[Albert Owen in the Chair]
I beg to move,
That this House has considered extension of the right to buy to tenants of housing associations in Bedford.
My constituency of Bedford includes two towns, Bedford and Kempston, and the motion applies to tenants of housing associations in both those constituent towns. It is a pleasure to serve under your chairmanship, Mr Owen, and to welcome the Minister to his place. I look forward to his response my questions.
If I were to sum up my home town in an overarching theme or description, it would be that Bedford is a town for families. It is the sort of town where mums and dads want to come and bring up their children. It is a place where we want excellent schools, training and education and for good, local jobs to be available. One of the things at the core of that is the availability of housing and the opportunity for people to have the right to buy their own home.
I have been Bedford’s Member of Parliament for nearly seven years, and I would like to share with the Minister some of the statistics on household by type in Bedford. The census captures that information and uses the main headings of “owner-occupied”, “socially rented” and “privately rented” to describe households. In 1991, in England and Wales as a whole, 23% of households were socially rented. By 2011, that had gone down to 17.6%, which was a decline of about 6%. However, in Bedford, the numbers are slightly different. In 1991, the proportion was 20.2%; by 2011 it was 19.4%. So there was a decline, but a much smaller one, in socially rented accommodation. Across England and Wales the total number of households in socially rented accommodation has gone down; in Bedford it has gone up. The main concern in the change in household statistics for my constituency is the decline in owner-occupied households, which have gone down from nearly 70% of homes to 60%. There is therefore a pent-up demand for people to have the opportunity to own their own home.
To give the Minister an indication of that demand, under the last Government, led by Mr Cameron, the Help to Buy equity loan scheme was introduced and the Bedford Borough Council area had one of the highest take-up rates of households who wanted to take advantage of those loans—we were one of the keenest areas. The Prime Minister came to Bedford to look at one of the developments that was enthusiastically offering those loans to the people of Bedford.
The reason why socially rented housing in Bedford has not seen the same change as other regions is that, at the time of those statistics, the council housing stock was moved across from the local authority and into housing associations, so families in Bedford who are renting social housing have never had the opportunity that has been available in other areas of the country. It is time for a change.
I very much welcomed the 2015 Conservative manifesto that I stood on, and proudly supported it when it said:
“We will extend the Right to Buy to tenants in Housing Associations to enable people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes.”
That is a clear, declarative statement, and one that I strongly support. Will the Minister confirm that that manifesto commitment, which he and I both stood on, will be met during this Parliament? Will he let me know whether that right to buy will be extended specifically to tenants of housing associations living in Bedford and Kempston?
As you will know, Mr Owen, and as the Minister certainly knows, the right-to-buy scheme is voluntary. I want to let the Minister know that the largest housing association in Bedford, Bedford Pilgrim Housing Association, is a strong supporter of the voluntary right to buy, because it sees the benefit in encouraging home ownership as well as the financial benefit and, most importantly, the benefit to its ability to build more good-quality, low-cost housing that people can rent or, ultimately, when they can, have the right to buy. Can the Minister guarantee today that the manifesto commitment will be extended to tenants of housing associations living in Bedford and Kempston? Can he give me some idea of when it will be possible for such tenants to be able to purchase their own homes?
It will perhaps be helpful if I put my requests in the context of the Government’s progress, because that shapes how the manifesto commitment is being met. The Housing and Planning Act 2016 included provisions to extend the right to buy on a voluntary basis, in agreement with the National Housing Federation, which represents a large proportion of our social housing landlords.
I hope this is not an obtuse question, but I am interested to hear from the Minister what constitutes volunteering. There is the “Dad’s Army” version, where Pike seemed to be the one who was volunteered. Will housing associations be volunteered, or will it be entirely up to them? Will it be agreed between the housing associations and the federation, or between the housing association and the Government? If the Government are part of the process for approving a voluntary participant in the scheme, will the Minister give some indication of the basis on which local housing associations will be considered? Will the Government make the final and binding decision to accept or deny an extension of right to buy for any specific housing association? Can the Minister advise me about what those rules may be? What regulations will affect the length of time taken for the Government to agree to a housing association’s request to participate in the right to buy? It would be helpful to have some clarity from the Minister, not only for BPHA and the other housing associations operating in my constituency, but more generally so that we know the Government’s thinking about how it will be possible for housing associations to volunteer.
