[Hugh Bayley in the Chair] — Housing (Greater London)

– in Westminster Hall at 12:00 am on 11th November 2008.

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Motion made, and Question proposed, That the sitting be now adjourned.—[Chris Mole.]

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation 9:30 am, 11th November 2008

May I remind hon. Members that last week Mr. Speaker made a statement saying that all hon. Members, officers and staff of the House who wish to observe a two-minute silence at 11 o'clock this morning will be able to do so? Therefore, at 11 o'clock I will be standing and I hope that those hon. Members who are in this Chamber will join me at that time.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I welcome this debate and I acknowledge your point, Mr. Bayley, so we will finish in good time to allow us to observe the two-minute silence.

This is not the first debate that we have had on housing in London and it certainly will not be the last. A number of recidivists are here, including my hon. Friend Ms Buck and the Minister. I guess that we will debate the matter quite a few more times, because the housing situation in London is difficult and, for the constituents whom my colleagues and I represent, it is dire.

There is a huge amount of housing stress. The current financial problems—the credit crunch—have exacerbated these difficulties, with a number of people moving into negative equity, although I suspect that a lesser proportion have moved into negative equity in London than in other parts of the country. There are also problems with repossession and there is a huge level of stress among owner-occupiers.

London housing is expensive, both in the private rented sector and in the purchasing sector. The lending policies of many of the banks and building societies over the past few years—lending astronomical proportions of people's income, often relying on two incomes—mean that there is a serious crisis if one partner loses a job or does not get the bonus that was expected. I hope that the Minister will offer us some assurance about the behaviour of the banks and the building societies on the repossession policy, because repossession of a property benefits almost nobody; it is a disaster for the family concerned and is traumatic for the children of that family, which often ends up homeless and a charge on the public assets anyway. I hope that, since we have put £34 billion into the banks and given a huge amount to them in loans, we will use the power of public ownership of the banks—or at least part public ownership—to enforce on them a much more humane, rational policy on lending and repossessions. That does not just apply to London; it applies to the whole country.

Broadly speaking, 58 per cent. of Londoners live in owner-occupation, 9 per cent. live in housing association properties, 19 per cent. in private rented accommodation and 14 per cent. in local authority properties. Those figures are from a couple of years ago and I suspect that the number in owner-occupation has gone down, the number in private rented has gone up a great deal and the number in local authority accommodation has probably remained roughly the same.

The problem in London is that housing is so expensive that local authorities are not building as much as one would hope. The housing associations have similar problems. So many people are having difficulty buying that they are forced into the private rented sector—indeed, many are forced into the private rented sector by local authorities that have nowhere to put them or because the housing associations cannot do it. On top of that, the number of starts, particularly in the private sector, has decreased a great deal—by 19 per cent. in one year, in respect of the relevant quarters. The number of starts by registered social landlords—that is, housing associations—is roughly the same. However, the number overall has gone down. The number of completions has also gone down. We are looking at an acceleration of decline, which is a difficult situation to be in.

The useful briefing provided by the Greater London authority states:

"London has by far the greatest housing needs of any English region...50,000 households are homeless and living in temporary accommodation in London, and around 200,000 households are overcrowded."

We also have

"the highest house prices in England, with acute affordability problems in most boroughs...In the last three years nearly 75,000 new homes were built in London, 34 per cent. of which were affordable homes (either social rent or products such as shared ownership for those on intermediate incomes). These figures do not include several thousand vacant homes returned to use and non self-contained units in hostels and halls."

I mention that because the word "affordability" is thrown around too easily when we talk about housing needs in London. The reality is that, certainly in my constituency and, I suspect, in those of my colleagues, there is no possibility for 80 to 90 per cent. of the people that I represent to buy a home in the community where they live. The figures vary across London, but there is probably no constituency where even half can afford to buy within their community. This is a serious crisis.

The reality is that we are not building enough homes. The Housing Federation briefing states that we are

"not building enough homes. Only two thirds of the social homes needed in the capital each year are being built and, overall, London needs at least an extra 11,000 new homes a year...The number of people made homeless in London last year outstripped the number of new social homes built. Over 15,000 families were accepted as homeless by London councils last year. But fewer than 11,500 new social homes were built."

In other words, the number of people who are homeless is increasing; the social disaster is getting worse. It goes on:

"House prices cost over 14 times the average Londoner's income and private rents are more than twice as expensive as social rents...In 2007, the average cost of a London home was £355,000...Buying at the cheapest end of the London market still requires an income of over £56,000, more than double median earnings in the capital."

This is a disastrous situation.

Photo of John Randall John Randall Opposition Assistant Chief Whip (Commons)

I welcome what the hon. Gentleman says. If I can catch your eye, Mr. Bayley, I hope to elaborate on some of the points. Does the hon. Gentleman agree that it is utter madness to consider the plans for a third runway at Heathrow, where 3,000 or 4,000 homes will be demolished, when the number of homes and houses is so pitifully short in the London area?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I am completely with the hon. Gentleman on the future of Heathrow airport. I am opposed to the third runway for many reasons, including the potential loss of housing if it goes ahead. That will not necessarily make an enormous difference to the huge housing issue that we are dealing with across London, but it is one of many factors.

Before I go into how we look at and deal with the problem—the solutions—I ask hon. Members to think for a moment about the issues facing people in London: a higher proportion of their income than in any other part of the country goes on housing; house prices are the highest of anywhere in the country; the housing waiting lists are the longest; the housing transfer lists are the longest; the number of people who are homeless is the highest; the number of people living in hostel accommodation is the highest; and the number of people who are totally homeless is the highest in the whole country. Those things have a huge effect on society in lots of ways.

I represent an inner-city constituency, which, like all other inner-city constituencies in London, is a peculiar nexus, being both very expensive to live in and very poor at the same time. The stresses caused by housing problems are huge. There are people who, if they could dispose of their housing assets, are theoretically capital rich. However, in reality, they are often cash poor because they spend such a huge proportion of their income on mortgages.

Some people live in council or housing association accommodation that, by any stretch of the imagination, is grossly overcrowded. That means that if one child gets sick, all the children get sick; if one child cannot do his or her homework, none of the children can do their homework; if one child cannot bring friends home, none of the children can bring their friends home. Gradually, we end up creating a situation in which the children of such families are underachieving in school, the families concerned suffer from poor health and the teenagers of such families spend more time out of the home than they necessarily want to because there is no space for them to entertain or be at home. That therefore leads to the problems of underachievement in education, and increasing rates of social disorder and crime.

Frankly, children's lives are being wasted because they do not have anywhere decent or reasonable to live and they cannot survive in the family unit. Too often, that leads to family break-up. How many of us, as London MPs, have sat in our advice bureaus and listened to the most heartrending stories of people who live in grossly overcrowded conditions? Families cannot survive if there are three or four children living in a one-bedroomed flat, as, unfortunately, is often the case. The local authority then sends a letter to such families which states that they do not have enough points for the bidding scheme. London is awash with people who are desperate to get the local paper every Thursday to start the choice-based letting process. By the end of the day or a few days later, such people are disappointed and it is up to us to try to do something about it.

Another important aspect is the effect of the problem on single people in London. Household structures are changing rapidly across the whole country. Although the notion of the two-parent, two-child household clearly exists in many parts of the country, it is less and less becoming the norm. People live much more complicated lives and many more people choose to live a single existence. I have faced the problem—I am sure colleagues have, too—that when single people who are threatened with homelessness, or who are homeless, arrive at my office or advice bureau, there is nothing I can do for them unless they have a serious medical condition. Virtually all local authority lettings policies—understandably, I suppose—give greater weight to people with medical conditions, older people, families or children. They put almost no emphasis at all on the needs of single people.

