Before we start the debate, I have to advise Members, in line with recommendations from the Government guidance and that of the House of Commons Commission, that they are encouraged to wear masks when they are not speaking and to give proper space to each other when seated or leaving the Chamber; that Members’ notes should be passed to Hansard by email; and that officials should communicate with Ministers electronically. That is the advice that I have to give, so I have given it.
Before I invite David Warburton to move the motion, are any other Members intending to speak in the debate? No? Obviously, Members can intervene, if their intervention is taken, but they can speak only with the mover’s permission.
I beg to move,
That this House
has considered the supply of affordable, good quality housing in the South West.
It is a pleasure to serve under your chairmanship, Mr Betts. I am grateful to my right hon. Friend the Minister, and indeed to Members from the south-west, for being here for this important and timely debate. I would also like to put on the record my thanks to the House staff for making this debate possible on the very first day of our welcome return to Westminster Hall proceedings.
I have been contacted by many constituents, across a kaleidoscope of different jobs and situations, who are struggling to get on to the housing ladder. I hope that this debate will show the extent to which good quality, affordable housing is needed in the south-west, and that we will be able to highlight some practical solutions for addressing this issue. Of course, it is particularly important at the moment, when the pandemic has hit people’s finances and house prices are rising quickly: house prices in the south-west have risen by an average 8.4% in the past year. The pandemic has led to an explosion in home working, which itself has accelerated the flight from cities to rural areas as homeowners rethink their lifestyles. Some areas in my constituency have seen house prices rise by more than 20%, so far too many people, especially young people, have little chance of owning their own home, and the supply of truly affordable homes is just not sufficient to meet that demand.
I believe that everybody deserves a place to call their own: a place for families to raise children, and for people to build lives. As such, I very much welcome the efforts of this Government, and the success of Homes England, in trying to make home ownership more accessible to more people. At the last election, we pledged to level up every part of the United Kingdom through investment in infrastructure, skills and jobs, and by reducing health inequalities. There has been some great progress so far, but there is still much more to do, especially when it comes to housing in the rural south-west. I stood on a manifesto that committed us to building at least 1 million more homes over the course of this Parliament, and in Somerton and Frome, house building will be critical to the long-term recovery from the pandemic and addressing the generational gap in home ownership.
I congratulate my hon. Friend on having secured this important and timely debate. Over many years there has been an incredible increase in demand for housing in the south-west, including, I am sure, in his constituency. Does he share my view that it is impossible to build enough houses to meet the demand, and that we have to take other measures to intervene in the market to manage the demand for houses as well as the supply?
My hon. Friend makes a tremendously apposite point. It is a very good point indeed. The answer is yes, we do: the demand is such that the supply is always going to be vastly outstripped by it, so we need to look at other measures. I hope that when the planning Bill comes forward, it will help us towards that route and show that there are other opportunities out there.
The region’s job market has been among the worst hit by the pandemic, sitting alongside the rocketing house prices that I have mentioned, with affordability only expected to worsen. That means overcrowding, homelessness and a generation of young people unable to move out of their parents’ home or live near their workplace.
I congratulate my hon. Friend on securing this very important and timely debate. Does he agree that part of the problem is that there seems to be a culture of Members of Parliament across the House instinctively opposing planning applications for new homes? It seems to be in the DNA of some of them. In fact, we should get excited, especially as Conservatives, and be enthusiastic about the opportunity, aspiration and hope that a new home provides. Obviously, we have a very great social need.
My hon. Friend makes a tremendously good point. It is important that planning applications are seen in the round. As I will go on to describe, we need to maintain the beauty and special qualities of our rural towns and villages, while at the same time providing the homes that people so badly need.
In 2019-20, the total housing stock in England increased by about 244,000 homes. The number of new homes each year has indeed been growing for several years, but still not quickly enough to meet the demand. Estimates put the number of new homes needed at up to 345,000 per year. That means 42,000 new homes are needed each year in the south-west alone, and yet we are building fewer than half the homes required to plug the gap. We must do more, not only to match supply to demand but crucially to ensure that new homes are genuinely affordable and built where they are needed most—and, yes, that does mean protecting our rural villages from overdevelopment.