It is fair to say that the initial pilot, which began in January 2016 with five housing associations and was reviewed in January by Sheffield Hallam University’s Centre for Regional Economic and Social Research, was very positive. I will start with the last point I was going to make, because it is the most important. I found it interesting—particularly for a form from the Government—that 93% of the people thought the form was simple and easy to use. I do not know of the phrase “simple and easy to use” achieving a 93% threshold when applied to an application form for anything ever, so clearly people should not be afraid of the process. They are not going to get embroiled in something complicated or difficult. The pilot scheme has shown that if someone is interested, applying for the process is simple and straightforward. It is important that that message goes out.
Less encouraging was that, of the 53,955 properties in the participating pilot housing associations, only 16,000—just 30%—were eligible for the voluntary right to buy. There were a variety of reasons why certain parts of the housing stock were not included, but for a large proportion it was because of covenants relating to section 106. The manifesto commitment—that strong statement upon which the Minister and I both stood—is not consistent with only 30% of housing being eligible for the voluntary right to buy. The figure needs to be much higher if our manifesto commitment is to have any meaning. There is no point in having a simple process if seven out of 10 of the people applying are told, “You can’t move forward.” I shall be grateful if the Minister can advise me either today or, perhaps more reasonably, in writing what the eligibility proportion will be for residents in my constituency, based on his experience of the test. I am sure that if he needs to contact the housing associations in Bedford and Kempston, they would be willing to co-operate with him so that he has a clearer understanding. What conclusions does he draw from the finding that only 30% are eligible, and what measures is he considering to ensure that the proportion increases significantly?
On section 106 agreements, many of which require local authority agreement, has the Minister spoken to Bedford Borough Council to gauge its interest? He probably has not, because it is not involved, but I thought I would just check. Will he commit to doing so?
Having spoken to BPHA, I understand that housing associations have been told that they can establish a “policy” to govern which homes can and cannot be sold through the voluntary right to buy, but the guidelines for such policies are not known at this point. Will the Minister advise me when those guidelines will be published?
Once eligibility for the scheme was determined, expressions of interests were about 26%—one in four—which indicates the level of demand. I assure the Minister that Bedford can meet that demand, but in some instances the option of some aspect of transferability may be permitted or required. I would be interested in any comments he can make about whether that will be permitted and how it will work. In particular, will he comment on whether housing associations will be able to work together to offer transferability for voluntary right to buy rights?
The statistics show that more women than men applied for right to buy: 60% of lead applicants were women. The age range was 45 to 54. The proportion of non-white British people applying was 27%, compared with a non-white British share of the national population that is half that—13%. That may be to do with the areas that were in the pilot, but in my constituency a large proportion of people who moved into housing association accommodation post-1991 are from different parts of Europe and the world—as the Minister knows, Bedford is a very diverse town. I anticipate that in Bedford there will be a very significant benefit for families from other countries of origin.
The new regional pilot is due, as per the 2016 autumn statement. I understand that it will test some aspects of the voluntary right-to-buy scheme that were not tested in the original pilot—in particular, one-for-one replacement and the issue of portability. I would be grateful if the Minister could advise me when he anticipates the regional pilot will commence, and which area or areas of the country might be included.
I am sure the Minister anticipated this question. Given the positive case for Bedford and the positive attitude of our main housing association, can he confirm that he will consider including Bedford in the regional pilot, or potentially alongside other aspects of the roll-out from the initial five areas?
It is important to communicate the fact that the voluntary right-to-buy scheme is about replacing affordable homes for rent. It is not about taking homes out of the social rented sector but about creating new homes in the social rented sector. That is an extremely important part of what we will be looking for from the Government in the next stage of the roll-out. I will be grateful if the Minister can comment on that.
Today, the Chancellor announced his Budget. I say to the Minister and the Treasury that this is a vital initiative. It was a clear manifesto commitment, and I very much hope that the Treasury will look positively on it in the next couple of years as a means not only of extending home ownership but of contributing significantly to the availability of houses for people to rent.
It is a pleasure to serve under your chairmanship for the first time, Mr Owen. I congratulate my hon. Friend the Member for Bedford (Richard Fuller) on securing this debate and on the passion he has shown for this Government commitment, which is one of a number of policies that will ensure that ordinary working people who are doing their best and working hard have the opportunity to own their own home.
