Housing in the South East

Part of the debate – in the House of Lords at 3:42 pm on 7th June 2000.

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Photo of Baroness Hanham Baroness Hanham Conservative 3:42 pm, 7th June 2000

My Lords, I follow on with congratulations to the noble Lord, Lord Oakeshott. I do not know whether it was his experiences on Oxford City Council that enabled him to withstand the diversion of various Lords a-swirling but he certainly dealt with it with extreme aplomb. That will be a very valuable asset in this House. I congratulate him on the content of his speech. I am sure we look forward to hearing from him in the future.

Housing is, of course, one of the most emotive of subjects, as has already been said, particularly in London and the South East of England where there are enormous pressures.

I know more about London than I know about the South East, so I shall concentrate my short remarks on that area. Perhaps the housing pressures in London are easier to diagnose than to resolve. Some of those pressures and difficulties have been outlined by the noble Baroness, Lady Uddin, who comes from a different part of London from myself, and there are differences in every area.

The housing pressures are brought about for a number of reasons. The first pressure is the high property values that are now prevalent in London. In the Daily Telegraph recently there was an article which was headed "Is property becoming unaffordable?" There is something to be said for that observation. A lot of the property in central and west London is now well beyond the reach of anybody on a reasonable salary. Therefore, a lot of the property is now in the hands of investment companies. A lot of the property is in the hands of companies which are buying it for the purposes of letting it to their overseas staff or buying it so they do not have to use hotels. That property, on an international market, is now virtually inaccessible to anybody who is on a normal London salary. Therefore, a vast slice of property has been removed in that way.

The corollary, of course, to that is that the improvement in that property is vast. We have all been aware that over the years the standard of property in London has deteriorated. But the investment of money within it has now raised the standards beyond the normal reach of most people.

We are therefore driving away people in the middle income bracket, who are unable to live within London. My son has recently invested what must be his every last penny for the next 150 years in buying a small property. It is a major investment that young people are having to make and is well beyond many of them.

It is not only the purchase of property which is becoming impossible for people on middle incomes and young people; it is also the renting of property. We are again in a very high rented market, and we are also seeing within the statutory sector, under the Rent Act provisions, people who are statutory tenants finding that rents are being raised well beyond what they expect and can afford.

The improvement of property affects many areas. There is pressure on property in one area which then begins to affect the adjacent area and there is then a rolling programme of what one could call "the Notting Hill syndrome". There is a move to gentrification. People who can afford property in that area move back, but then people who were previously able to afford that property have to go elsewhere. This again puts pressure on the available property and the affordability of that property.

As we have discussed, people on lower incomes, of course, rely very heavily on affordable housing. As I am well aware, most local authorities can provide affordable social housing, but that is on a variety of tenures. It is very difficult to be able to provide that housing in London now. There are fewer and fewer available sites for housing.

We talk rather glibly about brownfield sites. In many cases now brownfield sites are a good investment. But then we return to the problem of the unaffordability of such property. If the state cannot afford a site then it cannot afford to provide property at a reasonable value and it will not do so. That then puts pressure on us.

There is also the difficulty of who is moving into social housing. Is it the homeless? Of course. But we do not want all our estates made up of people who do not know each other. One of the big problems in the past with social housing has been that very often vast areas of London were cleared for redevelopment. What happens then? People from the waiting list, people off the homeless list and asylum seekers are put into that redevelopment, not one of whom knows each other. There is no community. There was no community from the start. So in big developments great care should be taken with regard to how the tenures are sorted out in order to try and build a community from the outset. But the sites must be available before building can begin.

The general increase in London's population is caused, first, by the immigration of people who come to work here, and, secondly, greater pressure is caused by people who come because London is attractive. It is a mecca to which people come to live and it must now be a great disappointment because when they arrive it is so difficult to find somewhere to live.

I do not bandy figures around very often because I usually get them wrong, but I think the increase in the population of London between 1983 and 1991 was at a rate of about 16,000 a year. Between 1991 and 1998 it was 42,000. It does not take very long to rack up the sort of figures that SERPLAN talks about as the requirement for new properties when you work on that basis.

What do we do about it? It is easy to stand here and explain the problems, but what are we going to do about it?

I understand that VAT is still charged on brownfield sites and is not charged on greenfield sites. Not only is it charged on brownfield sites but it is also charged on anything that is developed on brownfield sites. This seems to me to be a nonsense. It must be one area that needs looking at. The encouragement must be, of course, to develop within the city if we can. But that also increases once again the value and the cost of property.In the public sector, local authorities, local health authorities and private developers must work together. We are clearly well past the days when local authorities can work on their own. They need to work in co-operation and co-ordination with others. By doing that they will achieve the mixed tenure about which I spoke.

To include a percentage of affordable housing in each development is not easy. We tried it in Kensington and Chelsea. We said that a certain proportion of every site had to consist of affordable housing. But land costs made that almost impossible to deliver. We have achieved that on some sites, but we have to accept that we will have to provide it elsewhere on others. The "elsewhere" is the problem. It is very difficult in London.

I think that probably even more emotive than issues regarding the green belt are issues regarding the provision of housing. As I said in opening—and I agree with much of what has already been said—housing is probably the one security that people need. To have a secure home is an essential. Not everybody has a secure home. It is becoming less and less easy to have a secure home. I think that central London will be the worse for it. If we cannot resolve some of these problems, we will be left with an investment city. I do not think that anybody really wants that. I do not think that housing should be traded, if I can put it that way. We need to find a way to resolve the problems of housing, but property values at the moment are making life extremely difficult.