My Lords, first, I join other noble Lords in congratulating my noble friend Lord Smith of Leigh on securing this important debate on the availability and affordability of housing. Secondly, as usual in these debates, I refer the House to my declaration of interests, in particular the fact that I am a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.
It is accepted that we are in the midst of a housing crisis, with people being let down on every front. As the noble Baroness, Lady Neville-Rolfe, said, to lower prices we need to increase supply. We have the lowest levels of home ownership for 30 years, and the homelessness crisis on our streets is a scandal. If you walk to this House from any of the nearby mainline stations such as Charing Cross, Waterloo or Victoria, you will be met with people living on the streets. If you arrive at Westminster Tube station and go to the entrance to the Palace, you will usually be greeted by a rough sleeper. In the fifth-richest country in the world, in one of the richest cities in the world, that is truly shameful.
The Government did put the Homelessness Reduction Act on the statute book before the election, but they have provided completely inadequate sums of money for local government to deliver on its obligations. The cap on housing allowance, and the pressures that brings, means that more and more people are becoming homeless. Councils are housing over 75,000 families in temporary accommodation, including over 118,000 children. The situation is scandalous, and damaging to families and children and their development.
The noble Lord, Lord Bourne, who is not in his place today, has on many occasions expressed his determination to sort out the broken housing market, as have his friends the Secretary of State for Communities and Local Government and the Prime Minister herself, as did her predecessor. But the actions, no matter how well intentioned, have not delivered on the stated aim of fixing the broken housing market. The Government are clearly under pressure and struggling to find a way forward.
Just look at where we have got to in recent times. The Housing and Planning Act must rank among the worst, most ill-thought-out legislation promoted by any Government in recent years. Some of the more contentious measures were either formally dropped or lost in the department as the reality of implementation dawned: pay to stay and the forced sale of council housing, to name but two. We come then to the housing White Paper, the build-up to and crescendo of which never quite matched the reality. Then there is the recently announced housing Green Paper. It is fair to say that had we started with the Green Paper, the solution would never have been the Housing and Planning Act. We need more homes built across all tenures.
It is a laudable aim to want people to own their own home, but I wonder if there should be greater focus from the Government on building more homes. We need to consider carefully the serious problems with schemes such as Help to Buy, which overheated the market making homes even more expensive, rather than building more homes for sale.
I recall the debates on the Housing and Planning Act with the noble Baroness, Lady Williams of Trafford. We could never get a clear idea of the cohort that would benefit from the Starter Home programme. It never appeared to me to benefit the classroom assistant, the nurse, the teacher or the small business person. I agree with many of the comments of the noble Lord, Lord Kirkham, when he called for the building of more homes.
It is not councillors on planning committees or planning departments holding up development, but the problem of land that could be built on not being built on by the developers. Hundreds of thousands of planning permissions have been granted and not a brick has been put down. That highlights the problem, as the noble Lord, Lord Stunell, said. But planning departments are underresourced and action needs to be taken, as nationally set planning fees mean that council tax payers are subsidising planning services. That really needs to end, as my noble friend Lady Young of Old Scone said.
I have told your Lordships before that I grew up in council accommodation. I will always be very grateful to Southwark Council for providing my parents with a council flat, and then a council house, that was warm, safe and dry and at a rent my parents could afford. My parents worked until they retired and they paid their taxes. They did not own a car when we were young, but could afford to take us on holiday every summer and pay for us to go on school trips. We were happy and able to take up the opportunities that were available to us. That was the benefit of council housing. It liberated our family and enabled us to get on. The right reverend Prelate the Bishop of Chelmsford referenced this in his remarks. I am the eldest of four children and we are now all home owners.
The Government must do more to support real affordable housing in the public sector at social rents. In London and other cities, the affordable rent product promoted by the Government is unaffordable, as my noble friend Lady Donaghy said. I hope that the Chancellor of the Exchequer will lift the cap on borrowing for local authorities for social housing. It really is needed to help tackle the broken housing market, not just for young families but for older people who want to downsize to a smaller property. There is a looming problem in sheltered and supported housing that the Government need to get a grip of, as my noble friend also said.
