Affordable Housing

Lord Suri Excerpts

Thursday 25th October 2018 Lords Chamber

[Lord Suri (Con)]

I thank the noble Lord, Lord Shipley, for his work in securing the time for this debate. I think that there is a new consensus in British politics. We all agree that house prices are far too high and that home ownership is completely beyond the reach of younger generations.

To be clear, there are real benefits to renting—people can move around more easily and diversify the assets they hold—but it can be only a phase, rather than a permanent destination. Renting indefinitely with no scope to raise the deposit required is a miserable state to be in and saps the vitality of the employment market.

Home ownership improves the stewardship of not just homes, but public places, as people have a real and tangible stake in the community they live in. Sky-high rents also prevent people moving to the parts of the country that they would be most productive in. While the evidence is mixed as to the agglomeration benefits of British cities, cities such as Oxford, York, London and Bristol substantially increase the productivity of those who go to work there. But the lack of affordable homes for sale or rent saps the ability of young people to move.

The reasons for this are quite plain. Our efforts to improve affordability have failed and might be doing damage to the overall cause. The benefits of Help to Buy have disproportionately gone towards housebuilders, who can raise prices knowing that their customers have an additional revenue source. In this country we have tinkered at the edges of a demand-side policy without addressing the real problem, which is a lack of supply.

As the draft analysis of the Letwin report says quite clearly, there is no evidence that developers try to “lock up” land from the market before they seek final planning permissions. The key problem is the lack of available land. It has been a mantra of the nimby tendency to repeat that brownfield land can solve our issues, but there simply is not enough left in our major cities to meet demand and increase supply to reduce prices to an affordable level. If developers do hoard land to maintain prices at unsustainable levels, there is a good justification for intervention by taxing the unused land at a high and escalating level.

The metropolitan green belt was a sensible idea when it first arose. Trying to prevent urban sprawl made sense and industrial urban centres were seen as something to be contained. But cities now host relatively little manufacturing and require homes within commutable distance for employees who work in service industries. Those of us who commute past Battersea power station will appreciate how mixed residential and office spaces can revive an area.

The policy has now been hijacked by an array of special interests that have a primary aim of trying to keep house prices high. In the south-east, the main complaint is that developments will be poorly planned, with no heed for infrastructure upgrades. This is patently wrong. New towns built in the post-war era are some of the most pleasant and well-served places in the country, even if they do have too many mini-roundabouts.

The land for New York’s Central Park was earmarked before the urban city grew out to meet it, due to good planning. Applying an assumption of favourability to planning applications in the green belt would end the choke that they put on truly affordable housing.