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Housing Market

Volume 825: debated on Thursday 17 November 2022

Motion to Take Note

Moved by

That this House takes note of the multiple problems affecting all tenures in the housing market in England; and the case for a coherent strategy to encompass the social, economic, and environmental aspects of housing and construction.

My Lords, there has been no shortage of reports on housing of all tenures over the past 10 years. There is a general consensus that our housing market is not fit for purpose. We are not building enough new homes; most houses that are built are unaffordable except to those on above average earnings; young people find it impossible to get on to the housing ladder; we have a growing elderly population in homes not adapted to suit their needs; and more and more people are being forced into the private rented sector.

The House of Lords Built Environment Committee addressed many of these problems in its 2021 report and stressed the need to improve housing supply, saying

“too many people are living in expensive, unsuitable, poor quality homes.”

I am sure that all these issues and more will be raised in this debate. I will focus most of my contribution on social and supported homes, but I start with some very basic facts.

Looking at affordability, the latest ONS figures show that the average UK house price was £296,000 in August 2022, up 14.3% over the previous year in England. Prices in England have gone up by 76% since 2012. Despite regional differences, all areas have experienced increased prices. Average house prices in London, despite it having the lowest annual house price growth rate, remain the most expensive of any region in the UK. The ONS also estimates that full-time employees can typically expect to spend around 9.1 times their workplace-based annual earnings on purchasing a home in England, compared to 3.5 times in 1997. The number of new social rented homes has fallen by over 80% since 2010. The Government committed in their 2019 manifesto to build 300,000 new homes annually by the mid-2020s. I hope the Minister will tell the House what plans are in place to deliver on those numbers, given the stark facts I have listed.

The Grenfell Tower tragedy of June 2017, in which 72 people lost their lives in a high-rise fire in west London, focused political attention on social housing and the relationship between tenants and landlords. The Government’s response has been painfully slow. Although they have begun to make changes, as the right reverend Prelate the Bishop of Chelmsford said in a recent debate, there is a need for significant investment in new social housing and a comprehensive housing strategy.

We currently face a grave affordable housing crisis which continues to worsen, with 4.2 million people currently in need of social housing in England. Understanding the scale and types of housing need across the country is essential for planning effective policy responses and informing the debate around the need for new homes. People in Housing Need, a report published by the National Housing Federation last December, found that half a million more families are in need of social housing than are recorded on official housing waiting lists. Two million children in England—one in every five—are living in overcrowded, unaffordable or unsuitable homes. Some 1.3 million of these children are in need of social housing, as this is the only suitable and affordable type of home for their families.

Need for social housing has risen in all parts of the country, yet the supply of social rented housing has fallen, as I have said, by 85% since 2010-11, with the number of social rent homes available for letting each year also falling since 2014-15. We are living through a severe crisis of housing supply and affordability, which is increasing housing vulnerability. Long-term investment in social housing would provide people with suitable homes that they can afford and support the Government’s commitment to level up disadvantaged communities across the country. Social housing brings down the housing benefit bill, supports better health and well-being outcomes and reduces reliance on temporary accommodation.

Last year, housing associations built more than 38,000 new homes. Building these homes directly added £2.1 billion to the national economy, supporting more than 36,000 jobs. Housing associations in England currently provide 2.8 million homes for 6 million people, housing 11% of the population. The lower rents they charge save tenants £9 billion annually, making significant savings for the Treasury by bringing down the housing benefit bill. However, current inflationary pressures are having a significant impact on housing associations’ ability to deliver new developments. According to data commissioned from the Centre for Economics and Business Research, material costs for repairs and maintenance have increased by 14% and it is 12.3% more expensive to build new homes than it was last year.

Planning reforms included in the Levelling-Up and Regeneration Bill would replace the Section 106 agreements with a new infrastructure levy. This would have significant implications for the delivery of new affordable housing. Although Section 106 is not perfect, it delivers significant numbers of affordable homes; currently around 50% of all new affordable housing is delivered in this way. As it stands in the Bill, the infrastructure levy would enable local authorities to divert developer contributions away from affordable housing and towards other unspecified forms of infrastructure. Around two-thirds of Section 106 proceeds currently go towards affordable housing, so this would represent a dramatic tilt away from affordable housing delivery when demand for it is increasing all over the country. Will the Minister tell us what steps the Government are taking to ensure that their new infrastructure levy does not result in a net loss of affordable and social housing delivered via the planning system?

The current energy and cost of living crisis urgently solidifies the importance of energy-efficient homes for the future. England’s homes produce more carbon emissions every year than are produced by all the country’s cars. Much of the country is living in draughty homes that are not fit for purpose, which not only has an impact on the environment and the future climate but leaves many unable to afford to heat their homes. It is imperative that we decarbonise all homes in England, to reach the national net-zero targets by 2050. The social housing sector is the best place for the Government to start. The quantity and variety of homes within the sector mean that there will be more opportunities to deliver change at scale and provide the market mechanisms required to build up supply chains.

It is vital that the energy efficiencies of homes are greatly improved. Over 60% of social homes are certified EPC C or above, but other tenures average just under 40%. An immediate commitment to long-term retrofit funding will do wonders to move people away from gas and prevent residents moving into fuel poverty. Will the Minister protect the existing social housing decarbonisation fund? Can she tell the House when the Government will release the remainder of the £3.8 billion investment up to 2030?

The horrific tragedy at Grenfell Tower has shown that more needs to be done to ensure that tenants are listened to by their landlords when they talk about issues related to quality and safety. Currently, 23% of privately rented homes are non-decent, rising to 29% of homes privately rented by people receiving housing support. Some 16% of owner-occupied homes and 12% of social housing homes are currently non-decent. The recent appalling case in Lancashire reinforces this point.

Social housing landlords have been working to encourage a culture of transparency. Some 207 housing associations have signed up to the Together with Tenants charter, which has developed relationships of mutual trust and respect in over 2 million homes. The Social Housing (Regulation) Bill is a welcome step to empowering residents through stronger consumer regulations. Does the Minister agree that any measures brought forward must be meaningful to residents but also proportional to the capacity and resources available for housing providers of all sizes?

I now move on to supported housing. Good-quality supported housing transforms lives. It gives people choice and provides tailored, person-centred support that is vital to their resilience, health and well-being. Residents with physical and mental health needs benefit from specialist homes and services, and live independent, healthy lives. Supported housing can be a lifeline for older people and those with long-term care and support needs, including learning disabilities, autism and mental health conditions. This vital housing resource is facing a number of acute funding pressures which represent a serious threat to its long-term future. Against a backdrop of reduction in commissioning, the current inflationary pressures are crippling supported housing services, with increases in energy costs, costs of repairs, maintenance, building safety upgrades, legal and insurance costs and the costs of cleaning materials. The sector is also experiencing significant issues with recruitment and retention of staff, largely due to the low levels of pay providers are currently able to offer.

The cost of providing supported housing schemes is much higher than in other tenures. Operating margins for supported and sheltered housing schemes are tight and are on average 8% lower than social housing lettings overall. These margins have become only tighter as costs have risen across the sector. For example, one small supported housing provider I know of is currently operating on a very thin margin of 0.9%. One medium-sized provider recently saw bills for its gas and electricity increase by 100% from last year to this year, from £1 million to £2 million, adding that if it had to go out to tender at this point, the bill would come to £5 million. Some housing associations are considering pulling out of supported housing provision altogether. Given the unique funding pressures facing this vital part of the sector, can the Minister tell us what the Government are doing to improve funding certainty for supported housing providers?

The Government have produced a number of policies to address some of the issues I have outlined, but they have made little or no progress on the underpinning problem: we are not building enough homes, and we are not remediating enough of the existing homes which form the vast bulk of the housing market.

In conclusion, it is clear that we need a joined-up, long-term, outcomes-based strategy for housing people on lower incomes. Reform in the sector is often piecemeal and disjointed, as illustrated by the fact that we have had five different Housing Ministers in the past year and 14 different Ministers since 2010. Affordable housing is a key driver of economic growth. Managing and maintaining housing associations’ existing homes directly adds £11 billion to the national economy annually. Housing associations are an essential part of the housing market. I hope that the Minister will agree that it is vital that they are able to continue this contribution and deliver much more.

My Lords, I congratulate the noble Baroness, Lady Warwick, on securing this debate and on her introduction to it. It is strange how rarely we discuss the housing crisis in this country, since I believe it is the root of most of our social problems and many of our economic ones. I have tried to raise it from time to time and have found that there has been a tendency to ignore the issue.

I once made a speech in the House of Commons which was reported in the local newspaper with the headline, “MP says cure for housing crisis is to build more houses”. I have often complained about the inaccuracy of headlines relating to speeches I have given, but I have to say that this was spot on. That was exactly what I said, and what I want to say today: the cure to the housing crisis is building more homes. I thought this was uncontentious, but the headline sparked controversy in the columns of the St Albans Observer, with people writing in to say, “How can our MP say anything so stupid as to argue that the cure to the housing crisis is building more houses? Everybody knows that it is about simply keeping house prices down, because they are artificially high”—no, they are high because there are not enough houses. It is not that the shortage is caused by the houses being expensive.

