Housing

Baroness Dean of Thornton-le-Fylde Excerpts

Thursday 3rd November 2016 Lords Chamber

[Baroness Dean of Thornton-le-Fylde (Lab)]

My Lords, I thank my noble friend Lord Griffiths of Burry Port for obtaining this debate. I declare that I am a board member of Places for People, a registered housing association.

Although this debate deals with young people, whom I shall speak about, we have a problem with housing right across the board in both tenure and supply. In 2008, 68% of the population were owner-occupiers. In just four years, it dropped to 65%. It is quite shocking that today an average young working family will take 12 years to save for a deposit to buy a house. It takes six and half years, on average, for couples who do not have children, so it is clear that people have choice of whether to have a family and wait longer to get a deposit, or to forget a family and get a deposit earlier. That has led to more young people being dependent on their family for longer and living with them. In 2014, Shelter reported that just 23% of people aged 20 to 34 wanted to live with their family and 77% wanted to be independent and live by themselves. Irrespective of that, all young people today face higher housing costs than any generation before them. There is not much optimism in the future for them. That means that we have delayed family formation, which has strong implications for us as a society.

In addition to availability—and housing is in short supply—cost can be a real hurdle. Places for People looked at what it could do to help, apart from providing some cheaper accommodation. It has a personal loan service because young people are particularly vulnerable to being short of money, taking out a loan and finding themselves in a spiral of owing money and being in debt. Places for People has a scheme to make small loans of between £250 and £3,000 at a cheaper rate than normal, and 8,500 people have taken advantage of it. Pennywise in Bristol has a pilot scheme with one-to-one mentoring to help people develop and manage their financial affairs. It has engaged 1,700 people on the one-to-one scheme and another 1,000 people have received group mentoring. Quite often, people go into a tenancy and have a problem paying. It is interesting that 55% of those who were in at-risk tenancies are now in secure tenancies. It has helped to turn them around. There were also improvements in mental health for 35% of them—health has been mentioned in this debate—and 20% moved into work. There are small things that can be done to help, but we are still left with the big problems of shortage of supply and, sometimes, of cost.

What can be done? We need to look at what part of the problem is first. There is no overall planning, in the sense that the local authorities have become reactive. They are short-term and have low levels of resource—we all know that. Even where there is a vision and capacity to plan, there are too few organisations now able to partner with them. For instance, between 2007 and 2014, the number of housebuilders delivering 30 or fewer homes—small housing developments, which of course are particularly found in rural areas—reduced from just over 5,000 to 2,200. There are fewer builders available to provide the housing, which creates big delays. In 1995, firms building fewer than 100 homes delivered a quarter of our new housing stock; today, it is one in eight. So we have a capacity problem, quite apart from the issues that this debates raises. In addition, of course, housing associations have faced the rent reductions that were introduced last year, which mean that social housing rental income has reduced by approximately 12%. The figures came out just in June this year: housing association starts were down by 6%. It is a big problem that needs tackling.

One means through which the Government could increase housing supply is tax incentives such as those that apply in France and the United States. We carried out some research with De Montfort University and Cambridge University. The outcome, which I am quite happy to share with the Minister if he wishes, convinced us that there was merit in that. We certainly need triggers to encourage housing associations, which face rent reductions and have balance sheets they need to secure. They need more incentives to build than they are getting. The 6% drop by June this year is very worrying—I would certainly be worried if I was in the Minister’s shoes. We need to look at different incentives. Planning is one aspect, trying to build capacity is another and tax incentives might be yet another. I leave that thought with the Minister.