My hon. Friend started his speech by quoting statistics showing the change in housing tenure patterns across England and Wales, and he reflected on the slight difference in the trend in his constituency. This issue is raised with me regularly as housing Minister. Looking over a longer period, home ownership in this country increased from about the end of the first world war, and then dipped from 2003-04. That is when home ownership in England reached its peak, and it has declined since then. The last year for which we have data is the first year in which that decline halted. I cannot yet say to my hon. Friend that we have reversed the decline, but unlike the previous Government we are concerned about it. We want to ensure that people who work hard and aspire to own their own home have the chance to do so, and we have introduced a number of schemes to address that. They have been successful in arresting the decline, but we still have to reverse it and help more people to fulfil their dream of owning their own property.
Before I answer my hon. Friend’s questions, I want to say a few words about those schemes, because the White Paper that we published recently is germane to this discussion. Government policy since 2010 has focused on the demand side. In other words, we have looked at policies that can help specific groups of people who are struggling to get on to the ladder to make that leap, get on to the bottom rung and hopefully climb up.
My hon. Friend referred to the Help to Buy scheme, which has been extremely successful. It has a number of different components. Initially, there was a mortgage guarantee scheme. People could not secure low-deposit mortgages, so the Government filled a gap in the market. The market has now responded, so that scheme closed at the end of 2016. We are continuing the equity loan scheme, from which many people are benefiting. We also have the help to buy ISA, which helps first-time buyers save for a deposit on their home, and the shared ownership scheme, which is increasingly popular. An increasing number of housing associations are bidding for Government funding to build homes on a shared ownership basis. Shared ownership is particularly useful for those who are struggling to save for a deposit, because it allows them to get a partial share in a home with a very small deposit.
We are also in the process of introducing starter homes—another commitment in the manifesto on which my hon. Friend and I fought the last election. They will be available solely to first-time buyers under the age of 40, and will be sold at a 20% discount to the market price. They will help many more people get into ownership. We are also developing new rent-to-buy products, which allow people go into a sub-market rented home and give them a period in which they can save for a deposit to buy the home.
My hon. Friend is right to say, however, that the reinvigoration of the right to buy for council tenants and the introduction of the voluntary right to buy for housing association tenants are a key part of our strategy. They are a way to ensure that people in social housing have an opportunity to buy the home they are living in. I share his passion for seeing the schemes rolled out.
The White Paper also makes a wider argument that it is important to put on the record. In the long term, if we want to ensure that more and more people in this country who are doing the right thing and working hard have a chance to own their own home, the answer is on the supply side. It is about building enough homes so that housing does not become increasingly unaffordable. That is something that, with respect, Governments of both colours have failed to do over the past 30 or 40 years. The median house price in this country is now eight times median earnings. It is therefore no wonder that, without such schemes, people find it difficult to access the market.
We are trying to solve the problem from two directions: first, to get more house building in this country, so that over time we make housing more affordable; and, secondly, to continue with specific programmes to help groups of people who cannot get on the ladder in the current market to do so. The voluntary right to buy is a key element of that, because it will give housing association tenants the opportunity to purchase a home with a discount equivalent to that which exists for council tenants under the statutory right to buy. I take the opportunity to thank the National Housing Federation, which was crucial in reaching the voluntary agreement. I was pleased to learn that BPHA, the dominant provider in my hon. Friend’s constituency, is such a strong supporter. My hon. Friend was right to quote from our manifesto. The fundamental rationale for why the Government have secured the agreement is that it is unfair for tenants of housing associations to miss out on an opportunity that tenants of local authorities enjoy.
It is worth taking time to explain why the agreement is voluntary. The Government’s belief is that housing associations are private sector organisations. It would therefore not have been right to legislate to force them to have a right to buy. We wished to proceed through a voluntary agreement between the Government and the housing association sector. As I said, I am grateful to the NHF for its support.
One of my hon. Friend’s questions was, when we say “voluntary”, how do people volunteer? The threshold we set the NHF was that we wanted the overwhelming majority of housing association homes to be governed by any agreement. Nationally, 93% of housing association homes are managed by associations that have signed up to the voluntary agreement. I hope that reassures him about the comprehensiveness of the cover as far as housing associations are concerned. I will come on to his point on individual properties and whether they are eligible.