Others said that the cause of the problem was mortgage interest rates or deposits. No—however much we fiddle around and subsidise or regulate mortgage interest rates or deposits, that does not create a single extra home for anyone. We cannot by changing the price of a bottle get a quart into a pint pot. We have to build more homes.

Others said that there are plenty of affordable homes in the north of England, the regions or the nations of the United Kingdom. Even if that is true, in most of our regions the price of houses relative to incomes in those areas is still exceptionally high compared to what it was historically. Even if they had a point, who is going to force people to move to the north, Northern Ireland, Scotland or Wales? When I gently suggested to people in my old constituency that perhaps they were volunteering to move themselves, they were shocked. That was another vote lost.

We have to face these arguments and ask ourselves why we have such high house prices in this country and at this time, especially given that the rate of births is below the rate of deaths. We are not creating more households domestically to create this demand for housing. Until recently, the main driver of demand for housing was that households were becoming smaller. As people left home earlier or lived longer after their children had left home, so that there were only two instead of four in the household, or after their partner had died, so that there was only one instead of two, average household size was coming down. This was also aggravated by the sad break-up of families through divorce or separation. That used to mean we had to add 0.5% to the housing stock every year to cope with smaller households.

That has come to an end. Young people are now unable to leave home and are leaving later. In 1999, 2.4 million adults aged between 20 and 34 lived at home with their parents. By 2019, 3.5 million people in that age group lived at home with their parents. So what is the reason?

The main reason, which I suspect no one else in this debate will mention, is not migration into the south of England or London from the rest of the United Kingdom. That is often the reason given, but in the last two or three decades there has been a net outflow from London and south-east England to the rest of the UK. The inflow is from abroad. We have seen mass immigration into this country on a scale never before seen in our history. We know that the official figures from the last decade understate the numbers coming here. We found, when we asked European residents to register, that there were 2 million more of them than we knew about. Over the last decade, the official figures show a net increase to our population of 2 million from those coming to settle here from abroad.

That is equivalent to our having to build cities the size of Nottingham, Derby, Leicester, Middlesbrough, Carlisle, Oxford, Exeter, Portsmouth and Southampton, every decade, just to keep up with the net inflow from abroad. They are predominantly young people of childbearing age, so they soon have families. That is a great joy for them, but it means that the demand for housing increases. I am talking about legal migration into this country, not the boat people, whose numbers are very small compared to the scale of legal migration into this country.

We have to be honest about this and recognise that we have a simple choice. Either we continue treating this country as if it was like Canada, Australia or America, with large open spaces to populate, or, if we allow a continued net inflow of 200,000 or 300,000 into this country, we have to build extra houses on top of the demand of the domestic population that is already here. We can strive to reduce the inflow, but we will still have to build a lot of houses and there will still be a lot of objections to that housebuilding. I do not mind which side of the debate people take, as long as they are honest about it. If they say, “We want to see mass immigration into this country and we are prepared to build all those extra properties every year—the equivalent of all those cities every decade”, that is fair enough, but they may oppose that.

In my constituency, I invariably found that the Lib Dems both criticised me when I raised the issue of immigration and opposed every building project in the constituency. Before the last election in which I stood, the great and good 1,000 people who belonged to the civic society in my constituency threatened to run a candidate against me, specifically on the issue of housing, if I did not agree to oppose all new housebuilding in the constituency.

This is the sort of pressure which Members of Parliament face. I stood up to it. They eventually backed down on the condition that I held a big public meeting during the campaign, at which they would organise opposition to housebuilding in the area and expose me as someone who would not oppose it. I was with the other candidates, and I opened by saying that this was a moral issue. Did we want homes for our children somewhere near to where we live, or not? Did we think the next generation had to live at home until it was probably too late for them to form a family, or not? We have to accept the building of houses and find the least bad places in which to build them. We must not put our heads in the sand and pretend that they are not necessary. Because I took a moral position, the rest of the candidates were forced to follow suit. By the end of the evening, 400 people who had arrived at that hall, screaming that we should not have any more housebuilding, had largely accepted that we should.

We have to face up to this opposition to housebuilding, and we have to be honest about it. I believe too that we need to reduce the net inflow from abroad if we are to make the problem manageable. We cannot do what too many people try to do, pretending we can have massive immigration into this country and not build the extra homes this will require.

My Lords, I welcome the noble Baroness, Lady Taylor of Stevenage, to this House. I look forward to what will no doubt be a thoughtful, considered and pertinent contribution to this debate. We worked constructively alongside each other in Hertfordshire for many years. I hope to do so again in your Lordships’ House.

I will make a quick aside to the noble Lord, Lord Lilley. I was dubbed “the pro-development mayor” by my political opponents, so nimbyism is not confined to one party.

I thank the noble Baroness, Lady Warwick of Undercliffe, for bringing forward this important debate. Quite rightly, we seem to be talking a lot about housing in both Chambers at the moment. As the noble Baroness cogently argued, we need a cross-sector housing strategy—one that spans 10, 15 or even 20 years. To succeed, I believe that it must have some degree of cross-party consensus. We on these Benches welcome this debate and the fact that the Labour Party, in common with us, is clearly putting housing front and centre of its political thinking. We too have just finished updating our housing policies, and it is not surprising that there appears to be much agreement, as there needs to be.

Across the many pressure groups, professional institutions, think tanks and government departments that provide us with many excellent briefings and statistics, there are clearly many areas of broad consensus, but none more so than the private rented sector, on which I will centre my remarks.

Change is so slow in coming. It is now more than three years since the then Prime Minister, Theresa May, declared with a fanfare of trumpets and a roll of drums that the Government would abolish no-fault evictions. In the words of the off-chanted song, why are we waiting? In that time, not only have hundreds of thousands of tenants been evicted through Section 21 notices, but more than 45,000 households have been threatened with homelessness as a result of being served such a notice. When will the renters reform Bill, based on the recent A fairer private rented sector White Paper, come to Parliament? Where is the timetable? We were promised that it would be enacted during the 2022-23 Session. According to an Answer given recently in the other place, this has now slipped to “at some point during this Parliament”. Will it abolish Section 21 evictions, or has there been some pushback from landlords?

Noble Lords may sense my frustration. The sector has always been characterised by insecure tenancies and high rents, and often poor conditions. In England, there are more than four million privately rented homes, housing more than 11 million people. There will always be a need for a decent, well-regulated private rented sector, but we do not have this now. House prices are getting beyond most low-waged and many median-waged workers, who cannot save enough to get a deposit together, given the significant rise in house prices and what they pay in rent. They can often be paying more in rent than a mortgage costs, but without the bank of mum and dad or an inheritance to provide the deposit, they are going to be renters for most of their lives.

This situation has become more acute in recent months, with letting agency statistics showing far fewer properties available to rent. Rightmove’s latest data shows that in the third quarter of this year, tenant demand for properties increased by 20% compared with the same quarter last year, and the number of properties available to rent was down by 9%—a loss of some properties, undoubtedly, to the more lucrative short-term lets market. Even the Royal Institution of Chartered Surveyors has warned of rents increasing as a result of the rise in tenant demand; at the same time, the number of new landlord instructions is falling.

I have been shocked by local anecdotal accounts of the fierce competition for properties and the lengths desperate renters are going to in order to secure a property. There is evidence from letting agents of a beauty parade of renters who are competing for properties, resorting even to sending in CVs of their well-behaved children and photos of their equally well-behaved dogs, alongside the more obvious deals of offering more months’ rent up front, agreeing to do some repairs and decorating—in short, anything to get into a property. In this climate, there are no prizes for guessing who does not get the house. The like of this has not been seen before, as the country faces a financial crisis—we are now officially in recession—and a winter of much discontent. Thus the need for urgent action, and hence the frustration.

If fast-tracked through the system, the rental reform White Paper, with its 12 excellent proposals—again, broadly agreed on—could have eased the situation for many as the winter crisis looms. In the meantime, will the Government consider a two-year rent freeze while the current economic pressures are expected to reach their peak?

The Government have decided once again to freeze local housing allowance, which will push millions of hard-pressed tenants to breaking point. Will they reconsider this, if only as a temporary measure? Does the Minister agree that there is an imperative to prevent evictions as winter approaches?

Latest government figures show homelessness in England rising by 11% in three months. Also according to the Government’s own figures, eviction from private tenancies is the second leading cause of homelessness. What worries me most about these recent statistics is that, despite being in full-time work, 10,500 households were found to be homeless or threatened with homelessness. This is the highest number of people in full-time work recorded as homeless since the Government started collecting this data. There are massive implications and messages in that one statistic.

