Affordable Housing (South Gloucestershire)

– in Westminster Hall at 11:00 am on 29th June 2004.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 11:00 am, 29th June 2004

The Minister will have done his homework. He will know that this is not the first time that a debate with this title has taken place in this Chamber. I secured such a debate in November 2001, because after four and a half years as a Member of the House, I found that the lack of affordable housing to rent or buy in my constituency was one of the most significant problems brought to my attention by my constituents, week in, week out. I wish that I were not bringing the same subject back here today, but I make no apology for the fact that I am doing so, because the problem remains very serious for my constituents and not enough progress is being made. If anything, the situation is worse for my constituents than when I first raised the issue.

I want to link two closely related aspects of the lack of affordable housing. We use that term to mean houses that people can afford to rent and houses that people can afford to buy. Different groups of people are affected, but the issues are closely connected, as the Minister knows.

In south Gloucestershire, just over 5,000 households are on the council waiting list and 500 households are accepted as homeless each year, give or take a few. The statistics on trends are difficult to interpret because the council cleared out its housing waiting list numbers, which means that they have been volatile, but even in 2002–03, well over 1,000 households were added to the council's waiting list. The problem is very significant.

As the Minister knows, the council undertakes its own housing needs surveys, the most recent of which was in 2003. To show the scale of the problem, the council has calculated that if every house that is due to be built in the remainder of the local plan period up to 2011 were an affordable house, the waiting list still would not be cleared. That is the scale of the problem; if every house were an affordable house, people would still be waiting for affordable housing. In practice, the number of affordable houses provided will be a fraction of that amount.

There is a massive problem with affordable houses to rent or to buy. The rate of owner occupation in south Gloucestershire is high in comparison with the rate nationally. Not only have average house prices risen substantially in south Gloucestershire—up 74 per cent. from a typical £92,000 in 1999 to a typical £160,000 in 2003—but those at the bottom end of the market have risen even faster. Those are the houses in what is called in the jargon the lower quartile—the starter homes. The price of the properties to which people in search of an affordable home are looking have gone up from a typical £62,000 in 1999 to a typical £115,000 in 2003. That is an increase of 85 per cent.

That situation affects young people in south Gloucestershire who are in work and want to leave home and buy a house. In the relevant period, their wages have risen by roughly a quarter on average, but the price of starter homes has risen by 85 per cent. Those people are desperate to get a foot on to the housing ladder, which has a knock-on effect on the council's waiting list.

The council told me this morning that a third of the households accepted as homeless in south Gloucestershire in the past year were working households. One may entertain a mental picture of the people who are accepted as homeless, who may depend on benefits or have lost their job. Yet a third of the people accepted by the council as statutorily homeless are in work. In other circumstances, they would have been buying their home, but because the housing market has gone crazy, that is not an option for them.

I am sure that the Minister is an expert on housing and that in his constituency, at the other end of the micro-scale, he is as much visited as I am by people with housing problems. I shall not go into too much detail on any case, but I have spoken to expectant mothers housed in first-floor maisonettes who have to lug a young child in a pram up the stairs to the first floor when they are seven months pregnant. It is totally unacceptable that people live in those conditions. I meet adults who sleep night after night, month after month and year after year on the sofa or the floor because their accommodation is overcrowded and there is nowhere else for them to go. I come across marriages that have broken up, mental health problems and disrupted education, all of which are the human face of the statistics that we will discuss today.

It is rare to hold a surgery without seeing someone with a housing problem. Every Friday night after my surgery, I go home and thank God that I do not have such a problem. I know how much I value secure, permanent accommodation for my children and my family, as I am sure the Minister does, yet thousands of people in south Gloucestershire simply do not have such security. They can sometimes get into temporary accommodation, but may then have to wait years before permanent accommodation becomes available in the area in which their children go to school or in which they have family networks. That is a source of misery to thousands of my constituents. The problem is not going away; if anything, it is getting worse.

