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Low-cost Housing

Volume 450: debated on Tuesday 10 October 2006

19. What progress has been made towards the development of the £60,000 home; and if she will make a statement. (92554)

The design for manufacture competition is making excellent progress. Preferred developers have been selected on all 10 sites in the competition, and construction work is now under way on four. We anticipate that the first show home will be completed by November.

We have 1 million more homeowners in Britain since 1997, which is to be welcomed, but I regularly meet people in Dudley who are working hard but struggling to make ends meet on average incomes or in low-paid jobs, some of whom are living at home with their parents. They are desperate to buy a home of their own. They need a Government who are on their side, helping them to get on the housing ladder, which is why the expansion of the programme that my right hon. Friend has outlined today is so important. When does she think that people in my constituency will be able to buy a home at a lower cost?

I thank my hon. Friend for that question. He is absolutely right that there is a real need, for young couples in particular, to be able to gain access to the housing market. The £60,000 house competition was designed to reduce and keep a lid on construction costs while driving up quality standards, particularly for smaller, two-bedroom houses. That should generate a cultural change across the industry and keep prices down while delivering higher standards. I hope that my hon. Friend’s constituents will benefit not only from that change in the industry, but from the other low-cost home ownership schemes that the Government are developing. He will know that we aim to help more than 100,000 households over the next few years, in the run up to 2010, with specific help through low-cost home ownership schemes.

I thank my right hon. Friend for her comments, but I understand that the £60,000 relates to construction costs, and that there will be a variation in prices according to local housing market conditions. Can she reassure me that, even taking those local adjustments into account, the houses will still be affordable to people in the market who cannot get on the housing ladder?

We are certainly encouraging all developers to think about how they can reduce construction costs and drive up quality. Of the 1,000-odd houses that will be built through that type of competition, some will go on the market for £60,000 or thereabouts. People will have access to them through the shared equity scheme, and they will be able to buy a share of the house for such a price. However, it is important to point out that that will not be the only way for people to get their foot on the housing ladder. There are other Government policies designed specifically to help first-time buyers, and to enable people to get a foot on the housing ladder, including, for example, the homebuy scheme, which was recently re-launched by the Government. Over the next few years, tens of thousands of couples will be able to benefit from that scheme.

I am enthused by what I have seen of the prototype £60,000 homes. They address some of the problems that I have experienced with planning applications for new housing developments in my constituency, which all too often are poorly designed, lack ambition in terms of environmental sustainability, and are submitted with minimal public consultation. When will the “How to Win at Housebuilding” toolkit for local authorities and other social housing providers be introduced, so that they can be given better guidance on how to tackle some of those issues?

My hon. Friend is absolutely right. When the competition was launched by my right hon. Friend the Deputy Prime Minister, there was huge scepticism about whether it was possible to design a spacious, high-quality, eco-friendly house with a construction cost of £60,000, but he showed that that was possible. Now, we are building eco-homes that have the “lifetime homes” standard and are very spacious. We hope that, through the competition, local authorities can hold their own competitions, asking developers to build houses to the same design standards. I hope that that toolkit for local authorities will be available before Christmas.

The Secretary of State referred to her Government’s low-cost home ownership schemes, and in particular the homebuy scheme. Can she explain why the grand total of homes sold under the social homebuy scheme, according to her parliamentary answer in Hansard on 4 September 2006, is just one?

I accept that we need to do far more—[Interruption.] We need to build more social homes. I would be grateful if the hon. Gentleman confirmed that he will match our real-terms spending commitment to build more social houses. We need to examine, together with registered social landlords and housing associations, why more people are not taking up the option of a social homebuy scheme, and we are determined to make the scheme attractive to people who want to buy a part of their social home. Over the next few months, and in the run-up to the pre-Budget report and beyond, we will develop a shared equity package that will make the scheme much more attractive, both to registered social landlords and to tenants who may want to make use of the scheme. The hon. Gentleman is absolutely right that we need to do more. I would be grateful if he confirmed that he will match our spending pledges.

This is laudable, but there are such disparities in land values that it becomes a drop in the ocean. When will the Government do something about taxing land values to even up the opportunities to build the houses that meet local housing needs?

The hon. Gentleman is right to say that there is a strong theoretical abstract tax argument, because taxing land values is a decent way of raising money in a way that is fair to lots of people. He will know, too, that there is a priority and an imperative from Government to have infrastructure development which supports housing in all its forms so that we do not build housing in isolation from thinking about economic prosperity and links to our towns and cities. That is why the Department for Communities and Local Government, together with the Treasury, is working to develop a planning gain supplement that will be based on land values and on the planning permission associated with that, so that we can use some of this resource to support the necessary infrastructure needs.

Does the right hon. Lady agree that affordability concerns not only the purchase price but running the house afterwards? How many of the £60,000 houses meet the target of a 40 per cent. reduction in energy use and a 40 per cent. reduction in water use; and how much reduction is there overall if, as I believe, none of them meets that target?

The environmental standards that have applied during the two years that this competition has been running have increased throughout that time. The houses that are being built now are of a higher standard than those that were built two years ago, and we are constantly raising the bar. The next phase of the design for manufacture competition will specifically ask bidders and developers to come forward with plans not only for homes that meet the 40 per cent. reduction but for carbon-neutral homes. Our ambition is that, through the way in which homes are built and developers think about constructing them, homes will become much more eco-friendly so that we can meet our carbon reduction emissions targets. However, we will of course continue to do more.