Let us not forget that those statistics are people: families, all wanting the same as we do. Eventually they tip up to their local council offices, which are cash-strapped because we have had year upon year of cuts. They are met by fewer council officers—because of the cuts—who have had years of rationing a scarce resource: namely, social housing. Given the increasing number of families and individuals in dire circumstances, that is a really tough job. In effect, they are having to play God, trying as fairly as possible to allocate a decreasing number of homes to a greater number of people. I am certain that others will elaborate on this sector.

My one plea to the Minister is: will the Government finally agree to allow councils to keep 100% of right-to-buy receipts with no strings attached, other than to build replacements? I look forward to the answers to the questions asked by the noble Baroness, Lady Warwick, on social housing. There will always be a need for a social rented sector, and recent legislation to improve it cannot become effective quickly enough, as the recent death of young Awaab Ishak, who was living in social housing, proves.

Some 21% of homes in the private rented sector are non-decent, according to the most recent English Housing Survey. Making all homes decent is surely a laudable, ambitious aim for any Government, doing the right thing by people as well as creating jobs and saving money for the NHS. A recent Building Research Establishment report found that poor housing costs the NHS £1.4 billion a year, and society as a whole £18.5 billion. I say to the Chancellor that these are potentially significant long-term savings, and just think of the considerable long-lasting good.

Is there the political will to do this? It is clear that we are going to be more heavily reliant on the private rented sector than ever before, and it is in need of urgent reform now, not to be pushed back. Does the Minister have a reason for the delay, other than another new Prime Minister and yet another Housing Minister? In view of the worsening economic situation, will the Government consider pulling together all the “could do” solutions that have broad consensus and fast-tracking them to help ease the crisis that will inevitably worsen over the winter and the next two years?

Finally, how will local authorities be given the support to help those increasing numbers who will inevitably end up at their doors or on their streets?

My Lords, it is a pleasure to follow the noble Baroness, Lady Thornhill, and I thank her very much for her kind comments.

It was with the greatest humility, gratitude and anticipation that I received the news that I was to be nominated by Sir Keir Starmer to join this House—something that would never have come into my wildest dreams, for reasons your Lordships will learn of when I introduce myself. I start by thanking Keir for my nomination, and my two great friends and supporters who got me through the unique experience of being introduced to this House, my noble friends Lord Kennedy of Southwark and Lady Wilcox of Newport. I thank sincerely my noble friend Lady Smith of Basildon, our Leader in this House, who has shown me the greatest kindness and encouragement, and noble friends on these Benches who have given me such a warm welcome, as have noble Lords from across the House.

The noble Lord, Lord Soames, and I were introduced to this House on the same day, and indeed had our appointment with Black Rod together. It struck me then how extraordinary it is that he and I, coming from almost polar opposite ends of British society, could be entering your Lordships’ House together—such is the strength of our country and our Parliament. I thank the noble Lord, Lord Soames, for his courtesy and kindness.

On my second day here, I approached the Peers’ Entrance with some trepidation, impostor syndrome on full throttle. The day before, at my introduction, I had been accompanied by my family, friends and supporters, but this felt very different. I did not need to worry. As I showed my pass, the doorkeeper greeted me with the kind words, “Do come in, my Lady, and welcome back home.” That, I have come to learn, is the culture and warmth of this place. From my very first appointments with Garter, Black Rod and the Clerk of the Parliaments to my day-to-day interactions with the doorkeepers, staff and catering teams, everyone has been welcoming, helpful, knowledgeable and highly professional. Thank you so much to all of you; it is a truly exceptional team.

I thank my noble friend Lady Warwick of Undercliffe for securing this important debate today and introducing it. It gives me the opportunity to make my first speech in this House on a topic so close to my heart and so interwoven into my life and career that it has literally shaped who I am and what I have done. That is because my hometown, the place where I was born, brought up and still live, is Stevenage, Britain’s first post-war new town; a town that was built to house people, to provide the homes for heroes that had sadly not been delivered after the First World War, and to keep that promise after the ravages that London and other major cities had suffered during the Second World War. Our new towns were born from the inspirational vision of the same post-war Labour Government that created our NHS and the welfare state, including the National Assistance Act 1946 and the Transport Act 1947. Stevenage was designated to be the first of this new generation of new towns, almost exactly 76 years ago, on 11 November 1946.

My parents, both Londoners, married in 1954. They had searched endlessly for a home in London that they could afford, but with mum a trainee pharmacist and dad recently demobbed from national service in the Royal Air Force and embarking on his engineering career, there was little that they could afford. Then dad was offered a job with English Electric, soon to relocate to Stevenage, and they were offered a three-bedroom house along with the job. My parents, like so many others, became new town pioneers. This has given me the extraordinary privilege of growing up not only in my hometown but with my hometown, which is just 10 years older than I am.

The vision for new towns was set out in the New Towns Act 1946 and championed by one of our local heroes, a late Member of this House, Lord Lewis Silkin. He did not always have an easy ride during the passage of the Bill. It seems that planning was just as controversial in 1946 as it is now. When he arrived in old Stevenage for a public meeting relating to the new town, the railway station sign had been removed and replaced by angry residents with one saying “Silkingrad”. Lord Silkin held his nerve. His vision was to enact the Abercrombie plan for a town that was planned thoroughly in advance of being built, with segregated residential, commercial and industrial areas, and good connectivity by road and rail; a town planned to have connected but self-contained communities, each with their own health, education, leisure and shopping facilities, and with plentiful green spaces and access for all to parks and countryside. Importantly for today’s debate, it was to be a town with a variety of housing to meet the needs of working families of all income levels.

No one, especially me, will pretend that our new towns developed without their own challenges and issues. But my pioneering parents gave me and my sisters the opportunity to grow up in a strong, cohesive community. That is why, following a career where I worked in the defence industry, for John Lewis Partnership and, latterly, spent the most incredible 13 years as staff officer to the chief constable of Hertfordshire, my lifelong support for the Labour Party drew me to stand as a Stevenage councillor, to give something back to the town and community that I love.

My first election was on 1 May 1997, a date emblazoned on the memories of most of us on this side of the House. I have been a councillor since then; I have led my council since 2006, and have been fortunate to contribute to the leadership of local government nationally through the Local Government Association since 2009. My specialism has been the labyrinthine world of local government finance, which is partly the key to unlocking the housing challenge that we face. That is why I want to focus on social housing today.

Between 1945 and 1980, local authorities and housing associations built 4.4 million social homes—more than 126,000 a year—but by 1983, that supply had halved to just over 44,000 a year. This followed a major shift in social housing policy, particularly, but not exclusively, the right-to-buy scheme of Margaret Thatcher’s Government. Failure to replace the stock bought under right to buy means that, in Stevenage, our stock has fallen from 32,000 to less than 8,000 homes. The promise to our pioneers that their children, grandchildren and parents would be housed has been broken.

The retained right-to-buy funding regime permits only 40% of the cost of constructing a replacement dwelling to come from right-to-buy receipts. Failing to take account of rising property, land and commodity prices in the construction industry, the shortfall on a new-build property in my area is currently £186,000, forcing us to use additional borrowing, with a trade-off between repairs and management of existing stock or building private homes for sale simply to fund any replacement homes at all.

Over 2 million sales of social homes have taken place, but research shows that over 40% of these are now rented privately. Affordable social housing turned into unaffordable private rented housing, with a consequent catastrophic effect on family budgets. It is also economically illiterate, as housing benefit spending has risen by 50%, peaking at £24.3 billion in the last year of recorded statistics. The average monthly rent for a two-bedroom privately rented property in my town is now £312 a week, against the local housing allowance of £195. No wonder there is a cost of living crisis.

Against a target of 300,000 homes a year, we are currently building a little over 100,000. This problem will not get better unless we turbo-charge the number of homes of all tenures, particularly social housing, that we build in this country. Let us get back to those first principles of our new towns—of building communities and homes, not just places and houses. Let us take the design and detail of our development seriously and, to meet the challenge we have that Lord Silkin did not, let us build sustainably, so that we do not exacerbate the backlog of £204 million that I will need to decarbonise 8,000 social homes in Stevenage.

We all know that a safe, warm, secure home is the foundation stone for every individual, family and community. My passion for housing is undimmed, as is my pride in Stevenage, the town I grew up with. I finish by quoting Lord Silkin:

“The new towns can be experiments in design as well as in living … This combination of town and country is vital … I believe that if all these conditions are satisfied, we may well produce in the new towns a new type of citizen, a healthy, self-respecting, dignified person with a sense of beauty, culture and civic pride. Cicero said: ‘A man’s dignity is enhanced by the home he lives in’.”—[Official Report, Commons, 8/5/1946; col. 1091.]

Let us renew our vision, our focus and our inspiration so that everyone in our country, and indeed future generations, will have the opportunity of a home that enhances their dignity. Thank you.

My Lords, I am delighted to follow the noble Baroness, Lady Taylor of Stevenage, the “of Stevenage” being particularly significant. I congratulate her on a splendid maiden speech. No-one could bring a more relevant lifetime of experience and understanding of housing issues, for which we are deeply grateful. I know she brings considerable experience as a county councillor for Hertfordshire and as leader of Stevenage Borough Council. I must declare my own interest, in passing, as a past president and now a vice-president of the Local Government Association. She was deputy chair of the LGA from 2008 right through to 2017 and I know she was a huge success in that role.