Clearly, there are things that councils can do. When I raised this issue in November 2001, the then Parliamentary Under-Secretary for Transport, Local Government and the Regions, Ms Keeble, said that the council should ensure that more of the houses that are built are affordable. I agree. She failed to appreciate, however, that much of the house building in south Gloucestershire is not infill building, but the building of dirty great estates and thousands and thousands of houses. A problem with that approach is that developments such as Bradley Stoke or Emersons Green require massive amounts of infrastructure. In effect, the council is telling developers, "We'd like a primary school, a road junction and maybe a play area and a community hall. We'd also like subsidised transport. Oh, and we'd like 30 per cent.-plus affordable housing." The developers say, "Well, you can have some of that, but you can't have all of it."

It is true that a local authority that is making marginal increments to housing stock can be really go in hard and demand high levels of affordable housing, but a local authority that is absolutely strapped for cash or near the bottom of the funding league tables—we can argue about the numbers—is in a weak position to demand very high levels of affordable housing if it is also trying to secure a large amount of infrastructure. That is an obvious tension.

I am pleased that my Liberal Democrat colleagues on South Gloucestershire council want a target for affordable housing in new developments not of 30 per cent., but of 40 per cent.—a target with which I believe the Labour group is sympathetic. I would like progress to be made along those lines, but that target is massively removed from the reality of what is actually being delivered. A tiny fraction of the new housing is affordable. The 40 per cent. target is almost a fantasy figure. The proportion that is actually being delivered is a tiny fraction of that level.

The council is also considering reducing the scale of development to which the rules would apply, and it is starting to insist on quite small developments as well as the large ones. Some argue that the developers will not be able to make enough profit if the target is 40 per cent. I do not accept that argument. We have to get tough with the developers. Huge amounts are being made from building houses in south Gloucestershire, but not enough of the right sort of houses are being built at the right sort of price for the people who live there.

The council has a responsibility in this matter, and I pay tribute in passing to those in the local authority who work to address people's housing needs. That is not a job that I would want to do; having to tell people year in, year out that the council is continuing under the right-to-buy scheme to sell off far more houses than the housing associations are building. Between 1998–99 and 2002–03, the number of houses in the area under local authority control fell by about 250, while the number of houses under housing association control rose by only 100. Right-to-buy sales are not being replaced by housing association properties on the necessary scale. The supply is falling while the demand grows. Demand is rising because young families cannot afford to leave their parents and buy a first home and because of family breakdown. Demand is rising all the time, yet the supply seems to be shrinking.

What can central Government do? Clearly, central Government determine the amount of the money that the subsidised housing sector in the region receives. I gather that growth in Government support has been slower in the south-west than in other regions, yet the housing situation in the region is arguably one of the worst in the country, as the ratio of house prices to earnings is about 7:1. I gather that that is arguably as bad as the situation in London, and worse than anywhere else. Across the south-west as a whole, wages tend to be relatively low, but house prices have been rather high. I am sure that the Minister will tell us of the millions, hundreds of millions or billions of pounds that are being committed, promised or whatever. I hope that they are being committed, and I hope that they will deliver. All I can say is that on the ground over the past seven years, I have seen the problem getting worse and not better.

I talked to the local authority about what would help it, and it is keen to look at ways of promoting what it calls an intermediate housing market—something between the extremes of pure renting and pure buying. There are already examples of such an approach, including shared equity schemes and so on, but the authority has given me some examples of where someone can be delivered off the waiting list for less subsidy than a traditional council house would require.

It is possible to rent at below the market rent with some subsidy allowing people to save money for a deposit so that they can buy somewhere. That gets people off the housing list, but does not cost the full subsidy of a council house. A shared equity property is another option, where people pay the interest on the mortgage but might not pay any rent to the social landlord. That is cheaper than a subsidised council house, but it gets someone off the waiting list.

