Housing Associations - Question

– in the House of Lords at 11:30 am on 8th February 2018.

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Photo of Lord Shipley Lord Shipley Liberal Democrat 11:30 am, 8th February 2018

To ask Her Majesty’s Government what assessment they have made of reports of the loss of 93,820 housing association homes for social rent between 2012 and 2017.

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, I remind the House of my entry in the register of interests and beg leave to ask the Question standing in my name on the Order Paper.

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

My Lords, the coalition Government secured more social housing by prioritising homes for affordable rent over homes for social rent. This enabled more than 357,000 new affordable homes to be built since 2010. We are providing more than £9 billion of funding for the affordable homes programme to March 2021 and £1 billion housing revenue account borrowing freedom for local authorities. This will support social landlords to build more affordable homes including homes for social rent.

Photo of Lord Shipley Lord Shipley Liberal Democrat

My Lords, I thank the Minister for his reply. He will be aware that the loss of housing association homes for social rent reported at the end of last week reflects in part a move from social rented homes to affordable rents but also the sale of some housing association homes. We have been waiting for the Government’s Green Paper on social housing for many months. When is that Green Paper due? Do the Government actually believe in social housing?

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

Of course the Government believe in social housing, which is why, as I said in my reply, more than £9 billion has been allocated to it. In the last seven years, more affordable homes have been built than in the last seven years of the last Labour Government. We are committed to more social housing. The Green Paper on social housing is expected in the spring.

Photo of Lord Bassam of Brighton Lord Bassam of Brighton Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, with some 40% of council homes that were sold under right to buy now owned for rent by private landlords, does the noble Lord not agree that the sale of council houses has ceased to be a policy promoting low-income home ownership and that it would be wise, given our shortage of affordable homes, to suspend right to buy and allow sales only if they can be replaced on a like-for-like basis?

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

The stock of social housing fell by 420,000 under the last Labour Government. More council houses—social houses—were sold than built. We have reversed that: more social houses are now being built than sold and the stock has increased by 86,000 since 2010. The receipts from right to buy are reinvested in social housing. Far from the policy of generating receipts disadvantaging those on the housing list, by generating more receipts for local authorities to reinvest it increases investment in social housing.

Photo of Baroness Grender Baroness Grender Liberal Democrat

My Lords, does the Minister believe that there is a crisis in this area, given that last year saw more homeless children than we have seen in a decade? Does he recognise that it is hard to believe that this Government see it as a crisis if expenditure is 79% on private housing and 21% on affordable housing? As he well knows, “affordable” is not really affordable for families on low incomes.

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

The noble Baroness will know that, for any given sum of public investment in housing, you can build either more houses at slightly higher rents or fewer houses at slightly lower rents. In 2010, her party and mine decided to go for the higher-output option. That was the right decision at the time to make faster progress in adding to the stock of good-quality, permanent homes for rent. In October last year, the Prime Minister announced an extra £2 billion for affordable housing and made it clear that a big chunk of that should be redirected towards social housing, as the noble Baroness suggests. We have listened to the representations from housing providers. The £2 billion will be available for social rents as opposed to affordable rents, and by lifting the cap on what local authorities can borrow we are enabling local authorities to build more council houses.

Photo of Lord Best Lord Best Crossbench

My Lords, the Minister knows that tens of thousands of affordable homes have been produced by requiring the housebuilders to include a percentage of affordable housing in all their big new developments. He will also know that over recent years the housebuilders have found a loophole—the so-called viability test, a specious argument—to renege on those obligations. Can he reassure the House that the Government are going to close this loophole, which is just a scam to enable the housebuilders to get out of the agreements that they have already made and increase their profits?

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

The noble Lord makes a valid point. We are concerned at the way in which certain housebuilders use the viability test to reduce the percentage of homes on their sites for social housing. We are reviewing the viability test with a view to increasing the original intention on these sites to have a fixed percentage of social housing units.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Opposition Whip (Lords), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Housing)

My Lords, I refer the House to my relevant interests in the register. Does the Minister agree that the loss of more homes for social rent, as outlined by the noble Lord, Lord Shipley, is making a difficult situation even worse, and that as people move into more expensive rental properties the taxpayer ends up paying more for the increased housing benefit bill for those tenants who claim that benefit at the higher cost?

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

No, I do not agree, for the reason that I gave a few moments ago. Houses built on affordable rents are available at roughly 20% below market price, and of course housing benefit is available to help those on low incomes to pay the rent. As I said a moment ago, you have a choice to make: you can get either more houses at slightly higher rents or fewer houses at slightly lower rents. We went for the option to build more houses. On the noble Lord’s final point, he keeps reminding us of his connection with Lewisham as an elected councillor of that borough. He might like to know what Sir Steve Bullock, the Mayor of Lewisham, said about our housing policies:

“This specific cash injection for affordable homes will allow the Mayor of London, boroughs and other partners to carry out and extend ambitious plans to properly tackle the capital’s housing crisis”.

I hope the noble Lord agrees with his colleague.