I have met people who have a reasonable job as sales representatives in a shop, for example, but who sleep in cars and go to a public toilet in the morning to freshen up and make themselves look smart for the day. They then go and work in west end shops and go back to sleep in a car at night because they cannot afford the deposit for a private rented flat. Even if they could afford to take on a flat, they cannot afford the rent. We must do something about that. Changing the allocation policy is part of the action we need to take, but we also need to build far more places to rent.

I have mentioned the high social cost, which is disastrous for many people who suffer from housing problems as a result of the housing shortage in London. However, there is also a big financial cost because all local authorities have built hardly any or no properties at all during the past 20 years. The social building that has taken place has been largely done by housing associations. Under right-to-buy legislation, local authorities have been forced to sell a large number of properties. There is a declining public sector, and an increasing demand on that public sector. Local authorities can no longer house people in council housing association places, so they are forced to place families in private rented accommodation. Sometimes the local authority will pay the deposit and sometimes it will have a leased arrangement with people. Such accommodation is very expensive.

Last week, we had a debate about rented accommodation, and I am sure the Minister understands that there is an over-convenient relationship between most London local authorities and local letting agencies. Local authorities simply call such agencies and say that they need 50, 100 or 200 flats and they produce them. However, it seems that little inspection is made of those places. The places I have visited are disgusting, and that is reflected in the reports that I have read. People are forced to live in such conditions; they have no choice because that is where they have been placed. The rent levels are not cheap; in fact, they are phenomenally high. I know families who are paying—or are having paid for them through housing benefit—£300 or £400 a week for inadequate accommodation.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I entirely agree with the hon. Gentleman; he makes an important point. Does he agree that part of the difficulty is that there is a relationship between local and central Government in relation to the housing benefit rules? That also makes the problem of affordability acute. I endorse what he said about the appalling human cost, which applies even in relatively wealthy boroughs, such as the city of Westminster—as it does, of course, in Islington.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I thank the hon. Gentleman for that intervention. We must deal with housing benefit with great care. First, I should state that I support the housing benefit system in the sense that it gives people the right, when they are on income support, jobseeker's allowance or a basic state pension to receive support for their housing costs. I do not want to take that away from anybody.

However, I have a problem because, in effect, the local housing market is maintained by the housing benefit system, through which high rents are paid. That maintains what somebody decides is the market level and the problem goes on. The cost to the public is phenomenal. A few weeks ago, a family came to me who were living in a small, former council house. The rent was £420 a week. The house next door is still owned by the local authority and the local authority tenants were paying a rent of something like £100 or £120 a week. In other words, there is a £300 gap, which goes to somebody who bought the council place on a discount some years ago. Owners of former council houses can live off that money quite easily because their mortgage is probably small—or perhaps they do not have a mortgage. They can live off one property and we, the public, are paying the difference. We, the public, are paying a phenomenal amount of money to keep somebody in temporary accommodation, which normally involves a six-month contract. In the case I have mentioned, the property was in a reasonable condition, but often the conditions in which people live are appalling.

I am not given to quoting the Evening Standard; indeed, in many ways, I do not have a huge regard for the paper. However, yesterday it provided an interesting breakdown of housing benefit costs across London. The article states that they amount to £4,151 million—in other words, £4 billion a year is spent on housing benefit in London. As I have said, I have no problem with people receiving housing benefit. However, if we break down the figures further, the average cost created by people in private rented accommodation who receive housing benefit compared with those in social rented accommodation is more than double. We are subsidising a private rented system and something has to be done about that. I reiterate that I am not in favour of taking the right to housing benefit away from people and I am not in favour of red-lining. However, I am in favour of examining the problem. We must consider putting in place rent controls across London or the country, as the Labour Government of the 1970s did to deal with a similar housing crisis. We must be prepared to be bold in dealing with the problem.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

Does the hon. Gentleman agree that a difficulty with rent controls—this goes back to the first world war when they were first imposed—is that often the quality of housing stock can deteriorate rapidly? Although one might agree that it is right to make things affordable, often the unintended consequences of rent control can be disastrous, particularly for the poorest in our communities.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I recall that during the days of rent control, the rate was often so low that there simply was not enough money to pay for building repairs and maintenance. We must take account of the need to retain sufficient quality of housing and, of course, I understand that point. However, I think that during this crisis, we, the public, are being ripped off big time by the private landlords across London.

We must consider what action we should now take. When local authorities carried out large volumes of building work in the '50s, '60s and '70s, most of it was a result of direct Government grants to local authorities—in some cases, through 60-year borrowing arrangements. Indeed, many hon. Members in the Chamber today are former councillors and will be well aware of that situation.

The housing association movement grew, and 70 per cent. of its capital expenditure was initially borne by central Government grant. Successively, local authorities have almost ceased building altogether. One or two of them are doing small amounts of building at present, and I hope that that is a good sign of a return to building. Housing associations increasingly have to borrow a higher proportion of their capital expenditure on the money markets and have increasingly stopped looking like social landlords or social associations. Increasingly, they look like property companies with a social conscience that have to borrow large sums to build. They build almost speculatively, and they expect to sell a proportion of whatever development they are doing. With what is left over, they are able to build for rent, which is the very purpose that they were set up for in the first place.

Increasingly, the social housing that we get in London is a result of planning agreements under section 106 of the Town and Country Planning Act 1990, whereby there is a requirement that a proportion of the construction be left over for affordable housing, which means a combination of part-rent, part-purchase properties and direct social renting to people in desperate housing need. With the slow-down in the construction industry, there is an increasing number of mothballed or incomplete property developments across London. There are large numbers of unsold properties. There are also large numbers of stalled schemes, and it is unclear what will happen to them.

In this crisis—it is a crisis—I appeal to the Government to do a number of things. I appeal to them to change the regulations on the construction of private developments throughout the country, so that they meet the same standards as those that are required in the building of housing association properties. It is bizarre that, even if housing associations or councils have the money to buy up many of the unsold private places, they do not have the necessary room sizes and do not meet the energy standards—they are just not good enough. That is not right, and we need to do something about it. Surely, it is within the purview of the Government to do that.

I appeal to the Government to recognise that the social housing crisis can be dealt with only by accepting that the building of council housing or housing association property is an end in itself. It is not an add-on to what the private sector does. After the war, in the 1940s, '50s and '60s, there was consensus between the two major parties that we had to build far more housing for people in desperate need. There was not a huge debate about that. The debate was more about numbers than about whether to build. Now, we are simply not building anything like enough properties.

I ask the Government to consider seriously the issue of repossessions. As I said at the beginning of my contribution, they should ensure that the banks operate a reasonable policy and do not repossess homes willy-nilly. They should take people into their confidence and go through the best way of keeping them in the property. When all else fails and a family are threatened with repossession, it makes a lot of sense if the local authority has the power and the resources to buy the property, so that it becomes part of the local authority's estate and the residents become the local authority's tenants. In that way, we avoid the trauma and cost of homelessness and increase the housing stock all at the same time. It makes a lot of sense to use the public sector as a way to protect people from what could be a disaster for them and to increase the potential for housing throughout London.