My local authority would be keen to promote such schemes and to be innovative. One of the problems is that it is quite resource intensive to offer every individual a whole menu of options involving different combinations of renting, buying, subsidy, equity and so forth. I believe that the local authority is in the process of putting in funding bids to get support to tailor housing solutions to individual need. If authorities can offer something other than pure social renting, pure council housing or pure housing association provision, the subsidy can spread further and deliver more houses for the same amount of public money. I would be grateful for any encouragement from the Minister on that front.

My local authority would welcome greater powers over empty properties. The Minister will know how grievous it is for a homeless family to know that empty properties are sitting empty month after month, year after year, not only in the public sector, but in the private sector. The authority would be interested in the power of compulsory leasing for long-term empty properties.

The council is keen to see private renting encouraged. In south Gloucestershire, the current situation is likely to discourage private renting for two reasons. First, housing benefit processing remains slow. Obviously, the council needs to sort that out, but it is a disincentive to private landlords.

I do not know whether the second problem is a nationwide one, and would be grateful for the Minister's comments. My local authority says to people who are coming to the end of a private sector tenancy, "Do not move out. If you know that your tenancy is up in a month or two months, and your landlord says that they are going to sell up and that they don't want to renew your tenancy, we are not interested until you absolutely have to leave. Do not go when they ask you to, do not go when they tell you to, wait until there is an eviction notice and they have taken you to court to force you out. Then we will treat you as homeless." As there is nowhere to put such people, they are made to stay for as long as they possibly can, well beyond the point where they might reasonably have moved out. Landlords are coming to me saying, "This is a disgrace. We are being encouraged to rent properties to people and then we cannot get them out at the end of the tenancy, because the council is telling them to stay put."

I know why the council is saying such things; there is so little property into which people can be moved that if someone physically has a roof over their head, the council has to accommodate them for one less night. That is a desperate situation. It is unfair on the tenant and the landlord, and for that matter the council. Is the Minister aware of that situation, is it happening elsewhere and can something be done?

Clearly, there have to be more houses, but in an area such as south Gloucestershire, which has significant green belts and villages that would lose their character if there was urban sprawl, it is all the more important that the houses that are built are those that local people can afford and that meet their needs. As the Minister knows, we need housing development of the right sort. High density housing does not have to be unattractive or undesirable. We can consider the issue of housing density.

We have to consider greater use of brownfield sites, but it is critical to ensure that it is not the developers who win, but local people. We have to bite the bullet. The only way to get enough affordable housing for local people is to ensure that when those new houses are built, a much higher proportion are homes for local people at the prices that they can afford. That is vital.

I have heard the Government say that millions and billions of pounds are being spent on housing, but I have not yet seen any evidence of that. Perhaps the serious money is yet to come through. Judging by what I see week by week in my surgery, however, it seems that the problem is getting worse. I hope that the Minister can reassure me that I will not have to be back here in another two and a half years to raise the same topic.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister 11:15 am, 29th June 2004

Let me begin, as is conventional, by congratulating Mr. Webb on securing the debate and bringing the important subject of affordable housing in south Gloucestershire to the attention of the House. I know that it is of concern to you, Mr. Deputy Speaker, as it is, indeed, to us all.

The hon. Gentleman made several interesting proposals, on which I shall reflect; that is, after all, the purpose of such debates. Of course, some of his suggestions are already on the Government's agenda. In particular, we recently tabled amendments to the Housing Bill in support of the compulsory leasing of empty homes.

I know from the many representations that I have received from hon. Members and from the debates to which I have responded how urgent the issue of affordable housing is in the south-west. That is why I was happy to speak at the parliamentary launch on 24 March of the National Housing FederationSouth West report on the economic effects of the affordable housing crisis in the south-west. That is also why I visited Cornwall to talk to people first hand about these issues.

The fact is that the south-west has experienced a near doubling of average house prices since 1999, with growth across the region and in south Gloucestershire continuing at 12 per cent. between the end of 2002 and the end of 2003. At more than £176,000, average house prices in the south-west are now the fourth highest in the country. Earnings in the south-west are below the national average, so measures of average house prices have reached more than seven times average earnings—a wider ratio than anywhere else in the country, except London.

