Housing and Planning Bill

Debate between Baroness Williams of Trafford and Lord Best

Monday 14th March 2016 Lords Chamber

[Baroness Williams of Trafford]

My Lords, all I can confirm at this stage is that, as the noble Lord, Lord Best, said, there are two options on the table.

[Lord Best]

I hope I am right in thinking that the Government are minded to choose the lower of these two options. It would be cruel to suggest the lower figure and then choose the taper that costs tenants twice as much. For a household with two earners together earning £40,000 per annum outside London, with a 20p taper they would face an extra £40 per week on the rent—a serious loss of income. If the taper was at 10p in the pound, their extra rent would be £20 per week, which seems quite enough of an extra burden for two people both earning well under the national average.

I recognise that such increases will be offset to some extent by the Government’s cut in council rents over the next four years. Of course, for the relatively small number of households—well under 1% of council tenants—where household income is more than £50,000, the increases would require substantial cuts to the household budget. That does sound a painful change. Nevertheless, the headline here, following the letter to Peers from the Minister, is that pay to stay will not be quite as dreadful as it appeared earlier.

The amendments address the underlying problem. They would remove the compulsion on local authorities with council housing to introduce any higher-rents regime dictated by central government. Local authorities may well have their own ideas on schemes that would suit local circumstances, local rent levels and local incomes. Whitehall does not always know best. On top of losing their autonomy over relatively micro decisions on rent setting, local authorities will also lose all the extra rent which the pay to stay arrangements generate.

Since all financial benefits from the new arrangements accrue to the Exchequer, not to the local authority, once again it seems that every avenue is being blocked for councils that want to engage in providing more and better housing. Housing associations, including those where councils have transferred all their housing to a housing association, will be able to decide for themselves whether to adopt a scheme of this kind. I think that many will choose not to do so. If they do increase rents for better-off tenants, the housing associations will keep the extra money, not least to make up for some of the loss of rent they will suffer over the next four years due to the Government’s recent requirement on them to cut rents by 12% in real terms—but not councils.

In earlier sittings of this Committee we heard from noble Lords who are understandably aggrieved about other costs falling on councils but not—in just the same circumstances—on housing associations. Driving a wedge between the two providers of affordable housing is a very unfortunate by-product of the Bill. As a strong supporter of councils doing more not less to ease the nation’s housing problems, and as a very long-standing advocate for the contribution of housing associations, I find it very troubling to see the two set against each other in this way.

Surely councils, like housing associations, should be able both to decide on any rental schemes for higher-income tenants and to retain any extra rental income from tenants with higher earnings just as housing associations can. Many of your Lordships have already argued that councils should be able to retain receipts from sales of vacant properties, as housing associations can, and as councils can today but will be prevented by the Bill from doing tomorrow.

The nation needs all hands on deck—all sectors to join the fight to get more homes built. All of us in the housing world need to pull together and not allow ourselves to be pulled apart. These amendments would let councils continue to decide for themselves on any new rental arrangements and, as with housing associations, keep any rent receipts to help meet housing need. I beg to move.

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[Baroness Williams of Trafford]

I am sorry, I thought that the noble Lord was going on to make a speech. The fact is that generally social rents are cheaper than market rents, although they have been going up at a higher rate than rents in the private sector. I do not think we can compare this proposal with council tax because different areas have different needs in terms of the services they provide.

[Lord Best]

My Lords, I am grateful to all noble Lords who have joined in this debate. As has been the pattern in other parts of the Bill, we have started with a lengthy session which has looked at the full policy implications in this area. There are a lot of amendments yet to come on pay to stay, but I think we have already aired some of the broader policy issues.

The noble Lord, Lord Shipley, commented on the administrative costs of handling this scheme, to which many other noble Lords drew attention. We will come to Amendment 75A and have another go at that issue, which is clearly very important if the scheme will cost an awful lot of the money raised just to administer. That is money just going round in circles and achieving nothing at all.

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[Baroness Williams of Trafford]

I answered that in responding to a question from the noble Lord, Lord Shipley, about not putting the thresholds in the Bill because they might change.

[Lord Best]

My Lords, I apologise for my delay in rising to speak. I did indeed lead on this amendment, although I spoke to it very briefly compared with the debate that has followed. The rather modest recommendation in my amendment that these rent increases should be limited on the basis of 5% or inflation plus 2% is one of very many ways in which one could make a significant difference to people’s lives with the disruption that is still coming down the road, even with the tapers that we have heard about.

It may be that others have not read into the mysterious letter, which has gone to a number of noble Lords, what I have: that we have a choice of two levels of taper—10p in the pound or 20p in the pound. I hope very much that the Government will go for the 10p. Those are the options the Government are now seriously considering, and we have to accept that. It is a very much better deal than people had feared. Now, you would have to have an income approaching £100,000 in order to pay the market rent in Camden for some of the highest-value properties. The gap is so wide that at 10p in the pound or 20p in the pound, it will take a long time to fill it.

I shall not detain the Committee any longer. I apologise for being slow to get to my feet, and I beg leave to withdraw the amendment.