I hope that the Minister will talk to me about the stuff that I and, I am sure, many of my colleagues read in the papers yesterday. The suggestion was that some blue-skies thinking is going on in his Department and that we are about to end the idea of council tenancies for life. The suggestion was that some policy wonk is working away on the idea of an annual or five-yearly review of the means of council tenants and that, if they are thought to be doing okay, they can be moved out of council tenancy and told to go and fend for themselves. That would be complete anathema to many people, particularly in the Labour party, who believe in housing as a right. I hope that the Minister will assure me that some crazy policy wonk has just gone off message. Perhaps whoever that person is could go off job as well and find something else to do, rather than fiddling about like this. They should use their undoubted imaginative talents on increasing the size of the social rented sector, rather than reducing it, as they seem to be doing.

My last point concerns what we do in London as a whole. Every local authority faces a huge housing problem. There is now some degree of centralised government across London through the Greater London authority and the mayoralty. The previous Mayor, Ken Livingstone, ordered that 50 per cent. of all major developments should be affordable properties, of which, roughly speaking, one third should be socially rented, the difference being those properties that are part-rent, part-purchase. He had a target right across London.

Unfortunately, the new Mayor, Boris Johnson, has abandoned the London-wide target and is telling everyone that he will deal with the matter by negotiating with each borough. It is an interesting idea that the Mayor will turn up and negotiate with each borough. I look forward to the video of the meeting between the Mayor and, for example, the royal borough of Kensington and Chelsea, the city of Westminster, Barnet, Bromley or Richmond. I can just see him turning up and, in his hugely charismatic way, saying, "I think you should build a few more social houses." They will say no, and he will say, "Well, look, we'd like you to." "No." "Would you think about it?" "No." "Oh, okay then, shall we have some more coffee?" I just do not envisage a tough defence of the needs of the public sector and the poor coming from the current Mayor of London.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

The hon. Gentleman has made a caricature both of the city of Westminster, which I shall defend in a few moments, and of the Mayor, Boris Johnson, who is acutely aware that the targets of recent years under the previous incumbent of that post simply were not working. Let me give just one example that relates to the city of Westminster. The initial plan for the redevelopment around Victoria station involved, in effect, a section 106 agreement to allow £300 million of investment in Transport for London. Zero social housing would have been provided on that site, under the former Mayor. Because of the city of Westminster's representations, the new proposals going through from Land Securities will ensure that there is some social housing on the site. Although I do not necessarily disagree entirely with the hon. Gentleman's concern about cosy deals having taken place between mayors of particular parties and others in the past, it is also fair to say that that is something of a caricature that is not borne out by all cases.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

This is work in progress, because we have not yet had the result, so far as I know, of any of the fabled borough-wide meetings. Indeed, I am waiting with bated breath to find out when the meeting with Islington will take place. It keeps being postponed and, I understand, not by the local authority but by the Mayor. He is obviously a very busy man, despite the fact that he lives in Islington. Never mind. I am not asking for special treatment; I am just asking him to understand that there is an issue.

Mr. Field has talked about the social housing developments around Victoria station. Good. How many are there? Where are they? How many more are there in other places? My point is that a London-wide target is essential. The Mayor does have a strategic role and strategic responsibility and should exercise that strategic role and strategic responsibility. Leaving it to negotiations with the boroughs will not achieve what he wants; it will achieve far fewer places.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I will interrupt the hon. Gentleman only briefly, because I know that other hon. Members want to speak, but perhaps he will help me on this point. If the previous Mayor's rigid approach to the 50 per cent. figure was so desirable, why was it that, according to the figures that the hon. Gentleman cited at the beginning of his speech, he delivered only 34 per cent.?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The 50 per cent. target was very desirable and I supported it, as I imagine many Members did. It was not achieved, because it relied far too much on large-site development, rather than small-site development, and there was a degree of opposition to it among developers, who claimed that they could not financially stack up particular developments. In my borough, for example, we have a system whereby anything above 10 units has to include a social proportion. That is fine. The problem is that most of the developments are very small. The number that come in at eight or nine units to avoid the social requirement is miraculous. Alternatively, sites are broken up to avoid that social responsibility.

We need a Mayor who is tough, who will intervene and who will deliver social housing for the people of London; but on the evidence so far, I am not confident that Boris Johnson has that as his highest priority. He has also fiddled around with the division between rented and part-rent, part-purchase properties. In the inner-city areas, the part-rent, part-purchase, so-called affordable properties are not affordable to the majority of people who live locally. They are not affordable to the majority of people in housing stress. There are only one or two boroughs where that is not the case.

London faces a housing crisis—a crisis for people in rented accommodation, those in council accommodation, those who rent privately and those who are owner-occupiers and pay very high mortgages. We need Government intervention to ensure that we conquer that housing crisis and provide homes for rent, with security of tenure, for those who need them. We need intervention to do that. Leaving it to the market will make the situation worse and increase homelessness, poverty and the social disorder that comes from that. In his reply, I hope that the Minister will tell us that the Government will invest in homes and young people, to prevent people from ending up with poor-quality lives, because of the poor-quality property that they are expected to live in.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

I should like the wind-ups to begin at half-past 10. That leaves just under six minutes per person to allow all five colleagues who are standing to speak.

Photo of Lee Scott Lee Scott Conservative, Ilford North 10:01 am, 11th November 2008

I congratulate Jeremy Corbyn on securing the debate. In my speech, I shall tackle some general issues and then one specific issue.

Let me say first that we are in a crisis, which will get worse because of the problem of repossessions. In my advice bureau in Ilford, North, I have seen people who, 12 or 18 months ago, would never have expected to need to come to me for help with housing. Secondly, it is not necessarily helpful to try to blame anyone. I do not come at this subject from the angle of saying whether the last Mayor did well, or what the next Mayor is doing, because that is not relevant. My constituents are worried about what affects them today, here and now.

I believe that the banks have a role to play. In the past few weeks, constituents have told me that the banks' attitude toward people who can no longer meet their mortgage costs has been less than sympathetic. The Government have announced that they intend to do more to ensure that banks are more caring than they have been in the past. That is a vital step toward solving some of the crises that we might find ourselves in.

I am not sure what "affordable homes" mean in London. Incomes are declining—in the past few weeks, I have met constituents who have been asked to take a 25 or 30 per cent. drop in salary to maintain their job. They are doing that to stay in employment and I understand the reasoning behind it, but none the less, what was affordable a few months ago, is not affordable now. We need quality homes that people aspire to and are able to live in, whether that is achieved through the private sector or the public sector, through purchasing or renting.

The group I want to focus on comprises those families who are some of the most vulnerable in our community—families with children who have special needs. In the past few weeks, I have seen a rise in the number of families who have come to me because the husband, wife or partner is now out of work and they can no longer afford the mortgage. I have seen break-ups in marriages and, I am sorry to say, some attempted suicides. The effects on those vulnerable children are drastic, so I want particular emphasis to be given to helping some of those needy families.

The problem affects all sections of our community. It is not limited to those on low incomes: nowadays, everybody is affected. I will cite two cases—obviously without names—that have been brought to my attention during the last few weeks. One is the case of a husband and wife with two children; one child is high up on the autistic spectrum, and the other also has special needs requirements. The parents have been notified by one of our leading banks, which said that it would be sympathetic, that the family need to vacate their property and that a court case would be brought against them if they did not do so. The parents have missed three months' mortgage payments—that is all—and they asked for a mortgage holiday while they sought employment. That request was declined.

I am fairly confident that, if the case reaches court, the home will not be repossessed—certainly, what I heard in yesterday's statement from the Secretary of State for Communities and Local Government leads me to believe that that will not happen. However, it is wholly wrong to put the family in that position and to cause them that worry and stress when they are trying to look after their children. It is simply wrong. I am not convinced that the banks are listening.