Of course, such house price growth increases the wealth of many existing home owners. Nevertheless, we recognise that it can also create severe difficulties for people who are unable to buy or access housing at an affordable price to suit their needs. That can not only have distressing social consequences, such as increases in homelessness and the use of temporary accommodation or overcrowding in households, but create recruitment and retention problems for key public services. That is why the Government have made the provision of more affordable housing, especially for key workers and young families, a key part of our sustainable communities plan.

The hon. Gentleman graphically described the problems experienced by certain constituents in accessing social rented housing and affordable homes, and I have great sympathy for families facing difficulties in securing suitable accommodation. The latest south Gloucestershire housing strategy reports that the number of those on the housing register is expected to rise by about 240 each year. As he noted, 500 to 550 cases of homelessness are already being accepted—up from about 400 in 1999–2000.

Clearly, there has been little, if any, improvement in the imbalance between the supply of and demand for affordable housing in the hon. Gentleman's constituency since he last raised the issue in the House in November 2001. In responding for the Government in that debate, my predecessor, my hon. Friend Ms Keeble, pointed to South Gloucestershire council's poor record in providing affordable housing, and the hon. Gentleman alluded to that point. Unfortunately, I have to report that the council's record on providing affordable homes remains disappointing. Although about 1,000 homes a year have been built since 2000–01 and the council is on target to build the number of homes required in the local plan, only a mere 127 of them have been affordable units, which constitute about 12 per cent. of the total new build, whether funded by housing associations or through planning gain. Indeed, only 66 affordable homes were secured through section 106 planning gain agreements in the two years between 2002 and 2004. That is the case despite the council's declared policy of securing 30 per cent. affordable housing on sites with more than 25 units in urban areas and sites with more than 15 units in rural areas.

I am encouraged to learn, however, that South Gloucestershire council is anticipating a substantial increase in the use of section 106 agreements and developer contributions over the coming years to secure the delivery of more affordable housing units and supplement other projected completions on non-allocated or non-windfall sites. If that approach were successful, it would bring the average rate of additional affordable housing provision to around 200 units per year, which would be a 100 per cent. increase, although the level would still, of course, be below the council's own targets. I am also encouraged that south Gloucestershire jointly led the recent housing market assessment for the wider west of England area.

The housing study is the first of its type to be published in the south-west and is an excellent example of partnership working, not only between neighbouring unitary authorities of the west of England—the former Avon area—but with private developers and landlords, the regional development agency and tenants. The thrust of the study's 24 major recommendations is to increase partnership and proactive working in housing and planning between the unitary authorities in the west of England to drive much-needed improvements in the delivery of housing to accommodate employment and population growth in the area. I am pleased that the west of England partnership is considering how best to rise to that challenge and I look forward to significant progress in the years to come.

The Chancellor will announce decisions on future affordable housing investment in the spending review in the next few days, but I am proud of the Government's record of investment to date in improving the quality of social housing through the decent homes target and by increasing the resources for the Housing Corporation to more than £1.2 billion in 2003–04. That has meant, for example, that 48 key workers in south Gloucestershire were able to take part in the national starter home initiative between 2002 and 2004.

Recognising the level of need in the south-west, the Government have increased the south-west housing board's grant allocation by no less than 30 per cent. over the next two years, which is among the highest increases in allocation. From the recently announced £188 million investment programme, south Gloucestershire is due to receive £6.4 million to provide 229 additional affordable homes. They include 27 units for nurses, health workers and teachers from the £10 million south-west key worker challenge fund. South Gloucestershire council also received £2.1 million for investment in social housing and other capital investment for 2004–05 and 2005–06.

It is important that the south-west owns the agenda and seeks its own solutions. That is why we have set up the regional housing boards, which will give the region a real opportunity to identify its key housing priorities and to create its own response within a coherent national framework.

