sector over a decade, so that well over 20,000 homes a year are built. I have been talking to finance houses—in fact, I did so only this week—about how we can make finance more accessible to those who wish to develop and build their own homes.

We are already encouraging the provision of more land through the planning system. Since 2012 councils have been required, through the national planning policy framework, to assess and plan to deal with the need for housing, including the requirements of those who wish to build their own homes. We have identified 12 Government-owned sites, which have been released for custom and self-build development by the Homes and Communities Agency.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

The Minister has just mentioned the national planning policy framework. As he knows, today I am due to present a Bill that touches on that issue in a variety of ways, and in a fairly investigative fashion. Does he agree that, whatever instructions may or may not have been given to the Whips in respect of that Bill, it will be possible for us to continue our discussions about the planning and land implications of the NPPF at some future date?

Photo of Brandon Lewis Brandon Lewis Minister of State (Communities and Local Government)

Absolutely. I am always happy to continue any discussion with my hon. Friend, and that certainly applies to discussions about how we can ensure that our planning system is fit not just for today but for tomorrow. My hon. Friend’s intervention gives me another chance to make the point that local authorities who are making plans for housing provision in accordance with the NPPF should concentrate on what housing is appropriate for and required by their areas, and that custom building should form part of that.

Developers have already been selected for six of the 12 Government sites. They include the award-winning Trevenson Park site in Cornwall, which Igloo Regeneration is currently developing. The Park Prewett site in Basingstoke is the largest of the custom building sites in the programme, and will generate 1,250 new and affordable homes. We can see the potential for more custom building in sites such as Ebbsfleet and Bicester. Yesterday I visited Brighton and met representatives of KSD Housing, which has a fantastic “modular build” proposal that could work well in the custom building sector as well. It could provide a very good model for the delivery of, in particular, affordable housing in the future.

I mentioned my visit to the constituency of my hon. Friend the Member for South Norfolk to see the housing built by Beattie Passive. That company has also built homes in my own constituency—council homes. It is great to see, under this Government, the first council homes to be built in Great Yarmouth for a very long time. Beattie Passive is able to work with the custom and self-building industry not just to deliver homes, but to teach people how to build their own homes. It enables them to develop new skills as well as new houses. That is important because, although we all enjoy watching great programmes such as “Grand Designs”, many people do not realise that custom building and self-building can be affordable. It is not necessary to have a lot of money in order to build a home; indeed, it is possible to buy a home-building kit for £7,500. The Bill does a great deal to make people more aware of the options that are available.

We are working to improve access to finance for all who are involved in custom and self-build. Following on from previous funds, earlier this year we launched a £150 million five-year serviced plot investment fund to finance up to 10,000 plots. We are also exploring with lenders how we can increase the number of custom and self-build mortgages. More lenders are already offering self-build loans, and gross lending on self-build is predicted to increase this year to £1.9 billion annually. It is clear from our discussions with lenders that the more that this sector develops, the easier it will be for them to assess it and ensure that mortgage funds are available. They are very interested in the sector.

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk

Will the Minister take this opportunity to commend Mr Stephen Noakes, who is the chair of the Council of Mortgage Lenders and the head of mortgages at Lloyds Bank? He has not only supported the work of the all-party parliamentary group on self-build, custom-build and independent house building, but has demonstrated a sustained commitment to developing mortgage products for the self-build sector.

Photo of Brandon Lewis Brandon Lewis Minister of State (Communities and Local Government)

I am happy to commend Mr Noakes. My hon. Friend has made a good point. Lloyds, Nationwide—whose representatives I met this week—and, indeed, other finance houses are very interested in this market, and want to see it grow. It is obviously a challenge for them to make assessments and provide funding on the basis of those assessments, but they are also keen to ensure that the market is as de-risked as possible, so that their finance can be as affordable as possible for consumers who wish to build their own homes.

Advanced technology and advanced manufacturing may provide one solution. If the National House Building Council and other organisations recognise that if a property carries a lower risk, it will be a better lending proposition for mortgage companies. Another solution is the provision of land specifically for local planning purposes—the Government sites that I mentioned earlier are an example of that—so that mortgage companies can focus on a particular area rather than adopting a scattergun approach. All those measures would help the market to develop. The more the market develops, the more secure it becomes, and the better the prospects become for lending and the affordability of lending.