As Mrs Thatcher said, borrowing the words of the Scottish Unionist Noel Skelton, Britain should be a “property-owning democracy”. Back in the 1960s, when the Government were building more than 300,000 new houses a year, that ambition was achievable, but the same is not true today. Annual supply needs to increase by a further 23% by the mid-2020s to meet the Government’s own housing target, and by another 39% to reach the National Housing Federation’s recommendations.
There is general agreement that we need more homes, but there is less agreement, both in politics and in the housing industry, about how best to achieve that step change. I believe that there are three key areas where the Government and industry can work together to meet housing need. The first is public sector land reform. Priority for public land sales should change from maximising cash to the provision of public housing.
Secondly, we must adequately invest in building new affordable and sustainable homes where they are needed, creating jobs across construction and the supply chain and building the confidence of consumers, investors and developers. The recent £8.6 billion funding allocation from the affordable homes programme is a good start, but it does not cover the long-term funding gap and the structural barriers that have to be addressed.
Thirdly, there needs to be greater flexibility in the delivery of affordable homes. The most effective way to do that would be for the Government to allow developers to decide what tenure their homes should be on completion of a property so that we generate solutions that respond to the latest local need and allow the building of the right homes to continue in all economic conditions.
I thank my hon. Friend for securing this debate. Does he agree that in coastal constituencies such as mine, it is about not just building homes but the people living in those homes? At least one in five new properties becomes an Airbnb or a second home, and we are increasingly looking at ghost towns in the winter. We need to address that in the planning Bill.
My hon. Friend is absolutely right. The growth of second homes that are rented out and do not become family homes is a problem throughout the south-west. That is precisely the opposite of what we require, so I could not agree more.
I hope that the reforms in the forthcoming planning Bill will have a significant impact on that and much else, and a positive one on housing delivery. There is anxiety in rural Somerset, where we suffer from predatory applications by developers. Our current planning system has too much bureaucracy and too little engagement with local communities, and too much advantage is given to large property developers to the detriment of local businesses and our town and village communities.
The way to address the housing shortage is through developing brownfield sites and easing the process determining change of use designations, rather than through giving an automatic zoned presumption in favour and removing mechanisms for democratic oversight.
There also needs to be greater clarity in the three land categories, with stronger safeguards against unwanted development. The permission in principle approach must be improved, with a final say from our local planning authorities, to protect our communities. I look forward to the Bill being published and will look at it closely, because at the heart of planning are the homes we live in, the schools for our children and the protection of our countryside.
This debate is about the entire south-west region, but across most of Somerset there is a particular and urgent issue preventing almost all new housing delivery. Somerset is in the midst of a phosphate neutrality crisis, which is preventing housing development and creating a significant backlog. This issue, which relates to the protection of the Somerset moors and levels under the Ramsar convention, is costing the Somerset economy millions of pounds and derailing house building in our county. However, it is also of broader national importance, with nutrient issues affecting 34 local authorities in England, delaying the construction of 30,000 to 40,000 homes at the last count.
The publication of a phosphorous budget calculator, which has been approved by Natural England, is a positive step, but the issue very much still rumbles on. In the short term, it looks as though Somerset would benefit from the development of a phosphorous trading auction platform, like that being trialled for nitrates in the Solent, to give small and medium-sized developers a mechanism to provide mitigation. I know that efforts in this area are already under way, but providing mitigation typically involves nature-based projects that take land from agricultural production. This land-hungry approach would negatively impact the farming industry and be slow to become operational. In Somerset, for example, the construction of a colossal 630 hectares of wetland would be needed to offset the 11,000 homes currently delayed across the four affected local authorities. It can take at least three years to construct an established wetland and assess its effectiveness before anyone would be able to move into their new homes, creating more delay and worsening the local housing crisis.
It appears that the more expedient solution is rapid capital investment in sewage treatment works to capture nutrients closer to the source before they enter our watercourses and reducing the mitigation required for new developments. I would ask the Minister to work closely with his colleagues in the Department for Environment, Food and Rural Affairs, as I am sure he is doing, to find a solution to this problem as a matter of urgency.
The south-west has suffered from a historical fiscal concentration on London and the south-east, alongside soaring house prices, so if we are to rebalance our economy and properly level up, investment in genuinely affordable housing will be key. I am ready to work with groups such as Homes for the South West, a coalition of the south-west’s largest housing associations, to help to facilitate that and generate not just new homes but the jobs and investment that our region and communities need so urgently.