The second case is more disturbing. I was contacted by a constituent who can no longer afford their home. That has been the case for nine to 10 months. That person contacted me and told me that they were so depressed that they wished to end their life. Fortunately, I was able to contact their general practitioner, who visited them and we were able to stop that person from doing anything silly. We were able to take an account of their problems. The situation was caused purely because they no longer had enough money. Their fuel and food bills have gone up—I know that we are seeing some fuel and food prices coming down, but they are still at almost record levels. It is unacceptable in 2008 that people feel they no longer wish to live because of the situation that they are in.

If I look at my own constituency, as the hon. Member for Islington, North said earlier, I see building projects that included affordable homes, which were started as long as a year ago, but on which no further work is being done. Workers have been pulled off because the developers, whoever they are, can no longer afford to pay the staff. They are concerned about selling the houses that they were planning to sell, and because of that, the building work has stopped. I urge the Government to try all possible ways to get that work recommenced, because if those houses go into the market, people will be able to rent them and get out of the problems that they are in.

I will finish my contribution—you gave us six minutes, Mr. Bayley, and I am just coming up to that—by saying that it is vital that we try to allow people to stay in their own homes. However, we should not encourage the suggestion made in some radio advertisements, which state, "We can take your home off your hands in 24 hours, and you can rent it back from us and buy it back in years to come." The rents charged are exorbitant, verging on criminal, unacceptable, and must be stopped.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North 10:07 am, 11th November 2008

I congratulate my hon. Friend Jeremy Corbyn on securing this important debate. No doubt some of the points that he made will be reinforced to a degree.

I have four key points to make. First, to state the obvious, the model of affordable house building and delivery, which has in recent years increased the supply of affordable housing—particularly in London under the former Mayor, but across the rest of the country as well—is broken. We must accept that and respond to it. It is broken as a consequence of the crisis that was imported from the American sub-prime market into our economy and because our affordable house delivery programme has been so heavily predicated on section 106 deals and the sales programme of shared-ownership properties.

My hon. Friend the Minister will be aware that in London alone, according to the G15 group of major housing associations, there are £1 billion-worth of unsold shared-ownership properties. Because those properties stand empty and unsold, a cash-flow crisis is created for social housing providers and registered social landlords, which makes it impossible for them to proceed with delivery beyond the current financial year.

We need a radical Government rethink, in both the very short term and the longer term, about how to get back on target for the affordable housing delivery programme. In my view, that should include the ability to buy on the open market. We also need a rethink of subsidy arrangements for the longer term. We cannot afford to allow the consequences of this financially led crisis to impact on those who are in most desperate need of satisfactory housing, whether the people on medium to low incomes who want to buy and are unable to, or the many hundreds of thousands of people who are trapped in desperate housing need. There is particular pressure on family-sized accommodation. Under the section 106 sales-led delivery programme, such accommodation has not been delivered for a great many years. That, of course, has impacted upon housing need.

Although we have seen welcome measures—I am sure that there will more—to inject liquidity into the home ownership market and to assist the restarting of first-time buying, the risk is that the needs of those in housing need will be overlooked. I thank my hon. Friend the Minister for coming to my constituency to meet homeless families in temporary accommodation and families in severely overcrowded accommodation. He has seen for himself the conditions they live in. The threat of the current situation—it was difficult enough before—is that there will be an even greater pincer movement on the availability of social housing, which will make their situation worse. Already, one London household in 10 is on the social housing waiting list. Overcrowding is rising in the United Kingdom, and 750,000 Londoners live in overcrowded accommodation.

Although the Government made a move this time last year to introduce new guidance on overcrowding and to put some money into research, it is important that momentum is stepped up on that front. The guidance needs to be issued, because we have two conflicting and incompatible systems of measurement for overcrowding. We need to drive ahead on the information and on measures to tackle overcrowding. That could include deconversions and extensions, which could go a considerable way to helping, as well as cash incentives.

We also need to recognise the needs of homeless households. I say again to my hon. Friend the Minister—I have a meeting with him soon, for which I am grateful—that it is absolutely unacceptable to treat homeless households as we do, shipping them out of areas where they have strong local connections. I have sent my hon. Friend information on two such households in my constituency this week. In one, a young mother with post-natal depression whose family has lived for 80 years in the Church street area, was sent to Barking and Dagenham. In the other, a young man who has lived for 27 years on the Lisson Green estate and who has three children in local schools, is commuting every day, as many families do.

I wish to make a couple of quick points. As my hon. Friend the Member for Islington, North said, the abolition of the borough delivery target threatens progress on affordable house delivery, which was just becoming significant. Westminster city council achieved 11 per cent. of its affordable housing delivery target over the last two years, which is completely unacceptable. However, I very much welcome the £36 million that the Housing Corporation has invested in delivery. The target became legally binding only recently, so it was too early to see its fruits. It is dangerous that it is being torn up.

Finally, my hon. Friend touched upon the article on short-term tenancies on the front page of The Times yesterday. I believe that the subject was investigated thoroughly in the Hills review. John Hills was specifically charged with considering that subject, and came up with no evidence to support such a proposal. Indeed, he stated that there were strong arguments against a system of review based on coercion, and that

"A threat to security of tenure...would be controversial, to say the least".

He said that that was so for a number of good reasons, including perverse incentives. I rely utterly on the wisdom and thoughtfulness of the new Housing Minister and of my hon. Friend the Minister here today to ensure that this ridiculous and fashionable dogma that has suddenly reared its head again is crushed, as it deserves to be.

Photo of John Randall John Randall Opposition Assistant Chief Whip (Commons) 10:14 am, 11th November 2008

I congratulate Jeremy Corbyn on securing this debate. It is a pleasure to follow Ms Buck, who has initiated similar debates previously.

Although the debate highlights the crisis that we all feel and see, it is slightly reassuring to hear that it affects boroughs other than our own. Week after week, we sit in our constituency surgeries hearing the tragic cases of people who cannot find housing. There is a great deal of frustration, which I am sure other hon. Members here today share. People come to us, seemingly as a last resort, but there is very little that we can do except speak to the housing authority and see whether anything further can be done.

The fact of the matter in most cases, as we have heard, is that no housing stock is available. As I have tried to explain to some of my constituents, it is not the borough's deliberate policy to stop people having a house. It simply does not have the stock. It is incredibly difficult to explain that, and I can understand why people's frustration often boils over. I would hate to work in a housing department—indeed, I pay tribute to those who do. We listen to such problems in our surgeries, but those working in housing departments listen daily—hourly—to people who are desperate to get a home.

The hon. Member for Islington, North rightly pointed out the problems for families. I know of similar cases; I am sure that we all do. The idea of the old-fashioned nuclear family—the married couple with two kids—has changed. We now see people marrying for the second time who have to bring up kids from a first marriage. I am dealing with a case at the moment of a family with teenage children who are unrelated and of different sexes, but who are expected to share the same room. I am sure that that is not allowed, but it has to happen or the family will have nowhere to live. That is unacceptable.

The London borough of Hillingdon, which covers my constituency, has another housing problem—again, one that will be found in other areas. Brunel university is located in the borough, so student housing has taken up a lot of the private rented sector. It has also pushed up prices. I spent some time at London university living in private rented housing, so I am not blameless, but it is something that must be considered.

