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Social Housing - Motion to Take Note

Part of the debate – in the House of Lords at 12:16 pm on 31st January 2019.

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Photo of Baroness Bloomfield of Hinton Waldrist Baroness Bloomfield of Hinton Waldrist Conservative 12:16 pm, 31st January 2019

I too join my noble friend Lord Porter in thanking the noble Lord, Lord Whitty, for using the Opposition-day debates to focus on this important and topical subject.

It is clear to us all that successive Governments have not done enough to build more affordable and social housing since the stock was depleted by the right to buy. With only three minutes, l am going to focus on the present and ways in which the Government could create a more sustainable model for the provision of social housing than currently prevails.

There are three elements to the cost of housebuilding: the land, construction and the profit margin. As the costs of both land and construction have escalated, profits—the incentive to build—have declined. When those are added to the many problems within the planning system, it is difficult to see how the Government will meet their target of building 300,000 new homes per year without both a new financial model and changes to the planning system.

The London Mayor Sadiq Khan’s worthy but ill-advised aim to require 50% of new homes built to be affordable or social makes the finances of a scheme completely unworkable and has resulted in a 23% decline in housing starts.

Of the three component costs, we must find a way of reducing the cost of land and ensuring that public land is used for future social housing needs, particularly in London, where 80% of boroughs report that access to social housing for their homeless clients is very difficult. I do not see an argument for subsidising or fast-tracking land acquisition by the private sector in return for an increased proportion of social housing. This merely leads to a perpetual housing shortage and escalating rents.

If the aim is to provide genuine social and affordable housing, then public land should be treated as the Crown Estate treats its land—as a long-term asset which is managed and looked after for long-term benefit, in this case of the community. It can be used for the provision of housing, and the nomination rights of who can occupy this housing should remain with the local authorities or housing associations.

A potential model is that of a community trust partnership. This model is based on using long-term institutional funding—say 25 to 35 years—to provide multi-tenure housing in urban and metropolitan areas. The CTP would bring funding and expertise to assist a local authority to develop land that it already owns. However, the local authority would retain ownership of the land, guaranteeing a return to the investor over the long term in the form of rents, retaining enough income to cover maintenance and fees. The CTP would not need to allocate a majority of housing for private sale; rather, it would enable a balance between private first-time renters, affordable rents for key workers and social housing.

Finally, to address the component of construction costs, I direct noble Lords to the conclusions of the Science and Technology Committee in its excellent report on offsite manufacture for construction. The Government have a welcome presumption in favour of this in the construction sector deal. Benefits include faster delivery; better quality, lower cost, low-rise buildings; fewer labourers; increased productivity; improved sustainability of buildings and infrastructure; and less disruption to communities.

I hope that the Government’s commitment to offsite manufacture will be backed up by specific measures enabling this sector and its pioneering technology to flourish here and abroad, whilst at the same time introducing welcome competition to the housebuilding industry.