Stevenage’s motto is “The heart of a town lies in its people” and I think the heart of the noble Baroness, Lady Taylor, lies in the town she has served continuously for over 25 years. Times may be tough for local government, but I am certain that the noble Baroness will ensure that its voice is heard loud and clear in this Chamber.

I thank the noble Baroness, Lady Warwick of Undercliffe, for leading this most timely debate and I echo her view that the nation’s housing is in a critical state. But the acute shortage of the homes we need has accumulated over decades: for over 30 years, the number of extra homes built each year has been less than the number of new households that have formed. These years of undersupply are finally catching up with us.

Dramatically fewer people have been able to get on the housing ladder, with owner-occupation for those aged under 30 falling from 47% 20 years ago to under 25% today. Now those wanting to buy face even greater problems, made worse by the hike in interest rates following the fateful mini-Budget. Over 1.5 million households are queuing for social housing from councils or housing associations, but that sector has halved in size, from one-third of the nation’s homes to just 17%, while social landlords face a mountain of extra building and borrowing costs that will hold back their new-build affordable housing programme.

For more and more people, the only option is the private rented sector, which has doubled in size during the first two decades of this century. However, here we are seeing falling numbers of available lettings because landlords, deterred by higher interest rates on top of other disincentives, are exiting the market or, in some areas, switching to Airbnb and very short-term lettings.

Demand is up by 20% while supply is down 9%, as noted by the noble Baroness, Lady Thornhill. With consequent fierce competition for privately rented properties, young people are spending half their income on securing a rented, not always decent, flat. More couples must postpone having children indefinitely. Down the income scale, overcrowding and slum conditions exacerbate health inequalities and put further strains on the NHS. Rent increases, coupled with frozen levels of housing allowances, push more households below the poverty line. Councils spend over £1 billion a year on temporary accommodation. Street homelessness has risen again and, of course, there is simply nowhere for refugees and asylum seekers to be housed.

There are a dozen urgent measures that could and should provide temporary relief, but we also need to address the underlying cause of this national failure. What would make the biggest difference to getting more homes built—as the noble Lord, Lord Lilley, suggests we need to do—and galvanising the process of reducing the disastrous housing shortages?

Top of my wish list for fundamental change is the adoption of the mechanisms for land value capture advocated by Sir Oliver Letwin in his 2018 review. Sir Oliver got to the heart of why we have been failing, year after year, to build what we need. Yes, we should resource our local planning departments to speed up the planning process, but that is not why we get such a slow build-out of new developments and build so few new homes affordable to the half of the population on average incomes or less, or why we have developments that continuously fail us on so many counts. We also see SME builders being excluded, despite those firms often being more in tune with local needs, the local vernacular and the local labour market.

Leaving to one side the handful of excellent new developments by enlightened landowners and non-profit developers, the UK is simply not getting the quantity or quality of homes we need. The reason, says the Letwin review, is that we have handed over the decision-making process for all major housing developments to the oligopoly of volume housebuilders. These companies initiate each new scheme: they secure the land, they produce their plans and they build their development, in their own time and at a speed that suits them. The role of the local planning authority is confined to raising objections and fighting back, without the staff or the budget to insist on an alternative development that would genuinely meet the requirements of the locality.

The housebuilders’ business model requires them to fight, with their lawyers and consultants, for the minimum number of affordable homes—the maximum number of properties they can squeeze on to a site, with the least green infrastructure and the fewest amenities, and to build at a speed that ensures the continuing scarcity that drives up prices. Our system rewards the very actions by housebuilders most at odds with the public interest.

Instead, the Letwin review tells us we should take back control. Letwin puts the scale at 1,500 homes but his formula is just as applicable for 150: for every major development, land should be acquired at a price that relates to its current use—for example, for agricultural land, Letwin suggests paying no more than 10 times the agricultural value—with a master plan that determines what is built and parcels out sites to different builders and providers, for a range of uses and tenures. Having bought the land at a reasonable price, using compulsory purchase powers if necessary, a development becomes viable that actually and promptly delivers the social benefits missing today.

To achieve this upending of the current, highly unsatisfactory process, Letwin proposes local authorities establish arm’s-length development corporations, as is quite possible under existing law. These would borrow the finance to buy the site and capture the land value uplift. The development corporation’s master plan can then incorporate all the features of healthy place-making.

This approach follows the pattern of the garden cities and the new towns in a scaled-down version—the noble Baroness, Lady Taylor of Stevenage, pertinently referred to the technique of the new towns. The cost to the Exchequer is less for a much higher-quality outcome. This process accelerates delivery, removing the friction and delay from the housebuilders and the planners waging war, often for years.

I commend these Letwin recommendations and would greatly welcome the comments of the Minister. Let us address the root causes of our housing ills; let us take back control and start building what society wants and desperately needs.

My Lords, it has been a relatively short debate so far, but it has been a privilege to be here and listen to contributions and, inevitably, to the magnificent introductory speech of my noble friend Lady Taylor. I think it has set a difficult standard that not all of us reach.

We have a very broad subject before us. I am going to focus on the private rental market in London. It is arguable that, because of the nature of London, the private rental market is particularly important because of the people who come to London, how long they stay here and the sort of people they are. The problem is that the private rental market in London is failing.

First, I will say a word about London. It is, of course, the greatest city where all human life can be found. To pick up a point from the noble Lord, Lord Lilley, we welcome people to London from all over the world. They are welcome and we regard them as being a net benefit to our life—even taking account of the decent housing with which they must be provided. The important point is that the success of London is not counterposed to the success of the rest of the country. I would argue, though it is not always a popular argument, that the success of the rest of the country depends on a successful London. To a significant extent, because of the particular and distinct importance of the private rental market in London, the success of the country depends on a functioning private rental market in London. This echoes the point made by the noble Lord, Lord Lilley, that it is an economic issue; decent housing is not just about accommodation but about the whole economy and its success.

The 2021 census estimated that London’s population stood at 8.8 million. It is forecast to grow, heading towards 10 million on some estimates. Of course, that is a churning population: people come, and people leave. I find it difficult to understand why they leave—I have stayed. The private rental housing market in London does not serve the purposes of this rotating population. This is in the context of our worsening cost of living crisis; the fiscal Statement earlier today forecast that things are going to get worse over the next few years.

Already, more and more Londoners, particularly those in private rental accommodation, are finding it such a struggle to make ends meet and to afford their basic needs. They are faced with a situation where, as the GLA reported this year, in

“March 2022, the median rent for a privately rented home in London was £1,450 per … month, … twice as high as the median in England as a whole … London’s rents are so much higher than those of other regions that the median monthly rent for a one-bedroom home in the capital (£1,225) is higher than the median rent for a home with four or more bedrooms across all of the North and Midlands.”

Following the success at moving away from Covid—I am not suggesting that we have solved the problem, but we are in a favourable trend—rents are now increasing faster than the temporary respite they had during the Covid pandemic. Zoopla reports that average rents in London were 17.8% higher this July than they were in the year before.

As I have explained, London’s economic success depends on a successful privately rented housing sector, alongside an important role for social housing. I gave a speech on social housing in this Chamber last week on the Motion tabled by the noble Lord, Lord Moylan, in which I emphasised the importance of council housing. I will not repeat that, although it is worth repeating it again. I discussed Harold Macmillan’s success, when he was Housing Minister, of achieving the then Conservative Government’s target of 350,000 new houses a year, many of which, I assume, were in Stevenage—so it can be done. However, I will not address that on this occasion; noble Lords can read my detailed contribution in Hansard.

Instead, I will continue to focus on private rental housing. I do not go along with the idea of demonising private landlords. I do not assume that they set out to provide poorly maintained stock at excessive costs, but clearly there are problems. The GLA, which I will cite again, has undertaken a survey of private tenants, finding that

“55% of private renting households in London”—

only 55%—

“said they were satisfied with … their accommodation”.

In other words, 45% were dissatisfied—representing an increase from 33% two years previously. The underlying problem we must confront is the inevitable tension that arises between, on the one hand, the provision of a human service—in this case, housing, which should be a social right that is available, of a good standard and affordable—and, on the other, a service that is being provided commercially. As we operate it at the moment, it is to the detriment of the people who are in the private rental sector.

I am glad that the issue of Airbnb was mentioned, because that is creating particular tension in some areas of London. However, I am not talking about Airbnb or the high-value rentals available to those on high incomes; I am talking about the lower-cost housing for people on incomes that are lower than average and who cannot afford to buy, but who need or want to work in London for employment, family or other reasons.

There is the oddity and counterintuitive fact that it is often more expensive to rent than it is to buy the house, provided that you have some capital in the first place. People are in the fix that they cannot afford to save to buy a house, because they are paying too much in rent. It is in that light that, again, these GLA figures tell us that 40% of London’s private renters are likely to struggle to make their rent payments in the next six months—so we have an immediate crisis.