The frustration of local people is that they want to see their kids getting a place of their own and making a start, but it is not possible. Another effect is completely overstated, but it has to be said. When people come to my surgeries—again, I am sure that similar things happen elsewhere—one of the first things they say is, "Yes, but we live near Heathrow." We know what that means: they think that asylum seekers will be pouring into the country and taking local homes. The facts do not back that up—it may be a small factor, but that is all. Unfortunately, in times of housing shortage, it is exactly such things that increase tension. It is something of which we must be aware.

We have not discussed this, because of the lack of time, but I think of older people, who often find themselves without suitable accommodation. We need more suitable accommodation for older people. I accept that some may not want to leave their present home, but if new homes are adapted and if they seem nice, they might be willing to move, thus freeing up accommodation for others.

We shall hear more about housing problems as a result of the current crisis. Things will become more and more difficult. My hon. Friend Mr. Scott spoke of a well known bank. What worries me is that many of the most vulnerable people go to mortgage lenders who not only charge incredible rates, but are ruthless when customers default. Such cases are difficult to deal with. We as MPs can talk to the banks and we might normally get a favourable response, but some of these mortgage companies are like the car clampers of the banking world: they take no interest in human misery.

Later today, we will be debating Heathrow. Given that the London borough of Hillingdon has an acute shortage of housing, it is incredible that the Government should be on the verge of giving the go-ahead to a scheme that would knock down 3,000 or 4,000 homes. No one knows exactly how many homes will go, but people who have lived in villages and communities for generations will be expected to find somewhere else to live. At present, there is nowhere else for them to go. I find that incredible. If only for that reason, we should not have the runway expansion at Heathrow.

This afternoon, if I am lucky enough to speak, I shall elaborate on my other reasons for taking that view, but we are talking this morning about housing provision. If we knock down 3,000 or 4,000 homes, it will make finding housing in west London even more impossible than it is now.

Photo of Andrew Slaughter Andrew Slaughter PPS (Rt Hon Lord Malloch-Brown KCMG, Minister of State), Foreign & Commonwealth Office 10:19 am, 11th November 2008

As my hon. Friend Jeremy Corbyn and other speakers have said, there is a housing crisis in London—a crisis of temporary accommodation, of overcrowding and, above all, of affordability, which has not yet been resolved by the fall in house prices. An organisation with which many London Members will be familiar, London Citizens, conducted research on the housing affordability standard. It showed that for those on the London living wage, which is currently just below £8 an hour, the only type of affordable housing in London is social rented housing provided by council housing associations. That is the case for many of my constituents whether renting or buying in the private sector. Even many types of shared ownership housing are simply not affordable in London, which might not be the case for the rest of the country.

I look forward to hearing from the Minister what the Government's response to the London housing crisis will be. London Labour MPs are preoccupied with the Mayor's response and the steps that he and his advisers are taking, which are worsening the situation. We have heard about the abandoning of the 50 per cent. target. There is a myth that that target is difficult to achieve, but in its last three years of a Labour administration, Hammersmith and Fulham local authority achieved an 80 per cent. affordable housing target, split roughly 50:50 between intermediate and rented property, so although it might not be easy to achieve, it is possible.

The reason for abandoning that target has far more to do with London politics and the fact that the Mayor has surrounded himself with advisers from the right wing of the Conservative party, many of whom are from the old Porter regime or a younger generation of the same ilk. [Interruption.]It has its amusing side, but I am afraid that it is a serious matter for constituents.

The housing policy in my local authority area is to reduce the percentage of social housing—that is what the authority says it intends to do—despite the fact that that percentage is already below the inner-London average. To that end, it has three policies: the first is to build no new affordable homes; the second is to sell off existing affordable homes, and the third is to demolish existing estates.

I do not have time to discuss all the case studies that have been carried out, but I shall deal with one, because it is a good example of people being caught with their fingers in the till. A development in White City—the most deprived part of my constituency and the area with greatest housing need—was intended to provide 150 new homes, half of which would have been affordable, but when the Conservatives took over the administration of the council two years ago, they put that development on hold. They waited until the change of mayoralty, so that there would be no block imposed, and at that stage removed all rented affordable homes from the scheme. Effectively, the authority removed all the affordable homes, given that income levels of £30,000, £40,000 or £60,000 a year are needed to afford even the very few shared-ownership units on that development. The £12 million that the Housing Corporation provided to subsidise the affordable homes was sent back as not wanted.

Ironically, the Greater London authority's own officers objected and said that

"a zero social rented development in this case would be a disproportionate approach".

The Conservative-controlled committee ignored that and said that it would speak directly to the Mayor, which it did. Lo and behold, a week later the decision was reversed, meaning that there will be no affordable rented homes on that or any other sites developed in the borough. Other Conservative councils in London are seeking to follow that precedent.

In Fulham is the Imperial Wharf development, where permission for 241 affordable homes, including 191 affordable rented homes, was withdrawn from the developer, because they were not wanted. Very nearby is the Watermeadow Court development, which is to be demolished with the loss of 80 affordable homes. Obviously, the tenants will have to be rehoused; the opportunity cost of that is that doing so may use accommodation that would otherwise have gone to people in overcrowded accommodation or on the housing waiting list.

In addition, 60 good-quality units intended for homeless families have been sold off at market rates to produce capital receipts. Those families will either jump the housing queue or enter private rented accommodation, which will result in an extremely large bill for the taxpayer. Furthermore, plans are on the table to demolish up to seven, or part of seven, estates in the borough.

This problem will be cured only by Government intervention, which appears to be more fashionable these days than it has been in recent times. The implications of the policies in London that I have outlined are appalling for my constituents.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

Does my hon. Friend agree that part of the response to some of these problems has been to expect those boroughs not in the heart of London or in the greatest housing to take the strain by providing more housing through sub-regional partnerships and by enabling people to apply for housing outside their own area? Does he also agree that that system has not worked, because many outer-London boroughs, such as Barnet and Croydon, have not provided housing or participated in the sub-regional partnerships? They have failed to take the strain off some of those inner-London authorities.

Photo of Andrew Slaughter Andrew Slaughter PPS (Rt Hon Lord Malloch-Brown KCMG, Minister of State), Foreign & Commonwealth Office

As always, I am very grateful to my hon. Friend for her intervention. There are two points there: first, people have a right—a human right, I believe—to continue to live where their families grew up, whether in central London or elsewhere. We have a duty to provide affordable housing in those areas. Secondly, clearly there is no willingness to do that. Families are being told to move out of the borough, and the council is actually boasting about the length of time that people will be on the waiting list—12 years before people will even be considered for a property. Homeless families turning up to the town hall are made to wait outside in the cold for several hours before being seen. However, as she said, when they are palmed off to outer London, there is clearly no willingness to accommodate there. This crisis bas been caused not just by the economic circumstances, but by political intervention. Only Government intervention will resolve that.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

It is only reasonable to give you six minutes, Mr. Field, but you will try our patience if you go on any longer.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster 10:26 am, 11th November 2008

Thank you very much for your guidance, Mr. Bayley.

I congratulate Jeremy Corbyn on securing this very important debate and on sharing with us his heartfelt thoughts. Twenty years ago last month, I moved to his constituency. As is my wont, I recently walked around that area—Birnam road, just off Tollington park—and judging by the new development on the Durham road estate, things have been spruced up. However, that is not to take away from what he was saying. I am sure that there are some major problems within those estates.

