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Affordable Housing

Volume 777: debated on Tuesday 29 November 2016

Question

Asked by

To ask Her Majesty’s Government, further to the announcement in the Autumn Statement that they will invest £1.4 billion to deliver 40,000 affordable homes, how many affordable houses to rent they expect local authorities to build by 2020.

My Lords, our expanded affordable homes programme, with a total capital budget of £7.1 billion between 2016 and 2021, including the additional investment of £1.4 billion announced last week, will now fund a wider range of affordable housing, including affordable rent, rent to buy and shared ownership. Local authorities will be able to bid into this.

My Lords, I declare my interest as a Newcastle city councillor and an honorary vice-president of the Local Government Association. Could the Minister please explain the arithmetic underlying the Government’s claim that the £1.4 billion announced in the Statement will build 40,000 affordable homes, given that this appears to represent a cost of only £35,000 a home? Will he confirm the estimate of the chair of the Local Government Association, his noble friend Lord Porter, that the enforced reduction of council rents by 1% yearly until 2020 will cost councils £2.6 billion, which could have built, according to its estimate, 19,000 homes, while housing associations will suffer a loss of income of £2.7 billion, with a similar impact on their capacity to build affordable homes?

My Lords, as the Mayor of London, Sadiq Khan, said, this is,

“the largest sum of money ever secured by City Hall to deliver affordable housing”,

and no doubt he would have been more effusive if it had not been for political considerations. This is the largest affordable housing programme for 40 years, and social housing can bid into it too, as the noble Lord appreciates. This is all part of the programme of ensuring that we have 400,000 affordable homes in this Parliament.

My Lords, I am a vice-president of the Local Government Association and have long believed that local government’s capacity for building more homes for social rent should be encouraged. Last week, the Chancellor said:

“One person without a home is one too many”.

Do the Government accept that the main reason for people not having homes is the sheer cost of housing and that there is an urgent need for more social rented housing? Will the White Paper on housing supply due before Christmas empower local councils to get building?

My Lords, first, the White Paper will be a far-reaching one and will look at many issues. Self-build, for example, will be there, as will purpose-built—what we could call prefabs for the 21st century. This is, as I said, the most ambitious programme for affordable housing for 40 years. It is clear that we need to look at a range of tenures, as the noble Lord indicates, but of course social housing being subject to a greater subsidy means that if all the money is targeted at social housing, we would be building fewer affordable houses across the piece. There needs to be a balance. As I have indicated, it is for local authorities and housing associations to bid in for that money.

My Lords, will my noble friend confirm that local councils will provide enough allotments when all these houses are built?

My Lords, I know that that is a subject dear to the noble Baroness’s heart. We are concerned about allotments in the department—as she will know, we are ensuring that they are not part of the brownfield sites agenda, so they are safe from that. I am sure that local authorities will have heard what she has had to say and will heed it.

My Lords, is not the real problem the cost of land for housing development in the United Kingdom? When sold for agricultural purposes, land can come out on average nationally at £20,000 a hectare, whereas when that same hectare of land—at the stroke of a planner’s pen—is turned into land for housing, it can be worth anything between £1 million and £5 million? Is that not the real problem we have to sort out in this country?

My Lords, the noble Lord is right about the cost of land—it is excessive, although of course it varies according to which part of the country one is looking at—and this perhaps ties in with the last question and the answers to that. It is far cheaper to build affordable housing in most parts of the country outside of London. I have looked at figures for the east Midlands, where it would be well under half the cost, and it is a factor. But it is a fact that successive Governments have not built enough. We recognise the need to build more affordable houses, which is why the housing White Paper will be ground-breaking—not to mix metaphors—as we tackle this problem going forward.

My Lords, in the financial year 2015-16, the Government’s own statistics show that just 6,550 homes for social rent were completed. That is the lowest number since records began and far below the just under 40,000 completed in the years 2010-11. Would the Minister agree with me that whatever the value of other forms of affordable tenure, only social rented housing is going to deal with the problem faced by the most disadvantaged communities? Will he further tell the House what the Government are doing to address this rapid decline in the provision of this form of housing?

My Lords, the right reverend Prelate is right to the extent that we need a balance with social housing. As I have indicated, the Autumn Statement has concentrated on ensuring that a balance of different tenures will be looked at. We recognise the role of social housing, which is vital. We recognise the role of affordable housing as well. On affordable housing more widely, of the 893,000 homes that have been built since April 2010, 313,000 were affordable and two-thirds of those were for affordable rent. However, the right reverend Prelate is right that social housing is also crucial.

My Lords, the Government should be congratulated on doubling the amount of housing starts since the crash, but still not enough houses are being built. The cost of land is one issue but one of the other barriers is local residents’ concern about the look, feel and quality of design of new housing. What is my noble friend doing to ensure that these aesthetic considerations are at the centre of the Government’s housebuilding strategy?

My noble friend is right about starts, which are up considerably, particularly local authority starts. The number of local authority starts in 2014 was running at just under the level of the number of local authority houses built in the 13 years under the Labour Party, so we are getting council home starts right.

With regard to the issue he raises about design, it is undoubtedly a factor that people want to see designs that are aesthetically pleasing. I think self-build will help to contribute to that; the evidence from the Continent is that self-build, for obvious reasons, tends to be better. Perhaps counterintuitively, the modern prefabs are actually very attractive. I saw a poll in the Daily Mirror suggesting that even when they were called prefabs, support for them ran at 67%. So they too will help to better design homes, which helps the general agenda.