The private rented sector works for many people, and there are some excellent private sector landlords who provide homes that people want to live in. But there are also many problems with the rogue elements of the private rented sector, and much more needs to be done to solve this, as my noble friend Lord Smith of Leigh referred to.
I want to pay tribute to the work being done in Newham by the mayor, Sir Robin Wales, and his team. In 2013, Newham became the first local authority in England to require mandatory licensing of all private sector landlords operating in the borough. The scheme expires at the end of December 2017, and Sir Robin and his team applied to the Government for permission to continue it for a further five years. The figures in the first five years are quite startling. Newham has initiated 1,217 criminal prosecutions against landlords, recovered over £3 million in unpaid council tax and banned from operating 28 of the worst landlords. The police have made 745 arrests for a variety of offences during licensing operations, and £300,000 of housing benefit fraud has been detected and stopped. What Sir Robin and his team are doing is making a real difference: tackling rogue landlords, driving up standards, protecting private sector tenants, recovering unpaid council tax and detecting benefit fraud and other criminal activity, including slavery. The Government should be supportive of the excellent work being done by Sir Robin and Newham Council and look at ways that they can support this forward-thinking authority and encourage other local authorities to develop similar schemes. I am not sure if the noble Lord, Lord Young of Cookham, is aware of this scheme or has been to Newham, but I know he would get a very warm welcome there—perhaps we could go together.
There are two other issues affecting the private rented sector that we need to see some action on. The first is client money protection. Following on from the Housing and Planning Act, a working group was set up, chaired by my noble friend Lady Hayter of Kentish Town and the noble Lord, Lord Palmer of Childs Hill. The consultation closed in October 2016 and the report was published on
Secondly, we have the ban on letting agent fees, such as inventory fees, tenancy review fees and agent admin fees. For tenants who are often forced to change homes every year, these charges cost hundreds of pounds of money that they do not have. The CAB reported recently that 42% of renters had to borrow money just to pay their fees, and that is on top of rent deposits. The ban was announced in the Autumn Statement in 2016 by the Chancellor of the Exchequer. It then appeared as a pledge in the Conservative Party manifesto and was announced in the Queen’s Speech on
Our housing association sector, whose very ethos is about people living in decent homes that they can afford, is struggling with a lack of investment in homes for social rent, so it has worked to deliver other forms of ownership and then cross-subsidised those with the lowest rents. The mandatory rent cut has taken £3.9 billion out of the sector business plan so far, as the noble Lord, Lord Stoneham of Droxford, mentioned. The sector needs certainty so that it can develop with confidence and play its part in delivering the homes that we need.
I also fear that the Government operate in silos. Housing benefit is now well over £20 billion a year. The Government find themselves in a perfect storm but refuse—for reasons that I hope the noble Lord, Lord Young of Cookham, will explain when he speaks—to tackle this with the urgent action needed. Home ownership is at an all-time low. Social housing is under pressure. The borrowing cap needs to be lifted so that more homes can be built. There is huge pressure in the private rented sector, with rents in certain areas rocketing, and the market is overheating. Housing associations, housing co-ops and other alternative providers are frustrated by the Government’s failure to allow them to deliver what is needed. There has been a failure to deliver even small things that have been announced by the Government, such as client money protection and the ban on letting agents’ fees.
It could all be so different. Lifting the borrowing cap would enable more homes at a social rent to be built. Whenever we have met the challenge of housing before, the public sector has had to play its part. That would help with the housing benefit bill and it would also take some of the heat out of the private rented sector, which would also help with the housing benefit bill. If the Government switched their strategy and looked at how we can shift some of the vast sums of money we spend on and with individuals into actual bricks and mortar, that would also have a positive effect on the housing benefit bill, as well as on family well-being, enabling families to thrive. That would have a positive effect on the home ownership market too. I very much agreed with the comments of the noble Lord, Lord Horam, that we need positive action from the Treasury on these matters.
I grew up in a council house and I rented in the private sector when I was younger. Today, I am a home owner. That is quite a normal aspiration for anyone and a positive outcome and something that government policy should enable to happen. But despite everyone seeing that as a reasonable way to proceed, the Government, for ideological reasons, have to date refused to take the big steps needed.