Housing has been an issue close to the heart of London Members since the Great Reform Act. I am reading a quite fantastic book, which all Londoners should read: Jerry White's "London in the Nineteenth Century", which deals with housing crises back when London did not extend much beyond the boundaries of my constituency, and perhaps that of Ms Buck. It discusses the problems of the rookeries and the slum clearances. Back then, housing was a major issue. The hon. Gentleman rightly pointed out that, in the aftermath of the second world war, and in the 1950s and 1960s, there was a united front politically in providing more housing in the capital. Although there are some disagreements—I am sorry about the tone of the comments of Mr. Slaughter, who is not in favour of the work of the Conservative-run Hammersmith and Fulham council—there is much broad agreement on some of the concerns that we all share.

I receive a huge postbag of letters from constituents on many subjects. After immigration and the antics of parking regulators in Westminster city council, housing is the third most commonly raised subject. Many poor working families in Westminster have lived there for generations, but are regarded as not being poor enough to qualify for council or other social housing. The waiting lists in inner London—I am sure that this applies equally to Islington, Westminster and Hammersmith and Fulham—are mind-boggling. The area has become over-polarised. One must be unfeasibly rich or unfeasibly poor to live in so much of central London. That has been a perennial problem in the centre, but it is now extending to much of the capital.

I do not want to say too much about The Times article yesterday. I have some sympathy perhaps with what the Government are trying to do. The notion of a secure tenancy for life that can be passed on down generations seems very much at odds with London mobility and diversity—the idea that those in the public sector would have security, but those in the private sector would not. However, that will be further explored in times to come.

Last month, I met representatives of the G15—a group of London's largest housing associations, which house one in 10 Londoners, or some 700,000 people, and manage more than 400,000 homes. The group develops most of London's new affordable housing each year, and aims to create balanced and sustainable communities. It offers a range of homes to ensure that estates do not concentrate poverty, but contain a vibrant mix of people and incomes.

The lack of capital liquidity to fund new housing schemes, the collapse in the financial viability of house builders and an acute lack of mortgage finance for those buying new homes are starting to cause real problems for London's housing providers. Although affordable housing production is progressing, it centres only on schemes that were either in progress when the crunch arrived or could not be stopped. That will mean a reasonable number of completions this year, but a collapse in the programme next year and, conceivably, no programme at all in 2010-11 unless there is an engineered flow of mortgages for first-time buyers.

I will not say very much more. I hope that the Minister will tell us what will be done about the gap that I mentioned. There is a risk of us being complacent today because work is going on, but the effect of the credit crunch will have a major impact in three or four years' time unless action is taken now to put some of the work in train. It is fair to say that many housing associations are building homes for all sections of the housing market, from social rented and shared-ownership homes to the intermediate market rent and market sales. As all hon. Members will agree, we need to maintain that broad mix in London's communities. As well as offering homes for the poorest in society, we also need to provide better options for the people who are too rich to be able to rent socially, but too poor to buy in the market. That middle group has become ever larger in the communities that we represent. We want to have cohesive communities in which people do not feel the need, or desire, to move away from places in which they have lived and worked for some decades.

I have overstepped my time, but thank you, Mr. Bayley, for allowing me to make my contribution. I know that it is a very important subject to which all of us will return before too long.

Photo of Sarah Teather Sarah Teather Shadow Minister (Communities and Local Government) (Housing and Planning) 10:32 am, 11th November 2008

I apologise for the state of my voice. I have a very bad cold, so I hope that you can hear me, Mr. Bayley.

I congratulate Jeremy Corbyn on securing this important debate. Mr. Field described housing supply and lack of housing provision as an issue that is dear to the heart of every London MP. That is very true. As a fellow London MP, it is certainly an issue that is dear to my heart. Lack of housing, poor, overcrowded, unaffordable and unsuitable housing have all been mentioned today, and they are among the key issues brought to my own office every week. Like the hon. Member for Islington, North I hear the same stories week after week. We hear similar stories about how poor housing causes misery, breaks marriages, ruins health, destroys education and, most importantly, extinguishes hope for many families in London.

Up to 50,000 children are stuck in temporary accommodation in London. In my constituency, that represents one in 10 of Brent's children. The continual moves and the unsuitable housing affects their ability to thrive at school. Just as they settle in one school, they are moved on somewhere else. If that temporary accommodation is also overcrowded, there is no way that they can do their homework. That point has been made by many hon. Members today.

More than 300,000 people are stuck on waiting lists for social housing in London, and 20,000 of those are in Brent, many of them in my constituency. That is an issue of both lack of supply and extreme demand. Falling house prices will not necessarily help the matter. As mortgages become less affordable, we expect a knock-on effect on the affordability of renting as well.

Many hon. Members mentioned cases from their own constituencies. I want to mention a couple from mine. Mr. H. has been on the housing list since 1984. He is in band C, so he is classed as someone in housing need. He is disabled and unable to work. He is single, but he has children who do not live with him. He cannot get a property because he is a single man, which means he cannot get proper access to his children. Mr. H. has been left on the housing list under four different Prime Ministers and still has little chance of finding a home.

Miss G. was registered for re-housing 11 years ago. She was in band C but, after representations from our office, she was upgraded to band B two years ago. She is in a two-bedroom property with four children, all of whom share a bedroom. Her son suffers from autism and learning difficulties. He has to share with his sisters, which has affected all of them.

The hon. Member for Islington, North described other such heart-rending stories. Mr. Randall spoke about how often such stories tip over into racial tension. Housing is one of the few issues in my constituency—an area of probably unqualified tolerance—that will bring tension about immigration to the fore, which is why I hope the Government will now accord greater priority to the matter.

Like other hon. Members, I was very anxious about the ideas that were floated in The Times yesterday. We need to find new and innovative ways to deal with the lack of housing. We already have a situation in which a person has to have a severe physical and/or mental health problem—probably a drug problem—and probably also has to be a single mother to have any chance of social housing. It is hard to see how the situation can be improved if such people are threatened with eviction if they fail to look hard enough for a job, and also if they get a job and their circumstances change.

The Government must tackle the supply issue. I hope they will consider using the current downturn to take advantage of falling land prices to buy up land and properties, where appropriate. They will have to lift registered social landlords' borrowing limits and extend that flexibility to local authorities. We have that opportunity, and we should not let it go by. We can deal not just with the current crisis, but with the long term.

The Government must be more flexible with their house-building targets. As Ms Buck mentioned, we have to accept that funding schemes through sales programmes will cause problems at the moment. I hope the Government will bring forward that subsidy and allow RSLs to fund their own building programmes through a greater proportion of subsidy rather than relying on private sales, otherwise we will end up with no build at all, which will mean that the Government miss their housing targets.

We must have a coherent programme to tackle the issue of empty properties. A number of hon. Members mentioned partially built properties. Developments that are not completed often lie empty. I said that RSLs should be able to buy up some of those properties. However, as the hon. Member for Islington, North mentioned, that will not always be appropriate because such buildings will not necessarily be of suitable size to meet the long-term needs of social tenants.

The Government could make better use of their own scheme, the empty dwellings management orders, to ensure that such buildings are put back into use for private rent. Moreover, I hope they will consider more short-term rent options. Other options exist in other countries in which property is brought into use on a short-term basis. We must be innovative when we consider this issue. It is no good for town centres to have many properties lying empty and available for squatters to inhabit when we have tens of thousands of people in the same area waiting on the housing list for more property.

On repossessions, it is vital that we do whatever we can to keep people in their homes. It will be a disaster not just for those individuals who lose their homes but for local authorities, because they will have to deal with even more people who are desperate for housing at a time when the system is creaking at the seams.