Housing and Planning Bill

Debate between Baroness Williams of Trafford and Lord Best

Thursday 10th March 2016 Lords Chamber

[Baroness Williams of Trafford]

On the spare room subsidy, if someone is in a property that has more bedrooms than they need to occupy, my understanding of the mechanism is that a suitable property would then be found for them. The noble Lord is asking whether the property that has been vacated would then fall into the definition of a high-value asset. The honest answer is that I do not know but the probable answer is not necessarily at all—probably not—because we are talking about high-value assets across a number of bedrooms. So I do not think it would but I will take that away, think about it and get back to the noble Lord.

[Lord Best (CB)]

My Lords, this comes up under Amendment 68A, which we are coming to. If you have moved out, it is a transfer. We will be debating that a little later.

[Baroness Williams of Trafford]

I thank the noble Lord for that.

Where we have an agreement, we want local authorities to have discretion over how the new housing can meet the needs of their local communities, rather than being constrained in primary legislation to replacing the housing they sell with homes of the same tenure. We come back to the term “flexibility”. We think it is also important that local authorities are innovative and flexible in their approach to delivering more housing, so there are opportunities for them to contribute their land, make use of their HRA headroom or cross-subsidise from the development of market homes, which I mentioned to the noble Baroness.

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[Baroness Williams of Trafford]

My Lords, that is not the intention at all, but I am very happy to take that away and have a think about it. I would not want to spell the end of tenant management organisations, because they fulfil a vital role.

It is important to say at this stage that under the formula approach, if a local housing authority has discretion not to sell properties and does not want to sell a particular property—for example, one managed by a TMO—it should choose not to do so, provided that it makes the payment to the Secretary of State. I accept that that does not answer the noble Lord’s point. Perhaps he could just let me think about this—although it may be too late, as I cannot think very well at the moment.

Amendments 67, 67B, 68 and 69 seek to exclude various types of housing when calculating the payments required from local authorities, including newly constructed or renovated homes, homes in regeneration areas, recently improved housing and specialised housing. Amendment 68A, in the name of the noble Lord, Lord Best, would exclude dwellings that become vacant as the result of a transfer to alternative social accommodation from being taken into account. I assure noble Lords that we will look carefully at all these suggestions and consider the points that have been made today, while balancing the need for funding from the sale of high-value vacant homes to support the delivery of right to buy to housing associations.

The noble Lord, Lord Best, is concerned about two social tenants being unable to exchange properties. I can reassure him that the two tenancies do not come to an end, so a vacancy is not created. I therefore confirm that, in these circumstances, mutual exchanges will not fall into the scope of the policy. The legislation allows the Secretary of State to specify other cases where housing would not become vacant for the purposes of the chapter.

[Lord Best]

I am delighted to hear that from the noble Baroness. My amendment was specifically about transfers, where we did not want two vacancies to be scored when clearly there is only one, since the person moving immediately occupies another home. I think that the noble Baroness hinted earlier that transfers would probably be treated in the same way as exchanges.

[Baroness Williams of Trafford]

I think that the noble Lord is right—he is more alert at this hour than some of us.

I also hear the reasons behind Amendment 68E, in the name of the noble Baroness, Lady Grender. I am afraid that I cannot accept it, because it would radically change the duty for local authorities to consider selling high-value housing by preventing the duty from arising until a property has been vacant for more than six months. She talked about the policy increasing homelessness, temporary accommodation costs and the housing benefit bill. We have, as I have probably said to her on a couple of occasions now, invested more than £500 million to help local authorities prevent almost 1 million people from becoming homeless. The two-for-one replacement in London will mean that more families can be housed in the capital.

I bring us back again to the intentions outlined in the Government’s manifesto. The argument is similar to that which I spoke to last Tuesday. The legislation is framed to provide local authorities with some flexibility on what housing to sell and how to make payments to the Secretary of State. The duty is an important part of this, to ensure that the payments are focused on high-value housing, both in the calculation by government and the way they are met by local authorities.

I have listened to the noble Lords, Lord Kennedy and Lord Kerslake, and thank them for Amendment 67C, but I cannot accept it. It is right that the Secretary of State should be able to continue to take into account housing stock that has been subject to a transfer when making a determination.

My noble friend Lord Carrington of Fulham asked whether we were trying to stop any stock transfers. Local authorities are still able to transfer their stock to a private registered provider. The legislation does not stop the transfer of stock, but it is important that local authorities do not try to avoid having to sell off their high-value assets by making stock transfers. Where there is a need for more homes, we should be unlocking the value that local authorities hold in vacant high-value housing in order to fund more homes and help people into home ownership. The legislation means that the sale of vacant high-value housing will have to be one area that local authorities consider as part of their negotiation of any transfer, just as it will be one of the considerations of the Secretary of State when deciding whether to grant consent to the transfer.

The noble Lord, Lord Kerslake, and my noble friend Lord Carrington talked about perpetuity and how long the Secretary of State will continue to demand payments. We do not intend to place a restrictive provision on the length of time after a stock transfer when a determination could still be made. This will be considered on a case-by-case basis, recognising that every local area is different.