We are actively reducing the amount of red tape. Self-builders are already exempt from the community infrastructure levy, and last year we announced additional changes to section 106 affordable housing contributions. Those changes have the potential to save custom and self-builders many thousands of pounds.

We are continuing to work closely with the National Custom and Self Build Association. I join others in congratulating the association, and thanking its members for the excellent work that they have done in promoting the sector. We are also working with others in industry to increase the amount of information that is available to consumers. The online self-build portal should be the first port of call for anyone who is interested in custom and self-build. I am sure that it will provide more information and advice this year, and that that will be enormously helpful to all who are interested in custom and self-build but lack the experience or confidence to embark on a project. We can see that those polices are having an impact. According to the National Custom and Self Build Association, more than 5,000 new plots are in the pipeline. However, if we are to achieve our aim of doubling the size of the sector over the next decade, we shall need to go further.

We believe that the main barrier that is stopping more people from building their own homes is the lack of suitable plots of land. That is why, in the autumn, we engaged in consultation on a new right to build that would give prospective custom builders the right to a plot of land from their local council for the first time. The consultation set out our vision for that right. Eligible prospective custom builders will be entitled to register with their local planning authority for a suitable, serviced plot of land on which to build or commission their own homes. The demand on the right to build register for custom build will be taken into account in the preparation of local plans, so that there are appropriate planning policies for the provision of enough plots of land for custom build. Registered custom builders will be offered suitable plots of land—with planning permission—for sale through the local planning authority, at market value.

Many prospective custom builders, local authorities and members of the custom building industry, as well as other professional bodies, have contributed to our consultation, and we are now considering all the responses. We are working with 11 local authorities to test the way in which the right to build will work in different contexts throughout the country. I want to clarify that our intention is to legislate for the full right to build in the next Parliament. This is a new area of policy that requires careful consideration and we want to make sure that we get it right. The Bill is an important part of this process.

The role of local authorities in bringing forward land is particularly novel and needs further consideration, and we want to make sure that the right forms an integral part of the planning system. It must support the local plan making process and existing planning designations. This will continue to prevent inappropriate development and protect precious landscapes such as the green belt. That is why we are proceeding carefully and will ensure that the views from the consultation and the vanguards inform the full legislation for the right to build. However, this Bill will legislate for the first element of the right, namely that local authorities will be required to establish registers of custom builders in their area.

I will explain our proposals for the register. First, the register will be a useful indicator of the scale and nature of demand for custom build in each local area. It builds on national planning policy by putting the requirement on a statutory footing—something I know Opposition Members fully support. It will also collect valuable information on the precise nature of this demand. By asking what size of plot, what location and what price range, local authorities and the custom build industry will be more able to respond to demand for custom build.

The register will also become a useful tool in the making of local plans. Many local authorities have been proactive in planning for custom and self-build, as national planning policy requires. However, as Minister for housing and planning, I know of aspiring custom builders who have contacted me as their local authority is not planning to meet their needs. By creating the register and creating this statutory duty, we will improve the local plan-making process so it meets the needs of custom builders. We must ensure that there is enough transparency to allow the information on the nature of demand for custom build to be used by the custom build industry, while, obviously, the data of individuals are well protected. The register will be useful in this way only if it demonstrates actual local demand for custom build plots. Local authorities should be confident that those on the register genuinely intend to build or commission their own home and consequently have the financial means to do so—which touches directly on the point my hon. Friend the Member for South Norfolk made a few moments ago.

This is why we are proposing that eligibility criteria be set out in the regulations that flow from this Bill. That will ensure that local authorities have the right to reject an applicant, should they fail to meet these eligibility criteria, and be confident that applicants will not waste their valuable time and energy. Local authorities should also have the power to remove individuals from the register in certain prescribed circumstances, to ensure that it remains an accurate and reliable source of information.

Of course, we are keen to allow a necessary degree of flexibility. There are areas of the country, such as areas of low demand, where the local connection test is counter-productive. We want the register to help develop affordable custom build housing and propose that individuals can register through registered providers.