The mayor, Sadiq Khan, held a housing crisis meeting earlier this week with representatives of the housing sector, and they are calling for greater security and safety for London’s private renters. I support the mayor’s call on the Government to introduce a two-year rent freeze, analogous to holding down the cost of energy, to address the soaring costs of living in London. Such a freeze has been introduced in Scotland. The Government should represent the democratic mandate that the mayor achieved; he fought on the basis of achieving this rental freeze, and we should look to the Government to support him in achieving this policy.

My Lords, I particularly welcome the noble Baroness, Lady Taylor of Stevenage, to her place. I am aware of the substantial work that she did on regional development banking, which has been of particular interest to me since the 1970s, when I wrote a paper. I also liked her reference to Lewis Silkin, who in 1960 I met in Milan in Italy when I was a 17 year-old boy, and who advised me to join the Labour Party, having had a political discussion with me.

I want to concentrate my remarks on a controversial report on Exempt Accommodation from the Levelling Up, Housing and Communities Committee. At its heart is a disturbing commentary on the appalling conditions in which people in exempt accommodation are having to live. I need to quote directly from the report, because there is a desperate need for all of us fully to understand what is happening. The devastating attack on housing provision for the poor should be considered in the context of the report’s opening comments:

“it was surprising to have undertaken a piece of work that has shocked and alarmed us as much as this inquiry has … the system involves the exploitation of vulnerable people who should be receiving support, while unscrupulous providers make excessive profits by capitalising on loopholes. This gold-rush is all paid for by taxpayers through housing benefit.”

What an indictment that is of government housing policy. The report goes on to challenge “the quality of provision” and

“its … significant growth in some areas … and the exploitation of the system by people seeking to make profit from it”.

The report cites the impact on people, stating that:

“It is clear from our inquiry that some residents’ experiences of exempt accommodation are beyond disgraceful, and that some people’s situations actually deteriorate as a result of the shocking conditions in which they live. Where the very worst experiences are occurring, this points to a complete breakdown of the system … Areas with high concentrations of exempt accommodation can also attract anti-social behaviour, crime—including the involvement of organised criminal gangs—rubbish, and vermin”.

The report calls for a system of national standards for referral of those people in desperate need and proposes that local authorities take on that role. It calls on the Government to publish national standards, with powers for local authorities to enforce those standards which would include a referral process that works, proper care support and supervision, standards of housing quality and, most importantly, information that a provider would be required to give to the resident as to their rights. The committee regarded the whole problem as so acute that it warranted special additional funding.

In a series of dramatic statements on domestic abuse, the report flagged up its finding that

“organisations with no expertise are able to target survivors of domestic abuse and their children and provide neither specialist support nor an appropriate or safe environment”.

This is Dickensian stuff. The report seeks to ameliorate the position of those suffering domestic abuse, and proposed that

“where a prospective resident of exempt accommodation is a survivor of domestic abuse, there must be a requirement that housing benefit is only paid to providers that have recognised expertise and meet the standards”

of care in the Domestic Abuse Act.

The report revealed that, while extraordinarily some providers do not fall under the remit of any regulator, the patchwork of existing regulation was full of holes. It reports on an acute absence of data on exempt accommodation—which I found quite incredible—and then reveals that there is an absence of data and statistics rendering the committee’s inquiry

“unable to establish how widespread the very worst experiences are”,

and even

“how many exempt accommodation claimants and providers there are.”

It is a devastating report, perhaps one of the worst I have read during my many decades in Parliament. I say to colleagues: please read it. The report goes on with a call to the Government to urgently conduct a review of exempt housing benefit claims to determine how much is being spent. The committee felt that

“the current system offers a licence to print money to those who wish to exploit the system.”

The truth is that we are being taken for fools by those who are prepared to play fast and loose with our laws and ignore human rights.

There is one final recommendation in the report on the wider issue of authorisation. The suggestion is that the Government “end the existing exemptions” that registered providers enjoy from HMO licensing arrangements, and

“that the loophole relating to non-registered providers with properties containing six or fewer residents also be addressed so that they are brought within the”

whole exempt accommodation regime within the law.

This whole debate about exempt accommodation, which I knew very little about before reading this report, and I suspect that many Members of the House have little knowledge about, raises real questions about priorities in life and our treatment of those who have little and so often live in real poverty.

My Lords, it is a great pleasure to take part in this important and timely debate and I congratulate the noble Baroness, Lady Warwick, on leading it. I also greatly congratulate the noble Baroness, Lady Taylor of Stevenage, on her maiden speech, which showed us what we need and what we are missing. I liked a lot of what she had to say about the fact that it is communities and not just buildings we are talking about here. I must say that I had not heard Lord Silkin’s inspiring words before she said them at the end of her speech.

I am coming at this from the perspective of quality rather than numbers—quality and health. I suspect that I am probably the least knowledgeable person about housing in this debate. I have come to it rather late, after realising something I should have realised long ago about the extraordinary interconnections between health and housing and how absolutely fundamental they are. A number of noble Lords, including the noble Lord, Lord Lilley, have made the point that housing is a foundation for people’s lives. I think he said something about how many of our social and economic problems stem from poor housing within our society. I absolutely agree with that.

I have been gradually learning about housing and have been astonished to understand what major problems there are right across the entire system, from the inability to build the numbers that we say we are going to build, to questions of quality of construction and repairs and questions of planning. Within all that, there are some obvious health issues. I refer briefly to the tragic story of the young child in Rochdale who died very recently from mould in completely inadequate housing. I refer also to how, during Covid, we know that things such as lack of ventilation and overcrowding affected the lives of many, sometimes with fatal consequences. There are something like 2 million older households living in poor housing. As has already been said by the noble Baroness, Lady Thornhill, the NHS faces massive costs because of poor housing: one estimate is at least £1.4 billion annually. Of that, 60% was due to cold and around 30% to falls—two things that are preventable, but neither of which it looks as if in the near future we will see much improvement in. Of course, there are other issues here about independent living.

There are extraordinary interconnections between poor housing—which is what we are talking about—and health, and it is vital to get both right. This has a long history; indeed, the first Minister of Health was also a Minister of Housing. I am not going to suggest to the current Secretary of State that he may wish to add that to his other duties at the moment but, somewhere, the close connection between housing and health has got lost. This is a very clear example of why we need the sort of strategy that the noble Baroness, Lady Warwick, is proposing, which looks at it in the context of wider social, economic and environmental issues. I have been talking about health, but somebody else in this debate could equally stand up and talk about the environmental impact of poor housing and the fact that so much carbon is used, not just in the construction but on a continuing basis. I think it was the noble Baroness, Lady Taylor of Stevenage, who commented on how much finance would be needed in Stevenage to bring houses up to the required standard.

So there is a clear need for a new strategy that takes a really comprehensive view. As part of that, we obviously need to get regulation right. I am in fact not a great fan of regulation, having run teaching hospitals in Oxford and been very aware that ill-thought-through regulation can be extraordinarily damaging. But there is a need for less—in some ways—but smarter regulation here. I have heard plenty of examples—and we have just heard them again from the noble Lord, Lord Campbell-Savours—of where regulation does not cover the entire field, where there is conflict between different sets of regulations, or where there are policy conflicts. I am aware myself of policy conflicts where it is very difficult to get through planning some of the obvious things that are needed to improve environmental issues. There is a whole range of conflicts here.

However, I was surprised to discover, when I talked to the chief executive of one of the major housing developers, which produces very high-quality houses, about regulation—which obviously he did not particularly want—the point he made was that there is nobody who checks up on the regulation. This, I guess, must be known well to other people in the Chamber, but the surprising point that he was making is that there is a lot of regulation but not very much in the way of inspection. Local authorities and others have lost a lot of the staff who would otherwise be making sure that regulation was properly applied. The implication he left me with was that good developers of course pay attention to the regulations, but many others do not.

So there seem to be some major problems in the way regulation is handled at the moment. What are the levers that this Government are going to use, perhaps including regulation but maybe including codes of good practice or incentives? How will they ensure that in future we will not see more poor-quality homes being built? Because we are seeing poor-quality homes being built, partly through permitted development rights but also through other routes. How can the Government ensure that we stop the problem getting worse, let alone move forward to improve things?

We need a comprehensive strategy that covers social, economic and environmental aspects. There is plenty of expertise around. There are plenty of reports. My noble friend Lord Best spelled out the importance of Sir Oliver Letwin’s report of some years ago now and how it pointed to an essential problem underlying all of this. So, there is an enormous amount of expertise and we also need a clear vision of what this or any future Government seek to do with their housing strategy. While I and others have been talking about all the negative impacts of poor housing and poor maintenance and the impact they have on people, there is also a positive aspect here. It takes us back, of course, to the new towns and garden cities, to Port Sunlight and other aspects of past developments when people saw and understood that housing as part of the development of cities and towns is about enhancing life, about the ability to provide a foundation for people’s lives so they can thrive, and about their health and well-being, as well as everything else.