Housing and Planning Bill

Debate between Baroness Williams of Trafford and Lord Best

Thursday 3rd March 2016 Lords Chamber

[Baroness Williams of Trafford]

Absolutely, and they will be placed in the Library. I have the implied first-time price of new build—not the demand figures—by region, which might temporarily satisfy noble Lords. In the north-east, it is £138,000; in the north-west, it is £144,000; in Yorkshire and Humberside, it is £144,000; in the east Midlands, it is £152,000; in the West Midlands, it is £148,000; in the east of England, it is £220,000; in London it is £356,000—no surprises there; in the south-east, it is £352,000; in the south-west, it is £179,000; and in the whole of England it is £216,000. I hope that is all right as a starter for ten, but I will endeavour to get those demand figures for next week.

Within London, up to 47% of households that are currently renting privately would be able to secure a mortgage on a new-build starter home—in the lower quartile of the first-time buyer market—compared to 37% who could buy a similar property now, priced at full market value. This demonstrates that starter homes, at a 20% discount, will provide a genuine opportunity for home ownership for many more households and help them to get a lasting foothold on the property ladder. The noble Lord, Lord Best, talked about the equity loan scheme as being a discount; the very nature of its name implies that it is a loan—it has been extended to 40% in London. But the whole of the debate so far has talked about the inaccessibility of the housing market, particularly for first-time buyers, and London is a really hot case in point. Either we want Londoners to access the London market or we do not—I think that all noble Lords do want Londoners, particularly the young ones, to access the London housing market.

The noble Lord, Lord Best, also said that Help to Buy distorts prices and drives down supply. A government research report that came out last week stated that, actually, Help to Buy does not distort prices but drives up supply. Government research found that 43% of additional new homes built were as a result of Help to Buy. It has, understandably, been an extremely popular product.

[Lord Best]

I am not saying that the current 20% Help to Buy support has not been helpful in the marketplace. What I am saying is that the increase from 20% to 40% Help to Buy assistance in London, coupled with a 20% discount—that is where the discount comes in, a cash discount—adds together to 60% of the value of the property. The Minister is right to say that I commented that others have criticised the 20% Help to Buy support—I think we have yet to see it, but we can guess that 60% help to people buying in the form of 40% Help to Buy plus 20% discount really is an extraordinary level of assistance to people, much as we sympathise with their need to move out of rented homes if they can.

[Baroness Williams of Trafford]

I thought that the noble Lord had said discounts, so I apologise if I misheard him. I think I need to reiterate that point: the 40% Help to Buy loan equity plus the 20% discount do not add up to a 60% subsidy. Effectively, 40% of that 60% is in fact a loan and has to be paid back.

Right to Buy: Housing Associations

Debate between Baroness Williams of Trafford and Lord Best

Monday 12th October 2015 Lords Chamber

[Baroness Williams of Trafford]

My Lords, the Government will expect housing associations to abide by their obligations in terms of homes for disabled people, for homeless people and for sufferers of domestic violence.

[Lord Best (CB)]

My Lords, the Government are very wise to back off from giving a statutory right to buy to housing association tenants. I congratulate the Secretary of State for coming to this compromise with the National Housing Federation. However, 55% of housing associations voted in favour of this. The rest have yet to make up their minds or voted against it. What will happen to the housing associations that do not voluntarily sell to their existing tenants?

[Baroness Williams of Trafford]

My Lords, as I understand it, 94% of housing associations signed up to this but the federation confirmed that the offer—

[Lord Best]

I think that 94% of the properties owned by housing associations are covered but only 55% of the housing associations themselves, many of them small bodies such as independent charities, have signed up to the deal.

[Baroness Williams of Trafford]

My Lords, I stand corrected by the noble Lord, who is far more expert than I am. However, the federation has confirmed that the offer is sector-wide and that it will encompass all housing association tenants. If necessary, the Homes and Communities Agency will be given additional powers to assess housing associations to a new homeownership standard. If necessary, we will take further steps to ensure that the right to buy is available to them, in line with our manifesto commitment.

Housing Associations: Right to Buy

Debate between Baroness Williams of Trafford and Lord Best

Tuesday 9th June 2015 Lords Chamber

[Baroness Williams of Trafford]

My Lords, this is not about seizing the assets of housing associations. The right to acquire currently operates on the basis that receipts from homes sold enable housing associations to reinvest in new affordable housing.

[Lord Best (CB)]

My Lords, in carrying out the consultation that she has mentioned, would the Minister include the Institute for Fiscal Studies, along with commentators in the Economist, the Telegraph, the Times and the Financial Times, which have all pointed out the very grave consequences if this unfortunate policy is pursued?

[Baroness Williams of Trafford]

My Lords, the Government, and in particular my honourable friend in the other place, the Minister, Brandon Lewis, are already leading the engagement with the sector on our housing commitments, as set out in our manifesto, and are happy to meet Members of this House and others.