Affordable housing is the south-west housing body's No. 1 priority. It announced on 24 March how its £188 million will be invested during the next two years to deliver more than 65,000 affordable homes. Some 20 per cent. of that funding will be used to support a range of low-cost home ownership schemes, such as shared equity and Homebuy. Those are the sort of opportunities that the hon. Gentleman identified in his speech.

I am aware that south Gloucestershire includes an extensive rural area, so I am pleased to say that the current regional investment programme exceeded its target of providing 764 homes in villages with a population of less than 3,000 by allocating £33 million to provide 863 homes.

The Chamber should also be aware that we are working with local authorities to stop families being housed in bed and breakfast accommodation, except in emergencies, from March 2004, and to sustain the reduction in rough sleeping so that from 2002 onwards it remains at or below two thirds of the 1998 level. In 2003–04, the south-west received £4.4 million to tackle homelessness and rough sleeping, with south Gloucestershire receiving the sixth highest amount in the region after Bristol, Exeter, Plymouth, Gloucestershire and Bath.

At national level, the Government have strengthened the hand of local authorities in seeking to secure affordable housing through the planning system. We are clear that any development should ensure that communities are sustainable and should enhance the overall environment and protect the countryside. We must ensure that we get a better mix of housing that reflects the needs of everyone, and not just the market for large detached housing. We are therefore consulting on changes to planning policy guidance note 3 on the location and density of housing to widen the range of housing opportunity in terms of size, type and affordability. We are determined that the planning system will enable the provision of new homes in the right place—focusing on brownfields first—and at the right time to meet planned numbers. The purpose of the new Planning and Compulsory Purchase Act 2004 is to make the planning system faster and fairer.

The Government are also committed to responding by the end of 2005 to the recommendations of the Barker report on reform to the planning system, and are due to consult shortly on the proposed integration of regional housing and planning bodies.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I will want to show what the Minister and I have said to people who come to me who are desperate for housing and face a multiple-year wait. I am trying to get to the kernel of what he is saying. Is he saying that we should wait and see whether the Chancellor comes up with extra cash? The Minister was gracious enough to admit that not much progress, if any, had been made during the past three years, and the council would say that things have got worse. What have we learned from the past few years? What optimism can I give to people in desperation who come to see me? Should I tell them that I hope that there will be some more money, and that it will filter through eventually? Is there anything more concrete that I can tell them?

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

I have already pointed out to the hon. Gentleman that, in the next two years, the regional housing board for the south-west will receive one of the highest increases in allocation of grant for social housing purposes. That is an overall increase in grant of 30 per cent., from which south Gloucestershire will undoubtedly benefit.

The Government recognise the pressures on the housing market in the south-west. The hon. Gentleman is absolutely right that it is a special area. Earnings are generally quite low the region, but it is experiencing enormous growth in the amount of equity put into housing because it is an extremely attractive region to which people want to retire and in which people want to have second homes. The extra investment going into the region from private buyers has a knock-on effect on the availability of affordable housing. We recognise that that is the case, which is why we are increasing grant for social housing in the region and are committed to increasing investment in social housing. We hope to reflect that approach in the spending review announcements.

The hon. Gentleman will be aware that, via our planning reform agenda, we are hoping to remove impediments to housing growth, which some have argued have been created by the planning system. We are also committed to major new house building in order to stabilise the rise in house prices as far as possible. He can use that evidence plus the specific details that I have given to offer some comfort to constituents who find themselves in a very difficult position. I recognise their difficulties. He used to reside in my constituency and he knows the sorts of pressures that can arise in London. We recognise that the south-west shares many of the pressures of London and the south-east, which is why we seek to respond to them.

It is important that the region should own its solutions, so the Government are providing the tools and resources to enable regional partners in the south-west to deliver the higher quantity and quality of housing that the community needs. My Department's key objective is to create sustainable communities in all regions. Today's debate has been an excellent opportunity to reinforce the Government's commitment to a better future for the south-west, and I commend our policies to the Chamber.

Sitting suspended until Two o'clock.