The Bill will require that local planning authorities publicise their register. Custom builders must be aware of the register if it is to provide information on the nature of demand. The Secretary of State has the power to issue guidance to ensure that registers are adequately publicised. How precisely the register is publicised will be at the discretion of the local authority, once this guidance is taken into account.

We are currently testing how the custom build register and the entire right to build will work in practice with 11 vanguard local authorities across the country. There was a high level of interest from local authorities to pioneer the right to build. I believe we are now working with some very innovative local authorities who are a great example across the country. I particularly appreciate the diversity of authorities that submitted expressions of interest.

These vanguards are committed to establishing registers and making suitable plots available to those on the registers. They vary in location from Teignbridge to Oldham. They vary in size of project from thousands of units to single figures. They vary in context from cities, such as Sheffield, to national parks, such as Exmoor and Dartmoor. They also vary in experience. Every single vanguard brings something new to the table.

I also want in particular to mention South Norfolk, the local authority where my hon. Friend’s—he is the owner of the Bill—constituency lies. It shares his passion and is getting other authorities and institutions involved in custom build. I am sure that we will see much more custom and self-build demand met in that area in future. Its work alongside neighbouring local authorities, including with the Broads Authority, is an excellent example of co-operation in more complicated administrative areas.

All these vanguard projects will help design the right to build that we will legislate for in the next Parliament. However, they will additionally inform the regulations for this Bill, and I am pleased to say that all the vanguards intend to have custom and self-build registers, like those that this Bill would require, online this month. The vanguards will also give us a greater understanding of the resource requirements of the register. This experience will inform the regulations of this Bill to ensure that the costs of the register are proportionate and not burdensome on local taxpayers. In case anyone is concerned that we have somehow “forgotten about London”, we are working with the Greater London authority to test the feasibility of a pan-London register.

Our experience with the vanguards and the responses to the consultation will help us to ensure that the right to build supports the development of affordable housing as well, and I have outlined today the £7,500 example from by Beattie Passive. We want the right to build to support the development of affordable housing.

I am pleased to say that there are examples that demonstrate that this is possible across this country. Many registered providers have produced affordable housing and shared-ownership schemes through custom build, such as Coastline Housing in Cornwall. Some of our vanguards are working with registered providers to bring forward custom build development in this way. Custom build affordable housing offers a unique approach to shared ownership as the level of finish that the homeowner takes responsibility for can give them a greater equity share and help get them more firmly on the property ladder. I saw a direct example of this with a housing association I visited in the constituency of my hon. Friend Chloe Smith just before Christmas.

New affordable housing solutions are one result of the diversity that custom build and this Bill will bring to the market. If we look to Berlin, we can see how much further this could go. The building groups of Berlin, formed of ordinary citizens, have come together with support from the local government, and have now produced thousands of homes, many in the last five years. If we look to Holland, we see another model of custom build development for urban extensions. I have touched on yet another model that could significantly improve build-out rates, which custom build opens up. Advanced housing manufacture harnesses technology to increase the speed of construction without sacrificing design. It is used worldwide to support housing delivery, but is a relatively small industry in this country. Custom build is the perfect part of the sector to see it develop and to benefit from it. Nevertheless, housing groups, such as the Accord Group in Birmingham and others I have mentioned, are taking the lead in developing the advanced housing manufacture industry, and they can produce a wide range of high-quality and environmentally friendly timber frames, and specialist insulation and innovative techniques that can be put up in just one day, as I have seen for myself.

I have explained how custom build could change the housing market with our support. This Bill will put in place the legislation for the first part of the right to build, allowing individuals wishing to build their home to register with their local authority for a suitable plot of land. As such, it builds on national planning policy and guidance which already requires local planning authorities to identify and plan for local demand for custom build in their local plans. I hope, following the outcome of the consultation and the experience of the vanguards, that we will be able to bring forward legislation in the next Parliament to implement the full right, giving registered custom builders the opportunity to be offered a suitable plot of land for sale through their local council.

With that in mind, and clearly with the support of the entire House today, I congratulate my hon. Friend the Member for South Norfolk again. I am more than happy to support and endorse this Bill.

Question put and agreed to.

Bill accordingly read the Third time and passed.