It is a great pleasure to serve under your chairmanship, Mr Betts; we normally meet in other circumstances—equally pleasurable, I may say. I congratulate my hon. Friend David Warburton, who is a determined and doughty campaigner for his constituents, on securing this debate and on seeing so many colleagues here from the south-west, including my hon. Friends the Members for Filton and Bradley Stoke (Jack Lopresti), for St Austell and Newquay (Steve Double) and for North Devon (Selaine Saxby), as well as an interloper from Oxfordshire, my hon. Friend John Howell, who is never knowingly under-represented. It is very good to see them all here in this important debate.
The Government are committed to increasing the supply of affordable housing. We have been doing that since 2010. We have delivered some 542,000 new affordable homes in that time, including 382,000 affordable homes for rent, of which 149,000 are homes for social rent. In the south-west, an area that my colleagues know well, we have delivered over 83,000 new affordable homes, including 25,800 affordable homes for ownership and nearly 55,000 affordable homes for rent, so we are committed to driving up affordable home ownership.
We all know that the housing sector is a bellwether in our country for our economy and growth. That is why we have done all we can to keep the industry, more than any other sector, open and active during the pandemic. It is also why we are investing £12 billion in affordable housing—the largest investment since 2010—and that includes £11.5 billion in our affordable homes programme, which will deliver, economic conditions permitting, 180,000 new homes across the country. Approximately half of those will be for affordable home ownership, supporting aspirant homeowners, as my hon. Friend the Member for Somerton and Frome made clear should be a Government priority. It will also double the number of social rented homes, with around 32,000 supplied through this programme.
We have already made significant progress with the programme. Just last week we announced the first allocations for strategic partnerships under the programme, committing around £8.5 billion to boost home ownership and build homes that the country needs, including more social and affordable rental homes. In the south-west we are placing more than £1 billion—one of the largest allocations—to deliver 17,500 new affordable homes across the region. We are confident that that investment will support our determination, not just to build more homes but build more homes of the right type in the right places for local people.
We know that in the end that it is not just about supply, it is about quality. Most of us want to live in strong communities, with a unique character, heritage and culture, that is reflected in the buildings, streets, neighbourhoods, parks and places in which we pass our daily lives. The national planning policy framework has been amended to make it easier for residents and planners to embrace beautiful, practical design, while rejecting the ugly, unsustainable and that of poor quality.
An expectation has been set that all councils should develop a local design code—an illustrated design guide that sets the standard for a local area—with input from local people. We have published a national model design code, a toolkit to empower councils and local people to set these standards. In addition to the changes that Government are making to improve design quality in the current planning system, we believe design performs a key component of the fundamental changes that we have set out in the “Planning for the Future” White Paper. I will say a little more about that in a moment.
We are also committed to improving the energy performance of all properties, not just new build, not only because it will help us achieve our ambitions to reduce emissions as well as reduce fuel poverty, but because warm homes mean healthier homes. The data published by the English housing survey on the condition and the energy efficiency of homes show a marked increase in the energy performance certificate ratings of houses across England over the past 10 years, reflecting the continuous improvement of energy efficiency across our housing stock.
Since 2009, the percentage of homes with an energy performance certificate rating of C or higher in the south-west has nearly doubled. That is a success of which we can be truly proud. From 2025, homes built to the future homes standard will be expected to have at least 75% lower carbon emissions and be zero-carbon ready, without the need for expensive retrofitting. That is no easy task, but it is vital if we are to keep up the momentum. It will mean better quality homes, and homes that are of a higher energy efficiency standard, and it will mean homes that will not have to be changed further as our electricity grid changes and improves.
My hon. Friend the Member for Somerton and Frome mentioned levelling up. As we all know, that is at the heart of the Government’s agenda. We are committed to raising productivity and growth in all places, increasing opportunity for everyone and improving public services. That is why, alongside the investment through the affordable homes programme, the Government are investing over £400 million to support levelling up in the south-west, through the getting building fund, the future high streets fund, and the towns fund. From Glastonbury to Penzance, we are investing in infrastructure to improve everyday life.