I will end on two final points. One is that we need to start to think about this in positive terms, addressing the problems but actually setting out a strategy that builds something that is positive for the future and sees this as the foundation of people’s lives and their ability to thrive, as well as being essential for their health and well-being. We cannot expect the nation to prosper successfully if we treat people’s homes in the way we are doing at the moment. I return to my final question. How will this Government ensure that there are no more poor-quality homes being built?

Margaret Thatcher had a vision of a property-owning democracy, in which citizens should own the dwellings they occupy. In 1980, the Conservatives’ Housing Act gave council tenants the right to buy their homes at discounted prices. Surely, the belief was that property owners are more likely to vote Conservative than are the dispossessed or people who are reliant on public authorities to provide their housing. Home ownership had been increasing since the 1950s, when roughly 30% of occupants were owners. Following the Housing Act of 1980, the growth of ownership continued, with the proportion rising to a peak of 70% in 2000. Since then, it has been steadily declining towards 60%.

Social housing in the form of council houses and flats had been steadily increasing since the 1920s. The expansion was at the expense of private renting, which often involved severely substandard dwellings. Since 1980, social housing has experienced a radical decline in consequence of the sale of the council properties and the cessation of council house building. Since 1990, the proportion of private renters has increased from a mere 12% to the present 20%, and we have heard much about the pathologies of the sector. In consequence of the failure to build sufficient numbers of houses, there is now a crisis and the shortage has led to inflated property prices. When these are affected by the current high rates of interest on mortgages, the impact on personal finances becomes severe.

In talking of home ownership, as I shall, one must be precise in the definitions, both of the nature of the properties and the conditions of their ownership. The majority of dwellings are flats, rather than houses, and the majority of the occupants of flats who are classified as owner-occupiers are, in fact, leaseholders who own a tenuous right to occupy their dwellings for a limited period.

Most newly built houses are nowadays sold to leaseholders, many of whom are reported to have been surprised to discover the limits of their ownership. There have been angry accusations of mis-selling. Leaseholding is an insecure and problematic form of tenure, which has been increasingly subject to abuses originating with the freeholders, who can be powerful and exploitative. The law grants leaseholders the right to buy the freeholds of their properties, but the cost of doing so is subject to a negotiation with the freeholder, who is in a position to make it unaffordable. There is an urgent requirement for legislation to reduce or eliminate the scope for abuses, but the Government have been slow or unwilling to act, in spite of promises to do so.

Building contractors, large and small, are responsible for enabling the abuses of leaseholders of newly built properties. Once the leaseholds of the properties have been purchased for the first time, the constructors are liable to sell the freeholds to a property company. A substantial price can be commanded because the freeholder will be able to derive a large income by charging the unwitting leaseholder exorbitantly for a variety of real or imaginary services.

One of these charges will be the ground rent, albeit that this will no longer be available on properties sold after 2022. There are also service charges attributable to communal areas in housing estates or for the upkeep of roads on an estate that have not been adopted by the local authority. Service charges for drainage and sewerage are not uncommon, albeit that these services are charged for by the local rates. These costs should normally be attributable to the costs of the housing development. Other charges levied by freeholders concern permission to make alterations to the property, including painting the front door, for example.

However, the major burden imposed on leaseholders results from a regular escalation of the service charges, which can be doubled every few years. Such charges can severely affect the value of the properties so as to render them virtually unsaleable at a reasonable price. Under the Landlord and Tenant Act 1985, a so-called fixed service charge, which does not reflect the actual cost of any services provided, cannot be challenged for reasonableness. It can escalate in an unbridled manner.

Occupants of flats are liable to face far worse abuses than are suffered by the leaseholders of newly built houses. The freehold can be sold over their heads without consultation or agreement. Property companies intent on deriving large incomes have purchased many such freeholds, and service charges can be levied when no services are provided. A management company that is the ostensible provider of the services is typically a subsidiary of the property company that has acquired the freeholds, even if it does not go by the same name.

A leaseholder has the right to appeal to a so-called tier one tribunal against the levy of unfair charges. A Minister declared recently in the Lords that service charges are governed by the law and must be reasonable, but this is far from the case; a leaseholder would be strongly advised against making an appeal to the tribunal. The reason for this advice is that freeholders nowadays issue contracts in which the small print declares that their leaseholders will be liable to pay any legal costs that the property companies might incur if they are called before the tribunal. One might have imagined that the costs of litigation would be assigned by the tribunal in view of the outcomes of the legal processes, but this is far from the case. Freeholders may call on expensive legal representation to make their case with the assurance that they will not pay for it.

A wealth of horror stories regarding this abuse can be found on a website called Leasehold Knowledge. This is the creation of two financial journalists who have been horrified by what they have uncovered. A litigious leaseholder can find themselves bankrupted by their attempt to seek redress against unfair charges. If a leaseholder in financial distress can no longer pay the charges for non-existent services, the freeholder can take possession of the property and no compensation for the loss is payable to the leaseholder.

These matters urgently demand legislative intervention but, so far, little has been forthcoming from the Government. Instead, the prospective legislation is the product of Private Members’ Bills. The Leasehold Reform (Ground Rent) Act 2022, admittedly a piece of government legislation, effectively abolished ground rents, which had been a vehicle for exploitation, but it leaves open many other avenues for freeholders to fleece leaseholders.

Presently, three Private Members’ Bills that address the problems of leaseholding have been introduced into the Lords. I am heartened by these initiatives, but I fear that they will fail to get a Second Reading before the end of the Session. I ask the Minister why the Government cannot adopt these Bills as their own. The Leasehold Reform (Reasonableness of Service Charges) Bill would compel the freeholder or the managing agent—liable to be a subsidiary company—to be transparent in itemising its costs. At present, the leaseholder has no means of knowing the details of the insurance on their property, which is liable to be charged at an exorbitant rate. The Leasehold Reform (Disclosure and Insurance Commissions) Bill seeks to make these matters more transparent. Finally, there is the Leasehold Reform (Tribunal Judgments and Legal Costs) Bill. This would nullify the clauses in the leaseholder contracts that burden leaseholders with the freeholder’s legal expenses. It would also prevent the freeholder using the service charges to burden the other leaseholders in a building with the costs incurred in defending a case brought before a tribunal by one of their number.

How have these abuses arisen? I fear they are the consequences of an increasingly dysfunctional society in which opportunities for gainful employment are diminishing. In such circumstances, rent-seeking and extortion flourish, and dogs eat dogs. The larger and the more powerful dogs can wreak havoc.

My Lords, I thank my noble friend Lady Warwick of Undercliffe for introducing the debate so eloquently. I welcome this debate to consider the housing issues facing the UK today, but let me first say how proud I am to hear my noble friend Lady Taylor of Stevenage make such an excellent maiden speech. She joins this House with a wealth of experience in local government and I know she has an enormous amount to contribute to the House, especially in flying the flag for Stevenage and Symonds Green.

Stevenage was established by the New Towns Act 1946 and represents the success of the post-war Labour Government who built homes for heroes from the rubble of war. In the years since, this country has changed far beyond what the builders of Stevenage could ever have imagined, but the news this week that a toddler in Rochdale has died from exposure to mould shows that the squalor in society that Beveridge identified persists today. Just yesterday, the Secretary of State told the other House that more must be done. I am convinced that “more must be done” is no longer enough. The only answer to housing conditions in the UK today is an effort that matches the Herculean effort of the post-war Government because, tragically, the death of two year-old Awaab Ishak is not an isolated case and squalid conditions are not the only problem. My noble friend Lady Warwick talked about 2 million children living in unsuitable, unaffordable and overcrowded housing in the UK.

Access to housing is increasingly difficult, especially for those who have traditionally benefited from social homes. There are now 1.4 million fewer households in social housing than there were in 1980, despite the population of our country growing by over 10 million in the same period. Building good-quality and well-regulated social housing is the relief that the Government can provide to so many millions of families struggling today. According to the Joseph Rowntree Foundation, over half of renters on low incomes would be lifted out of housing unaffordability were they to be offered homes at social rent levels.

We must also look to new and innovative forms of community and co-operative housing, learning from successful models in places such as Sunderland, Liverpool and Lancaster, where they build community wealth or collective ownership and have seen over 25,000 houses built so far. Such models give residents a greater say over design and management and can be paired with new community land trusts to provide community-owned affordable homes.

I recognise that home ownership is an ambition for millions and an achievement for many more. In the more immediate term, we need to address the present mortgage crisis, which means that a household refinancing a two-year fixed mortgage will be paying £500 more per month on average.

The result of this crisis will be that people who have worked and saved to own a place of their own will lose the roof over their head. Needless to say, on home ownership the limit of ambition should stretch far beyond addressing the immediate crisis—we must ask why home ownership rates have fallen and the number of new affordable homes available to buy has plummeted.