I have concerns about the pre-action protocol that the Government have announced. There is considerable doubt that the courts will enforce much of what is in the protocol. Instead, I hope the Government will consider amending the Banking Bill, which is going through Parliament at present, to put some of those things into law.

Housing is a vital issue that affects all of us here today regardless of our party. The Government have made a number of announcements recently to tackle the problem. Unfortunately, when we go through the detail, we find that there is not a great deal of action. I hope that that will change and that the Government will accord greater priority to the matter.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party 10:39 am, 11th November 2008

I congratulate Jeremy Corbyn on securing this important debate. His was a thoughtful speech. I do not agree with all of his analysis, but we have a good deal in common, which highlights how the issue affects all London Members of Parliament. All Members who have contributed to the debate have added aspects of their experience and perspective in dealing with it. It seems to me that everyone agrees that there is a serious problem. In tackling it, I hope that the Government will remember that what is important is what works, rather than what might seem rigidly or dogmatically attractive.

That is why I take a different view from some Government Members of the approach adopted by the current Mayor. I do not doubt the good intentions of the previous Mayor, with his 50 per cent. target, but the reality is that its rigid application did not work in practice. It delivered only about 34 per cent. affordable housing. That is why the current Mayor is right to adopt a more flexible approach. If we are to deliver more housing, as we all want to, it will certainly require the Mayor to use his housing powers vigorously—I do not dispute that for a second—but it will also require him to use those powers collaboratively with the London boroughs and the development industry.

I hope that the Government will be wary of responding to our current difficulties by falling into over-reliance on too rigid a form of intervention or regulation. Over-regulation in dealing with supply-side issues can sometimes have a perverse consequence, rather than helping. We must be flexible and pragmatic in our approach.

Photo of Andrew Slaughter Andrew Slaughter PPS (Rt Hon Lord Malloch-Brown KCMG, Minister of State), Foreign & Commonwealth Office

That is all very well, but if a local authority says as official policy that there are too many socially rented houses in the area, what should a mayor who says that he wants to build socially rented homes do about it?

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I suspect that a mayor might say that he will discuss it with that local authority in the same way that he would with the Labour mayor of the London borough of Newham, who has also argued strongly that significantly more privately owned housing is needed in his borough to create a more mixed community. The hon. Gentleman's intervention highlights the danger of a rigid, one-size-fits-all approach. Newham in east London, like a number of inner-city boroughs, needs proportionately more privately owned accommodation to provide mixed communities; other boroughs have different needs.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I thank the hon. Gentleman. Is that not exactly the point? The more deprived boroughs are seeking a social mix through more privately owned accommodation. It is therefore essential that places such as Hammersmith, Westminster, Barnet and Croydon take a larger proportion of social housing, or we will end up with nothing.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

The hon. Lady forgets that the rigid application of the Mayor's 50 per cent. target led, in many well-documented instances, to sites being mothballed rather than brought on stream, and 50 per cent. of a mothballed site is nothing. Such measures do not achieve their objectives. I shall return to that point.

We also need to tackle the other perverse situations that have arisen due to the planning system. The London borough of Barnet, for example, has identified Colindale as an area where it would very much like to introduce housing regeneration, but a number of outer London boroughs suffer from the local government finance system: perversely, because they are on the floor, they get no benefit from any enhanced tax base gained through new housing development. Very often, the formula works to their detriment in such a way that they do not get the funding that they require for services for the extra population. The issue must be tackled at source.

We need to recognise that housing policy in the long term must address aspiration. Back in 2000, the London assembly produced a cross-party report demonstrating that 77 per cent. of key public sector workers in London aspired to buy. They will struggle to do so on current wages, but we certainly ought to help them achieve that aspiration, rather than blocking it. That is why the development of a healthy intermediate sector in London is all the more important.

A number of my hon. Friends, particularly Mr. Field, referred to the key issue of those who are working, economically active and key to our city's well-being, but who will never qualify for social rented accommodation. I hope that the Mayor's housing strategy, which I gather is due to be published later this month for consultation, will address that need. London probably needs a greater percentage of intermediate, more flexible and more imaginative schemes to meet its housing need, and the Mayor seems willing to address that.

When we consider the disincentives, we also need to consider how planning rules have tended to work in the past. There is an issue about affordable family homes in both the intermediate and the social rented sectors. One problem is how density is calculated. It is often calculated on the basis of units rather than habitable rooms per hectare, so it is easy to meet the requirement by building a large number of flatted units rather than family homes. The new Mayor is alert to that perverse incentive, which needs to be dealt with.

The Mayor has set an overall objective of building some 50,000 affordable homes, which seems eminently deliverable. It is calculated consistently with the basis for the local area agreements, and the Government are therefore more likely to buy in. I think that the Mayor, as chairman of the London board of the Homes and Communities Agency, will use his £5 billion housing budget imaginatively.

Finally—I know that the Minister will want to respond—I hope that we can tackle the issue of repossession. My hon. Friend Mr. Scott referred to instances of it in his constituency; I have had the same experience in mine, in outer London. I recently visited Bromley county court, which is the third busiest in London. The judges there made it clear to me that they do their level best not to make possession orders but to suspend where the person is making an effort to pay, but the problem that they have found is that people often do not come to court or take advice early enough in the process and are sucked too far into debt by the time that they come before the court. That is why it is hugely important that changes in the legal aid scheme do not have the perverse consequence of reducing the amount of affordable legal advice available in high street solicitors' firms and citizens advice bureaux. It is important to recognise that. There is good will on the part of the judiciary, but we need to help people prevent the problem from arising in the first place.

I hope that the partnerships with the boroughs will develop things such as aspiration under the first steps programme and by using some of the interesting models developed by organisations such as the Notting Hill Housing Trust, which has shown much more imagination in getting people into the intermediate market. We also need to make much more use of existing stock. I understand that the Mayor expects that a significant percentage of new housing will come through non-new build—making better use of existing stock—and that he will set a target that only 1 per cent. of London's housing should be empty. That is a brave and challenging target, and it gives the lie to the idea that the Mayor is not willing to step up to the issue.

When the Mayor came into office, he discovered that Transport for London owned houses near the north circular, 87 per cent. of which were empty. That is not much of a record for the previous mayoral regime. The current Mayor has been unfairly criticised. The reality is that we will only tackle the problem if the Mayor and London boroughs of all parties work together to deliver products appropriate for London's particular housing needs, which involve unique pressures and problems. I hope that the Government will continue to give London the flexibility to tackle those problems in a way that meets its specific needs.

Photo of Iain Wright Iain Wright Parliamentary Under-Secretary (Department for Communities and Local Government) 10:48 am, 11th November 2008

It is a pleasure to serve under your chairmanship, Mr. Bayley. I think that I am the only non-London Member here. It is always a pleasure to discuss housing issues here because of the high quality of debate.

I congratulate my hon. Friend Jeremy Corbyn on securing this important debate. He tackled the issue extraordinarily well in his usual articulate, eloquent and passionate style. One thing that he reinforced for me was that housing is not just about housing: it is about life chances. It is about giving children somewhere to do their homework, so that they can increase their educational qualifications. It is about having a well-ventilated and heated home, to reduce the risk of asthma and other respiratory diseases. It is about ensuring that people have a place to play in decent recreational and sporting facilities in their community. Good housing increases and improves life chances. Conversely, bad housing increases people's stress levels and reduces aspiration and ambition.

