Part of the debate – in Westminster Hall at 10:37 am on 9th September 2015.
It is a pleasure to serve under your chairmanship again, Mr Owen. I start by paying tribute to Her Majesty the Queen on becoming the longest-reigning UK monarch. I congratulate Chris Philp on securing the debate. We know that this is an important and serious issue, not least because this is the second time that we have debated it in this Chamber in recent months.
The hon. Member for Croydon South carried out a forensic analysis of the lack of availability and affordability of housing in London. When he went through his eight points, I thought that he had lifted about five of them directly from the Lyons commission report that we produced before the last election, which was widely acknowledged as being a sensible blueprint for how we should go about increasing supply of, and access to, housing. I urge him to read the report again and to talk to people about it, because that would be very helpful.
I take issue with the hon. Gentleman on one point, which is the effectiveness of planning departments. Planning departments in this country are extremely effective, by and large. Figures from the Department show that 80% to 90% of applications are assessed on time. We need to acknowledge that planning departments are going through a really difficult time in many areas of the country, because resources are being taken away from them under austerity measures, but they are receiving more applications. How will the Minister ensure that planning departments are adequately resourced to carry out the tasks before them?
There is consensus on both sides of the Chamber on the problems facing Londoners in accessing not only housing but affordable housing, and it is good that that is the subject of this debate. There is also a strong degree of consensus on the solutions. I hope the Minister is listening and will take on board the suggestions from Members on both sides of the Chamber, but I will focus on the interesting comments made by Mark Field, my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh), for Hackney South and Shoreditch (Meg Hillier) and for Ealing Central and Acton (Dr Huq), and my right hon. Friend Mr Lammy on how to address international investors. They have suggested what can be done to reduce the number of homes sold to international investors, and I look forward to the Minister’s response.
Affordable housing is a serious issue that we have often debated in this House. There is a significant problem with the supply of houses in London. The solution is not only about supply, but supply is important. Estimates of the need for additional house building in London fall within a range of 50,000 to 80,000 a year, yet there were only 21,900 net completions in 2012-13. That is obviously far below the required target, but the goal set by the Mayor’s office leaves a lot to be desired. The Mayor’s housing strategy contains an ambition to build 42,000 new homes a year for 20 years, which does not reach even the lowest estimated requirements. A consequence of that lack of supply and lack of building is that the cost of housing in London is rising.
London’s population has increased by 14% since 2002, and the number of jobs has increased by 15%, but the housing stock has increased by only 9%. As many hon. Members have demonstrated, that 9% does not go to local people. A number of colleagues have demonstrated that people either cannot find affordable social housing or are unable to buy a home due to rocketing costs, yet the Government seem to be doing very little to stem the tide and, in some respects, are exacerbating the problem. Shelter and other organisations have for some time been highlighting how a whole generation of young people in London are being priced out of the housing market.
There is no way that supply will be able to meet demand if building affordable homes—I stress that we are talking about affordable homes—is not one of the Government’s top housing priorities. Local authorities in many areas of London are doing amazing work in trying to build new homes for social rent, and I cite Islington as an example, but they are very concerned that, under the Government’s new proposals, those homes will be sold off before they even house a social tenant, which cannot be a sensible policy. The number of homes being built for social rent has fallen to a 20-year low, against a rising population in London who require such homes.
For every 11 council houses sold last year, just one was built to replace them, which, as a number of my hon. Friends have said, raises questions about what will happen when the right to buy is extended to housing association properties. That is a real issue for the Minister to address today. What will the Government do to ensure that houses sold under the right to buy are not only replaced, but replaced in the areas where those houses have been sold? Otherwise, the replacements will not help local people to access social-rented housing.
The Chancellor’s “pay to stay” scheme is also exacerbating the issue. By making households in London that earn more than £40,000 a year pay market rents, he is undermining the very concept of social housing. He is essentially pricing people out of a system that was designed to help them. The £40,000 London threshold could be met by two adults earning £20,000 a year, which is way below the average wage. If that is a family with children living in a two-bedroom home, they would be paying a weekly rent, at average market rates, of £322, which would probably be rising daily. They would be paying some £1,300 a month, which is essentially the entirety of one parent’s monthly pay packet. That is without including council tax, utility bills and household expenses.
London’s economy depends on workers in lower-paid jobs, and we cannot expect people to be willing to stay to work in a city where all their wages are spent on rent. That point has been forcefully made by the Chartered Institute of Housing, which says that pay to stay would create
“devastating costs for social housing providers” and put them in a
“precarious position ethically and in relation to their charitable status”.
The Chartered Institute of Housing is saying that the scheme is unworkable. That charge is being made not by the Opposition, although we support what the Chartered Institute of Housing is saying, but by a respected housing organisation. What will the Minister do to address those points? The Government keep telling us that they want to get the housing benefit bill under control, but they seem to be doing very little to address the issue other than reducing rents, which, as my hon. Friend Helen Hayes said, is creating ongoing problems for housing associations, possibly affecting their future building programmes.
What is happening to housing in London is fundamentally changing the city as people are pushed out of the central boroughs into outer London, even now, because of the pressure. And people are finding it increasingly difficult to afford housing in those outer boroughs, as my hon. Friends have demonstrated. How will people in London access affordable housing? What we need from the Minister are not one-off initiatives that do not add up to much, and often exacerbate the situation, but a long-term plan to create more affordable housing in London.