Following the Chancellor’s mini-Budget, more than 40% of available mortgages were withdrawn from the market, and lenders priced in interest rates for two-year fixed-rate products at over 6%, and, unfortunately, the Statement today did not address the issues for many people. This has a very real and immediate impact. Mortgage repossessions soared by 91% compared with the same period last year, while the number of orders to seize property are up by 103%.

While the situation now is worse than ever in recent memory, this is the latest culmination of a trajectory which began in 2010. There are now 800,000 fewer householders under 45 who own their home and nearly 1 million more people in private rented properties than 12 years ago. For a significant part of the population, private renting will be the right option, but there should be an alternative. The Government’s own White Paper admits that the private rented sector

“offers the most expensive, least secure, and lowest quality housing to 4.4 million households”,

and they are correct. One-fifth of private tenants in England are now spending a third of their income on housing that is non-decent.

Unfortunately, soaring rents are not the only issue that private renters have to contend with, as we have heard in other contributions today. There is also an unfair power imbalance which allows landlords to act with impunity, as seen in the continued use of no-fault evictions, mentioned by the noble Baroness, Lady Thornhill, and as demonstrated by the fact that over a fifth of private renters who moved in 2019-20 did not end their tenancy by choice.

My noble friend Lady Warwick of Undercliffe in the title of this debate calls for a “coherent strategy” to address housing problems in the UK today. As I said earlier, that strategy must take inspiration from the post-war Labour Government. I want briefly to share a quote from the Health Secretary of that historic period, Nye Bevan, who said:

“We shall be judged in a year or two by the number of houses we build. We shall be judged in ten years’ time by the type of houses we build”.

I would add that we should judge ourselves by the health and quality of life of the people who today live in homes that were built by previous generations.

Turning to some powerful contributions from speakers with great expertise, knowledge and experience, the noble Lord, Lord Lilley, mentioned a speech he made in the other House many years ago in which he said that the cure for the housing crisis is to build more homes—that is absolutely clear. Many years ago, that was seen by the press in a different manner, but I am sure that everyone now appreciates that clear, simple message.

The noble Baroness, Lady Thornhill, talked about being a pro-development mayor, and we need a pro-development ministerial approach to address this crisis. The noble Baroness also talked about change being slow; in particular, she mentioned the renters reform Bill, and I look forward to the Minister’s response on that.

My noble friend Lady Taylor, while making her excellent maiden speech, made a very pertinent point: safe, secure and warm houses are essential to one’s dignity. The noble Lord, Lord Crisp, repeated the idea that this is not just about buildings; it is about communities.

The noble Lord, Lord Best, made a very important point about affordability and looking at the underlying reasons behind the housing crisis. The noble Lord talked about the Oliver Letwin recommendations; can I press the Minister on whether they have been implemented? What assessment have the Government made of them?

I am afraid that the story of Awaab Ishak shows a tragic failure on many fronts. The death of Awaab was preventable; that it happened in modern Britain is unconscionable. Dangerous housing conditions are all too common. Today, we must mark a step change in the urgency shown towards safety and standards. The coroner said that the death of Awaab will and should be a “defining moment” for the housing sector. With the power and platform that the Minister has, what urgent steps will she be taking to ensure that this appalling tragedy never happens again? It should never have taken the death of a two year-old boy to get us to act on a widely accepted chronic problem in the housing sector.

My Lords, I begin by saying thank you to the noble Baroness, Lady Warwick of Undercliffe, for the opportunity to debate this important issue. I know it is of considerable interest to many noble Lords and I am grateful for their contributions today.

I also give a very warm welcome to the noble Baroness, Lady Taylor of Stevenage. It is lovely to have somebody else from local government to join the little local government family we have in this Chamber. It is also nice to see her face to face, as I watch her most Sundays on the BBC Look East programme from my house in Norfolk and I feel I know her from that. It is lovely to see you, and I hope we can spend a bit of time together talking about things that are of interest to both of us.

The noble Lord, Lord Khan, is absolutely right: it is horrendous and totally unacceptable that Awaab Ishak died so tragically in a house in Rochdale—a house that was under social housing providers. We spoke about that last night and I do not want to talk about it much more, other than to say that the Secretary of State gave a very clear Statement in the other place yesterday, which I repeated in this Chamber. That said that we will continue to review everything to do with this case and make the necessary changes to ensure that it does not happen again. I said that yesterday and I repeat it today. As I also said yesterday, our thoughts and prayers are with Awaab’s family at this very difficult time.

A well-functioning housing system gives people the capacity to put down roots in their community and provides them with the confidence that their home will be safe and decent. The residential construction industry is an important contributor to our economic output, enabling movement of labour and productivity growth. Good housing, as the noble Lord, Lord Crisp, made very clear, gives people good health both physically and mentally. The Government accept that.

As my noble friends rightly pointed out, people across the country and across all tenures face housing challenges. Too many people are struggling to get a foothold on the housing ladder and too many houses are substandard. This Government do not underestimate the challenge ahead. We know that there are short-term challenges: mortgage rates and private rents have increased alongside other household bills. We are monitoring the situation closely and taking action where necessary. Our interventions have so far included the Government’s energy bills support package and further measures announced by the Chancellor of the Exchequer today: an extension of the energy price guarantee beyond April, at an adjusted rate; additional cost of living payments, which will be made in 2023-24; and a 7% cap on the increase in social rents. But we heard today that longer-term challenges in the housing market also need to be addressed.

As today’s Autumn Statement shows, the Government are taking the decisions needed to ensure our strategy is fiscally responsible. We will also continue our work to address the longer-term structural issues in our housing system that are affecting people across all tenures. As we strive to build the homes people need, we must champion the needs of communities, provide the right infrastructure, preserve the green belt and protect our environment at the same time.

This Government have made significant progress in reforming the housing system. Levels of first-time buyers are now at a 20-year high. The supply of new homes reached 243,000 in 2019-20—a 30-year high. We are already seeing a steady improvement in the quality of homes and on building safety. The number of people sleeping on the streets in England is at an eight-year low. More than half a million households have been supported into secure accommodation since the landmark Homelessness Reduction Act came into force in 2018.

But, let me stress, there is a lot more to do. That is why we have committed to an ambitious housing mission as part of the Government’s overarching strategy on levelling up. The Levelling Up White Paper sets out the Government’s strategy to create a fair and just housing system that works for everyone, boosting home ownership and improving housing quality.

As I noted last week, during the debate on the Built Environment Committee’s report Meeting Housing Demand, housebuilding is a priority for this Government. I thank my noble friend Lord Lilley for his contribution, and I agree about the need to build more homes. There is compelling evidence that increasing the responsiveness of housing supply will help achieve better outcomes, including helping moderate house prices, provide for population growth and improve quality and choice.

In response to the noble Baroness, Lady Warwick, in the 2019 Conservative manifesto we committed to continue working towards delivering 300,000 new homes a year. We have announced a £10 billion investment in housing supply since the start of this Parliament. Our housing supply interventions are due ultimately to unlock more than 1 million new homes during the current Parliament and beyond.

To help diversify the housebuilding industry, as part of this investment, we have launched the £1.5 billion levelling up home building fund. This fund provides loans to SME builders, developers, self and custom-builders and innovators, to deliver 42,000 homes. It will support SME developers to grow their businesses, deliver new homes and create a more diverse housing market. We are also embracing modern methods of construction that can help deliver good-quality new homes more quickly and more sustainably, with the potential to improve productivity in the industry.

The noble Baroness, Lady Warwick, also raised the important issue of social housing supply. We are continuing to invest in the delivery of affordable homes, including social rented and supported housing. Our £11.5 billion affordable homes programme will build tens of thousands of homes, helping first-time buyers to get on to the ladder, providing more stable, affordable rented options, including social rental, and delivering new supported housing for older, disabled and other vulnerable people. The Government remain committed to our 10-year vision for the reform of adult social care. We are taking forward proposals in the People at the Heart of Care White Paper.

Following today’s fiscal Statement, departments are reviewing specific spending plans. Details will be announced in due course.

The noble Baronesses, Lady Thornhill and Lady Taylor, both raised the matter of right to buy receipts. Since the reform of the housing revenue account and the introduction of self-financing in April 2012, a proportion of receipts is paid to the Treasury. These considerations remain important. There are no current plans to release anything further to councils from the settlement agreed in 2012. However, in the consultation issued alongside the social housing Green Paper we consulted councils as to what other flexibilities we could provide to enable them to build more quickly. In March 2021, we announced a package of flexibilities, including allowing five years to spend receipts and for replacements to be delivered as shared ownership or first homes.

The noble Baroness, Lady Taylor, referred specifically to the requirement that the right-to-buy receipts should not fund more than 40% of the cost of replacement properties. The intention of this cap is to maximise the number of new homes that can be delivered using right-to-buy receipts, with councils adding their own resources to this source of funding. In the package of flexibilities announced in March 2021, the Government increased the proportion of a replacement property that can be funded using right-to-buy receipts from 30% to 40%. It also increased the time limit for spending receipts from three to five years. This set of reforms, combined with the abolition of the housing borrowing caps in 2018, gives councils substantially increased flexibilities to build these replacement homes.