Before I go on, I just want to congratulate Sarah Teather on her new post; I also hope that she feels better soon. I think that this is the first time that I have discussed housing matters with her. She may be interested to hear that the reason why I came in panting and out of breath was that I had just had a meeting with the Brent private tenants' rights group about preventing homelessness among private rented sector tenants. It was an extremely important meeting about what we can do to improve quality in the private rented sector, alongside the Julie Rugg review. I am very keen to move forward and address some of the suggestions that emerged from the meeting.

We last examined housing back in April, when my hon. Friend Ms Buck secured a debate on housing needs in the capital. Since April, things have moved on enormously. We have seen a new London Mayor elected and also an international economic downturn, the likes of which, as the Prime Minister has said in the House, we have not seen since the first world war. I have also had the opportunity to visit my hon. Friend's constituency to see some of the issues that she has to tackle as part of her constituency case load, particularly with regard to overcrowding and the need to secure family accommodation. I was very grateful for the opportunity to make that visit, because it opened my eyes about what is needed in the capital.

We have addressed a range of issues today, but overall the debate reinforces the message that increasing housing supply is vital. It will not be a magic wand or some sort of panacea that will solve every housing problem. However, by increasing the supply of housing in the capital, we can tackle some of the acute problems that we face.

We need to increase the supply of housing because, despite the short-term financial turbulence, London remains a growing and successful world city—arguably the best city in the world. The London plan estimates that London's population could grow to 8 million or more by 2016, with between 27,000 and 36,000 additional households a year before then. Indeed, London's population could be as high as 8.7 million people by 2026. So we need to think about the needs of all Londoners—a point made by Mr. Field—and to maintain a good supply of homes for rent and sale, both affordable and market homes, to meet the wide-ranging and diverse demands of our city.

My hon. Friend the Member for Islington, North was very articulate about the fact that we are changing how we live. Families do not have the 2.2 children in a house that there used to be in previous generations, and people are living longer and their ambitions and aspirations are increasing. Housing tenure and housing stock must reflect those changing social and demographic factors.

I was really struck by the point that my hon. Friend made in his opening address that average house prices in London, despite short-term falls in the last few months, are 14 times the average salary of Londoners. That is the statistic that will stay with me from the debate, and it represents a problem that we need to tackle by improving and increasing the supply of housing and its affordability.

The average house price in London remains £340,000, so buying a house remains a problem even for those households on reasonable salaries. Despite recent progress, there are still almost 54,000 households in temporary accommodation in the capital—70 per cent. of the national total.

I said that we need to increase the supply of homes in the capital, and we have been building more homes in London in recent years. In 2006-07, more than 31,000 homes were built. However, the Greater London authority estimates that London will require an additional 353,000 new homes in the next 10 years to meet the backlog that hon. Members have mentioned today and to address future demand.

Several hon. Members have mentioned the strategic housing role of the Mayor of London. I do not want to make party political points; I think that housing is far too important an issue for that. Given London's housing needs and its world-class position, it is important that the Mayor has a strong, strategic housing role. That is why, as well as preparing the strategic development strategy for the capital, we gave the Mayor responsibility for producing a statutory housing strategy and for advising Ministers on the allocation of housing investment in London from the regional housing pot, which will amount to about £4 billion in the next few years.

Since the Mayor was elected in May, however, I must say that it has not been clear how he intends to fulfil that role and help to meet the housing needs of Londoners. As I say, I do not want to make petty party political points, but politics is about priorities. I want the Mayor to do well and to address the housing delivery problem in London, but it does not seem to be a priority for him whatsoever. His housing policy seems blurred and confused, and well down his list of priorities. I have no clear idea about how he intends to meet the commitment on housing delivery.

The Mayor's direction of travel document on the London plan, which is entitled "Planning for a better London", says that he will work with boroughs—something that was requested by hon. Members this morning—to identify ways to improve the supply of housing and to ensure a supportive planning policy framework for delivery. Although I appreciate that changing the London plan is a matter for the Mayor, it would be incredibly helpful for all concerned—whether central Government or local boroughs—to have clarity on the process of alteration and review as soon as possible. Without a clear steer, both boroughs and developers are unsure about what housing requirements they should meet, and the resulting delays will not help the families that the hon. Members here today represent so well.

I must also say that the Mayor is sending out some very confused messages on affordable housing. It has been said many times this morning that he intends to remove the strategic target in the current London plan to deliver 50 per cent. affordable housing. That would also require an amendment to the London plan. At the same time, he says that he intends to work with London boroughs to deliver 50,000 additional homes by 2011, thus continuing a commitment made by the previous Mayor.

I understand that the new Mayor has already begun the process of negotiating annual affordable housing targets with each borough for the next three years, up to 2011. However, that approach is time-consuming, cumbersome and, in the end, results in delays that families in London can ill afford. It is very important that all London boroughs step up to the plate and do their best to achieve those targets, to help to meet the needs of all Londoners. However, it is very clear from my perspective that the boroughs are bemused and confused about the planning targets for affordable housing. So I await with interest the Mayor's proposals on how he intends to set those targets for the whole of the 20-year London plan period.

Robert Neill said that the Mayor intends to consult the London assembly later this month on his draft housing strategy. I very much look forward to seeing that important document and the detail about how the Mayor proposes to address London's housing needs for the longer term.

A great number of important issues were mentioned in today's debate. Unfortunately, I will not have the time to discuss all of them. However, one of the clear themes that emerged is the concern that hon. Members from all parts of the House have about the rise in repossessions in recent weeks and months. As has been articulated by my hon. Friend the Member for Islington, North and others, current housing market difficulties mean that some householders are struggling to meet their housing costs.

Although the number of households affected by repossession is thankfully still very low, for those people whose homes are being repossessed, it is a major life trauma that creates real stress. We are determined to help people who face those very disturbing circumstances. We are committed to working with lenders and advice agencies to help people to face repossession so that, wherever possible, they can remain in their homes.

Hon. Members will be aware that, in September, we announced a £200 million mortgage rescue scheme, which will help up to 6,000 of the most vulnerable home owners facing repossession to remain in their homes. We are currently working hard with delivery partners to ensure that the Government's mortgage rescue scheme is open for business as soon as possible. When my right hon. Friend the Minister for Housing came to her post about a month ago, she was struck by the fact that the mortgage rescue scheme was set to open in January; she wants to bring the opening date forward as quickly as possible, and I commend her for that.

The mortgage rescue scheme will be firmly targeted on families with dependent children, the elderly and vulnerable groups who can no longer afford their repayments and who would be eligible for homelessness assistance if their homes were repossessed. My officials have also been holding a series of mortgage repossession summits for local authorities around the country, to discuss the regional position and to consult people on how the mortgage rescue scheme will work. I understand that the London summit will take place this Thursday, and we hope that officials will be back in the capital at the end of the month to host a delivery briefing, to outline how the scheme could operate.

I would also stress that lenders are examining further options to assist households that are due to experience payment shocks and concerns in the coming months, and we continue to work closely with the Council of Mortgage Lenders and other partners to achieve that aim. The Government, particularly my right hon. Friend the Chief Secretary to the Treasury, have been talking very forcefully to lenders about this issue and encouraging them to ensure that they do not go straight to repossessions and that other measures are put in place; the same aim was behind the interest rate cut last week.

I am very conscious of time. It has been an excellent debate that, unfortunately, we will need to have time and again. However, I hope that I have demonstrated that the Government are committed to improving housing supply.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation 11:00 am, 11th November 2008

Order. I invite colleagues to join me in observing the two-minute silence.

A two-minute silence was observed.

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Fascinating debate about housing in London and the role of social housing. While the average...

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