My hon. Friend made another point in his speech that I want to stress powerfully. The right to buy remains controversial party politically in this House and around the country, and he put his finger on the key element of our policy: it is not only about helping people who live in housing association accommodation to have the opportunity to buy the home they live in; it is also a pro-supply policy, because it guarantees that the housing association will provide an additional home with some of the income from the sale of a property. I have said consistently about the right to buy, whether the local authority one or the voluntary housing association one, that in order to make it politically saleable as a policy it is vital that we not only help families to own their own home, but provide replacement accommodation for those in need of rented accommodation. That is a key part of the policy.
My hon. Friend referred to the initial five pilots. I thank London and Quadrant, which piloted the scheme in London, Riverside in the north-east, Saffron in South Norfolk, Sovereign in Oxfordshire, and Thames Valley—we can guess from the name where it covers. Their work has been important in developing the policy and in seeing how it works.
My hon. Friend also referred to the research done by Sheffield Hallam University, which was incredibly useful. Given the shortage of time, I will not run over his points again, but I want to highlight one important finding of that research: the voluntary right to buy is providing the opportunity for home ownership to many tenants who would not otherwise have been able to own their own home. The scheme is helping people who would have had no other means of getting on to the ownership ladder. He made a very powerful point about the large number of women buying homes, and how if the policy were employed in constituencies like his and mine, it would help many people from black and minority ethnic communities to get on the ownership ladder. That is something of which we should be very proud.
As my hon. Friend said, in the autumn statement 2016 my right hon. Friend the Chancellor of the Exchequer announced that the next stage in implementing our manifesto commitment will be a large regional pilot, which we anticipate will allow about 3,000 families to buy their own home. It is important to carry out such pilots to ensure that we get the policy right, because it is much more complicated than the statutory right to buy. It is a voluntary arrangement with many complications, some of which my hon. Friend the Member for Bedford mentioned, so piloting is extremely important. The regional pilot will therefore not only be bigger in scale but allow us to test some of the key features of the policy. He identified the two key ones: portability and one-for-one replacement. The smaller pilots did not cover those two crucial aspects of the policy.
Portability is really the answer to the other key question that my hon. Friend put to me, which was about how many properties would be eligible. It is difficult to answer that question now, but I will say two things. First, housing associations will choose not to sell some properties. An example might be properties in highly rural parts of the country, where the association judges that the chance of finding a site in the area to build a replacement would be very slim. Instead, an association might offer the family a chance to buy a home somewhere locally on the open market, rather than the one in which they live. Another example, with which I am sure he sympathises, would be that of a home with significant sums of money spent on it in adaptations for a disabled person. An association might want to keep that property in its stock and, again, would allow the family living there to buy somewhere else. Portability is important.
Secondly, my hon. Friend also touched on what the initial pilots have suggested about problems with properties not being able to be sold because of certain restrictions placed on them—he talked about section 106 agreements. I hope to make some progress on that through local authorities respecting the agreement that the Government have reached with the housing associations and allowing people who are ultimately their residents and have the dream of owning their own home to do so, in particular because the councils can be confident that replacement homes will be provided for rent. That is something that I will keep a very close eye on and he was right to make that point.
My hon. Friend’s final question was about timing—of the announcement about the regional pilots and of the national roll-out. The Government are working with the National Housing Federation to identify the most effective location or locations for the regional pilots. I hope to announce a decision on that shortly. I cannot prejudge the decision, but he made a powerful case, not only through his passion for the policy and his desire to see it rolled out for his constituents, but in terms of the particular make-up of the community he has the privilege of representing and the enthusiasm of his local housing association to be a part of the scheme. He has spoken to the Secretary of State, but I will report his enthusiasm. We will let him know as soon as we have a decision. I was lucky that, under the L&Q pilot, the first home in the country to be sold was in Croydon, so I have seen the benefit of the pilots in my constituency and I can understand his enthusiasm.
I cannot, however, give my hon. Friend the timing of the national roll-out. I understand the frustration out there, and I am contacted regularly by housing association tenants who are desperate to see the Government get on with implementing our commitment, which we intend to honour. We first need to learn from the regional pilot, but there is a real determination to get on with this, because—like my hon. Friend—the Government believe strongly that people who work hard and do the right thing should have the opportunity to own their own home.
I will happily do that. I should thank the Chancellor for the funding he has given us for the regional pilots. My hon. Friend is quite right: with the Office for National Statistics classifying housing associations in the public sector, there is an additional cost beyond the money we will raise through higher value asset receipts. I thank him for his question, and I will certainly pass that on.
Question put and agreed to.