Our ongoing reforms to the planning system as set out in the Levelling Up White Paper will not only enable more beautiful, sustainable houses to be built but will ensure that local communities are at the heart of planning. Our homes must be built in the right places. To this end, we need to make the most use of suitable brownfield land to meet housing needs and regenerate our high streets and town centres. This is why the government policy provides strong encouragement for the take-up of brownfield sites and expects local authorities to prioritise suitable brownfield land for development. The £1.8 billion brownfield, infrastructure and land fund will unlock up to 160,000 new homes on derelict and underused land. The funding will boost local areas by transforming disused sites and investing in vital infrastructure to help create vibrant communities for people to live and work in. This will be achieved while protecting our cherished green spaces.

The noble Lord, Lord Best, raised the important work of Sir Oliver Letwin through his review of build-out. The Government acknowledge the conclusions of the Letwin review and agree that local authorities need more powers to support build-out. The Levelling-up and Regeneration Bill, which was introduced to Parliament on 11 May, will boost local authorities’ powers to manage development, ensuring that it works for communities as well as developers. The Bill will improve the system of locally-led development corporations to support local area plans for regeneration and growth and will include a range of important measures to accelerate the build-out of sites. It will replace the existing system for securing developer contributions with a new flat-rate infrastructure levy that will aim to capture land value uplift at a higher level than the current developer contribution regime, allowing local authorities to use the proceeds for providing the affordable housing and infrastructure that communities need. I can reassure the noble Baroness, Lady Warwick, that the levy will deliver at least as much, if not more, affordable housing than the current system of developer contributions. This will be secured through regulation and policy supported by the provisions in the Bill.

We are considering possible revisions to the NPPF to reflect wider changes to the planning system and will publish further details on this in due course. We are also testing innovative approaches to improving land value capture further through a government amendment which will allow a pilot of community land auctions. Participating piloting authorities will be able to invite landowners to submit a price at which they are willing to sell their land. Once that occurs, the authority will be able to consider the financial benefits of allocating land submitted in their local plan, and then auction the development rights where the land has been allocated. The LPA will be able to keep auction receipts to invest in infrastructure and affordable housing in its areas. I think we will discuss this a lot more when the LUR Bill comes to this House very shortly.

Our housing mission in the Levelling Up White Paper sets out that, by 2030, renters will have a secure path to ownership, with the number of first-time buyers increasing in all areas. Since spring 2010, over 800,000 households have been helped to purchase a home through government-backed schemes such as shared ownership and right to buy. In 2021, the annual first-time buyer numbers had reached a 20-year high at over 400,000. Our ongoing commitment to build new homes, including affordable homes, will support more households on to that ladder. Of course this is a difficult time for first-time buyers, which is why we are cutting stamp duty and delivering schemes such as first homes, which provides housing at a discount of at least 30%. We will continue to monitor the state of the mortgage market closely.

For those who bought homes only to find their experience of home ownership restricted by unfair leasehold practices, we are taking forward a programme of reform to improve the leasehold market. In 2022, we enacted the first part of legislative reforms: the Leasehold Reform (Ground Rent) Act. We intend to follow this up with further leasehold reforms later in this Parliament to make it easier and cheaper for leaseholders to buy their freehold, extend their leases, or take over management of their buildings. I will host an all-Peers round-table meeting to discuss leasehold reform on 6 December.

Across the private rented and social rented sectors, our levelling-up mission is to reduce the number of non-decent rented homes by 50% by 2030, with the biggest improvements in the lowest-performing areas. The private rented sector White Paper sets out a 12-point plan to provide a better deal for private renters, including abolishing Section 21 no-fault evictions and, in return, improving possession grounds for landlords. Legislating in this space remains a top priority for this Government, and, to return to the question of timing raised by the noble Baroness, Lady Hayman of Ullock, yesterday, I say that we will bring forward legislation in this Parliament. We have also recently consulted on introducing a decent home standard in the PRS and are considering responses before setting out next steps.

In response to the point of the noble Baroness, Lady Thornhill, on freezing rent, I say that the Government do not support the introduction of rent controls in the private rented sector to set the level of rent at the outset of a tenancy. Historical evidence suggests that this would discourage investment in the sector and lead to declining property standards as a result, which would not help landlords or tenants. Recent international examples also suggest that rent controls can have an inadvertently negative impact on the supply of housing and may encourage more illegal subletting.

The social rented sector is equally at the heart of our housing mission in this country. As the Chancellor announced in the other place as part of his Autumn Statement, we have set a 7% ceiling on social housing rent increases next year, saving the average tenant £200. Having carefully reviewed the responses from our consultation on rent caps, our decision strikes an appropriate balance between protecting social tenants from high rent increases and ensuring that social landlords are able to continue to invest in new and existing social housing and to provide decent homes and the services that tenants require.

The housing White Paper sets out a wide range of measures which together will ensure that residents live in safe and decent homes, are treated with fairness and respect, and have their problems quickly resolved. The Social Housing (Regulation) Bill is part of our programme to deliver on those White Paper commitments. As your Lordships know, it is a short but radical Bill: that is what the sector needs and tenants deserve. I am immensely proud to have recently taken it through this House as a crucial element of the Government’s response to the terrible Grenfell tragedy. The Regulator of Social Housing—the body responsible for regulating social housing in England—will be taking a new, proactive approach to regulating social housing landlords on the issues which matter most to tenants. The Bill will drive significant change in how social landlords behave, forcing them to focus on the needs of their tenants. Where they do not do this, they will be robustly held to account.

The noble Baroness, Lady Warwick, also raised the issue of energy efficiency in social housing. We have committed to consulting on setting minimum energy-efficiency standards for the social rented sector within six months of the Social Housing (Regulation) Bill receiving Royal Assent. It is right that we give landlords the opportunity to feed in on the approach, including how they manage this within the context of competing pressures. We have also secured more than £1 billion to the social housing decarbonisation fund to support landlords so far, with a total of £3.8 billion committed within this Parliament.

After the tragedy of the Grenfell Tower fire, we are determined to learn the lessons of the past. We will ensure that residents of high-rise buildings are safe, accepting and implementing the findings of the Hackitt report. The Building Safety Act received Royal Assent on 28 April 2022, with ground-breaking reforms giving residents and home owners more powers and protections so that homes across the country are safer. It delivers far-reaching protections for qualifying leaseholders from the costs associated with remediating historical building safety defects and enables them to hold those responsible for building safety defects to account. The Act establishes three new bodies to provide effective oversight of the new regime: the building safety regulator, housed within the Health and Safety Executive, a national regulator of construction products, located in the Office for Product Safety and Standards, and the new homes ombudsman. Many of the detailed provisions within the Act will be implemented through a significant programme of secondary legislation.

Across all our work, we are focused on transitioning to net zero, in line with the Government’s 2050 targets. In 2025, we will introduce the future homes standard, which will ensure that all new homes produce 75% fewer carbon emissions than under current regulations, and that they are net-zero ready. We are also consulting on options to mandate assessment of, and limits to, whole-life carbon impacts of new construction in 2023.

For existing homes, the Government are investing £12 billion in help-to-heat schemes to ensure that homes are warmer, cheaper to heat and more efficient. In England alone, the average home below the Government’s target energy performance certificate C rating will spend over £550 more than one at the threshold; in total, that is £8 billion wasted per year. Therefore, the Chancellor, in his Autumn Statement today, announced a new national ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels.

I will go through this as quickly as possible, if noble Lords are happy for me to; they may want me to stop. I will just talk about homelessness and rough sleeping, because it is important. We are taking action to ensure that everyone has access to a good home. In the levelling-up White Paper, we set out our commitment to tackle homelessness and end rough sleeping for good. This is why we are investing £2 billion over the next three years into homelessness and rough sleeping.

Again, I thank the noble Baroness, Lady Warwick, for securing today’s debate. Utilising the strategy set out in the levelling-up White Paper, and our extensive policy programme, this Government are committed to addressing the challenges faced by households across tenures of housing in England. I look forward to working with noble Lords to deliver a housing system that works for everyone.

My Lords, I thank the Minister for her very thorough response, much of which we need to take away and concentrate on. I appreciate the detailed way in which she sought to respond to the questions raised and the comments made.

I will not go over the different contributions that have been made. It has been a quite illuminating debate. It is intriguing that each of us has come forward with rather different perspectives on the market. However, there was a considerable degree of consensus about the major problem that faces this country, which is that we are just not building enough homes. I remind the Minister, in her optimism about building new social homes, of the 4.2 million people who need them.

I also thank my noble friend Lady Taylor for her wonderful and passionate maiden speech, which added considerable lustre to the debate and gave us a wonderful picture of somebody growing up not just in a city but with a city, and of all the lessons that were learned and the amazing contribution that she has made to her local government area over so many years. I thank all noble Lords for their contributions.

Motion agreed.