In the constituency of my hon. Friend the Member for Somerton and Frome, we are investing £800,000 in the Bruton enterprise centre—I suspect that he knows this as well as I—to provide modern high-quality office and light industrial space to help the next generation of small and medium-sized enterprises to grow and thrive, and to give his local community jobs and income commensurate with their desire to have good homes that they can afford to live in. Slightly further afield, his constituents will also benefit from the Yeovil western corridor, which is supporting the delivery of 1,160 much-needed homes for local people, and about 1,670 new jobs. We want people across places to feel that they can get on in their lives in their local areas, and we want people in places such as Somerton and Frome and the rest of the south west to have confidence that the Government are delivering their economic and social priorities.
My hon. Friend raised home ownership, and quoted Noel Skelton. This Government are as committed as Margaret Thatcher’s to helping to make the dream of home ownership a reality. We are operating a range of different schemes to achieve that. More than 734 households have been helped to purchase homes since spring 2010 by the Government-backed Help to Buy and right to buy schemes. We are now introducing First Homes, which will be sold to first-time buyers with a discount of at least 30% on full market value, making deposits and mortgage requirements cheaper and opening up the dream of home ownership to more people. The discount is set in perpetuity. It is passed on to future buyers, so the local community can benefit in the long term. When I say local community, I mean local community, because we know that local first-time buyers find it difficult to afford homes in the areas where they want to live and work.
Key workers can find themselves unable to live in the communities they serve, so crucially with new homes local authorities will be able to set local connections for key workers through the First Homes base criteria, based on the needs of their local communities. We will deliver 1,500 First Homes via a nationwide pilot, the first of which will be available towards the end of this year. Beyond that, we have introduced an expectation that a minimum of 25% of all affordable homes secured through developer contributions should be First Homes. That will deliver at scale 10,000 new first homes every year for local people to benefit from. We have also introduced a new type of exception site, so that sites wholly focused on delivering First Homes will be able to come forward for planning permission outside local plans. That means that in local communities where the ability to buy is challenging and communities are struggling there will be more opportunities to purchase homes.
My hon. Friend and others also raised second homes. We all recognise the benefits that second homes can bring to local economies. During the staycation of 2021, large parts of the south-west benefited from a lot of people coming to spend their money in the area, but I recognise that large numbers of second homes can have an adverse effect on some areas. That is why we have introduced a series of measures to help to mitigate those effects. In 2013, the Government removed the requirement for local authorities to offer a council tax discount on second homes. Some 96% of second home owners are currently charged at the full rate. That means that the owners of those properties will be paying 100% council tax, contributing fully to their local communities. In 2016, the Government introduced higher rates of stamp duty land tax for those purchasing additional properties at three percentage points above the current rate, which are part of the Government’s commitment to support first-time buyers.
I am very happy—in fact, keen—to discuss with colleagues other measures that we may sensibly employ to ensure that there are adequate homes available to local people in such a way that we are mindful of unintended, undesirable consequences, such as the increase in house prices. I am very happy to discuss those ideas with colleagues.
My hon. Friend also raised the issue of phosphates and asked that we work closely with DEFRA to deal with the challenge of nitrates and nitrate neutrality in developing the right number of homes in the right places for local people to enjoy. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend Rebecca Pow and I set up a taskforce between DEFRA and the Ministry of Housing, Communities and Local Government to find short, medium and long-term solutions to the problem, such as providing nutrient neutrality calculators and better local catchment maps, provided by Natural England, as short-term measures to help local authorities plan ahead; medium-term measures, such as better waste water treatment; and longer term measures, such as changes in agricultural practices, to ensure that we reduce nitrate and phosphate issues to enable us to build the sorts of homes that we need to build. He is quite right that the issue affects significant numbers of potential planning applications, which has a negative consequence for local authorities in terms of council tax and fees forgone. It is an issue beyond the bricks and mortar that people want to live in.
I strongly share my hon. Friend’s passion for the supply of affordable, good quality housing for his constituents, the south-west and the rest of the country. It is a key priority for our Government. As I have said, we have made some real progress and continue to invest in the supply of new, good quality, affordable homes, but we must not be under any illusion that our work has stopped or can stop soon. We will continue to improve standards. We will continue to reform to ensure that good quality, healthier homes are delivered as fast as possible as we exit the pandemic. We have an ambitious housing agenda that underlines our determination to build the homes that the country needs, build back better, build back stronger and ensure that people in the south-west and in Somerton and Frome have the homes they want and deserve, so that they can have a great quality of life with their friends and families.
Question put and agreed to.