Housing: New-build Homes — Question

– in the House of Lords at 11:29 am on 31st October 2013.

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Photo of Lord Dubs Lord Dubs Labour 11:29 am, 31st October 2013

To ask Her Majesty’s Government what action they are taking to increase the number of new-build homes.

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

My Lords, this Government are building more affordable homes, helping people to buy new homes and reforming the planning system to make it easier for developers to build new homes of all types. Housing supply is at its highest since the end of the unsustainable boom in 2008, with 334,000 new homes built over the past three years. Housing starts and loans to first-time buyers are up by a third on last year.

Photo of Lord Dubs Lord Dubs Labour

Will the Minister comment on two propositions? First, I am bound to say in all humility that my figures do not agree with hers. Since the coalition took office, housebuilding has been lower than under the previous years of the Labour Government. Further, if, as under the Help to Buy home ownership scheme, money is to be made more easily available for purchases but there is no significant increase in supply, prices are bound to go up without anyone benefiting. Is that not nonsense?

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

It is worth making the point in response to the noble Lord that, despite the Labour Government having a target of 240,000 new dwellings a year in England when they were in power, housebuilding across England and Wales under his Government fell to its lowest peacetime rate since 1924 by 2009-10? As for his point about the Help to Buy mortgage guarantee scheme, it is ensuring that people who are unable to fund the high deposit rates are able to buy property. Once you take out London and the south-east, house prices in most places around the UK are going down.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

My Lords, although I welcome the Help to Buy scheme for first-time buyers, is the Minister aware that there is a great need for small units—ideally one-bedroomed units designed for people who want to leave large homes—whether they are built privately or by local authorities? It would free up a huge number of properties if more accommodation of that type was developed. Will be Government do something to encourage such development?

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

The Government’s approach is driven by need and by local communities being in charge of deciding what is built in their areas, rather than the top-down approach that has been taken in the past. During the past few years, we have been ensuring that any new development that may have been stalled but which can provide the kind of new accommodation to which my noble friend refers receives support to get that new construction under way.

Photo of Lord West of Spithead Lord West of Spithead Labour

Is the Minister content that there are sufficient married quarters in the right places for our military? If not, are we building new ones?

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

The noble Lord moves to a specific area on which I do not have information, so I will have to write to him.

Photo of Baroness Maddock Baroness Maddock Liberal Democrat

My Lords, my noble friend will be aware that the borrowing restrictions on local authorities in the United Kingdom are far more stringent than those on local authorities in many of our neighbouring north European countries. When will the Government look seriously at altering the public sector borrowing requirement, because changes could be made that would greatly assist our local authorities in building more new affordable homes?

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

We certainly encourage local authorities to use their assets and the borrowing power that they already have. Not all councils are borrowing up to their cap, but the cap is important because it is part of our larger strategic objective, which is reducing the overall deficit, so it is not possible at this time for us to lift the cap on local authorities.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government)

My Lords, the Minister will be aware of an NAO report on the new homes bonus that found that the Government had got their sums wrong. Assumptions were unreliable, unrealistic and contained a substantial arithmetical error. It found little evidence that the bonus is increasing approvals for housing. It said that the Government were not monitoring the impact of £1.3 billion of taxpayers’ money and that the new homes bonus was unfair in its distribution. The PAC has called for an urgent review of the new homes bonus. Will the Minister support that?

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

As we made clear yesterday, and as was always the case, we are already reviewing the new homes bonus scheme; that report will be published next Easter. The most important thing to say to the noble Lord is that we are disappointed in the NAO’s report because it seems to miss the point of the new homes bonus. It is there to do what is says on the tin: to reward councils that help to build more new houses. That is what we are trying to do. We want to make sure that those local areas that build more houses attract and receive the benefit of doing so in their area.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, will my noble friend make sure that for those taking part in Help to Buy, particularly young people, strict criteria are applied on the affordability of the mortgages? When interest rates go up to their normal level, there is a chance not only that the value of properties will fall but that payments will rise spectacularly. Is she sure that the scheme is being run in a way that will not force youngsters into negative equity, with mortgages that they cannot pay?

Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston The Parliamentary Under-Secretary of State for Communities and Local Government

I am very sure, as the arrangements in place are very rigorous. As my noble friend will be aware, the Bank of England will monitor the scheme and, importantly, the criteria used to judge whether somebody can afford their mortgage will be as robust as they need to be. This is an opportunity presented to people who do not have access to the bank of their parents or family and who, if they could have more help putting down a deposit, would be able to own their own homes. That is a good thing.

Noble Lords:

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