Affordable Housing: Supply

Lord Whitty Excerpts

Thursday 25th April 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I congratulate my noble friend Lord Chandos on initiating this debate. I am particularly pleased at the terminology used for the Motion; “genuinely affordable” housing is what we are on about. In the Government’s jargon, “affordable” has become meaningless. In many parts of the country and for hundreds of thousands of families, 80% of private rent levels are not affordable. To use that as a term of art in legislation and regulation on affordable rent and in affordable housing statistics is misleading, given the depth of the problem that we have to address.

I likewise look forward to the maiden speech of the noble Baroness, Lady Smith of Llanfaes; I hope that she can bring a different perspective to this. I am glad to follow the noble Lord, Lord Best, except that he has pinched most of what I was going to say—that is not going to shut me up, but I nevertheless agree with pretty much all that he said.

In the days of Lloyd George, to which my noble friend referred, after the First World War about 75% of people lived in private rented accommodation—most of it pretty squalid and a significant part of it very insecure, with the powers of landlords being strong. We transformed that over most of the last century, until relatively recently when we started to go backwards. By the 1980s we were in a position where, since the 1920s, social housing had provided decent housing and affordable prices for a large section of the population, rising to about 30%. Since the 1980s, however, with right to buy without the proceeds being 100% fed back to new building, with demolitions and with stock transfers, that figure for social housing has fallen; it is now down to about 17%. For those in the property market, the prices of new homes have risen from three and a half times average earnings to something over eight times. Mortgage holders, aspiring mortgage holders and private renters are now struggling. For many people, mortgages are now unattainable, and many who had secured mortgages are threatened by the phenomenon of rising interest rates.

In every part of the housing market, there is insecurity, unaffordability and distress. There is also a decline in physical conditions, which I will come on to. At the same time, as the noble Lord, Lord Best, said, household formation has continued apace and, according to the figures that everybody has accepted in recent years, we need to build or provide, one way or another, 300,000 new homes a year. We have never attained anything like that figure—the figure that we have from time to time hit 200,000 or slightly over is an exaggeration, as it is a gross figure, not a net one, and does not take account of demolitions.

It has been the case that, for most of the last century, social housing has provided a positive, safe and affordable alternative. Regrettably, that has declined over recent years. There have been a number of scandals in both local authority and housing association accommodation, with mould and damp, unhealthy conditions, and repairs not being addressed. This has made social housing less attractive.

In the days when both the numbers and standards of local authority social housing were improving and setting the benchmark for good housing associations, the relationship between local authorities, social landlords and the construction industry were very different from what they are now, as the noble Lord, Lord Best, has implied. On the one hand, local authorities had substantial in-house staff and architects, and had their own direct maintenance staff in most cases; they were likely to be the main procurers of house construction work in their areas. On the other hand, in the days of Harold Macmillan and Harold Wilson, the construction sector was highly competitive locally, with a dozen or so SMEs—mainly large family businesses—competing for their local authority’s work. Nowadays, as the noble Lord said, most architect departments and direct works have been dispensed with, and even a competent clerk of works does not exist. The housebuilding sector is dominated by large housebuilders and large developers, which means that the balance of power within the housebuilding market has changed dramatically. We need to do something about that.

There are people who blame the planning system for the lack of new housing provision. It is not perfect, but we do not want to uproot the planning system entirely, because it protects the environments in which people live and the provision of decent housing. It is not the planning system that is the major problem but, frankly, the fact that even when planning permission has been granted there are probably up to a million homes which have not yet been started. It is that, rather than blockages in the planning system, which means that the supply of new homes has been so diminished. The reduction of environmental standards or the loosening of planning restrictions will not speed up that process unless we address it directly, by insuring that starts are made in those areas.

We also have to recognise that the usual figure for new homes completed is the gross figure, not the net figure. In other words, it does not take account of demolitions, particularly those of social housing. I have argued before in this Chamber that the predilection of many developers, and in some cases planning committees, to demolish and rebuild both public and private estates, rather than take the option of retrofit—which is both environmentally more sensible and likely to be much less socially disruptive—is a problem. We need to make sure that, in all major planning permissions, the alternative of retrofit is always considered.

We will need more social housing, and most of it will come from local authorities. As I have said, local authorities have been sadly diminished, financially and in their expert staffing, since their great days. At one point, I thought—or was nearly persuaded—that the idea of having hived-off arm’s-length companies owned by local authorities would help provide social housing, but we have seen local authorities of all political persuasions have their fingers severely burned by going down that road. We need something closer to what the noble Lord, Lord Best, was arguing for—regionally based multi-local authority area corporations to become the major procurer within the housing market and therefore face down the housebuilders in their intentions to, for example, keep the level of social housing low in any mixed development, and then halfway through the project say that they can no longer afford it and get it reduced yet further. That phenomenon must be removed from the housing market.

I agree with the noble Lord, Lord Best, that we need a new housing strategy. Whether that is a housing committee, a housing corporation, or a housing Cabinet committee, I do not mind, as long as we have an overall approach that can face up to all these problems.

For many families and key workers, as the noble Viscount, Lord Chandos, has said, it is impossible to find a place to live that they can both afford and be safe and secure in. We need to make a change. I hope the Labour Government will make that change. Whoever is running this country in the next few years, the housing problem for the least secure people must be urgently addressed.