Housing and Planning Bill
Public Bill Committee, 10 November 2015.
James Gray (Conservative, North Wiltshire)
I welcome you all to the first Committee sitting of the Housing and Planning Bill. I hope to keep our discussions pleasant and civilised. There are a couple of little rules. We are not allowed to have coffees, or to drink or eat anything else, and if anyone’s mobile phone goes off they will earn my strict displeasure, or a wiggle of my eyebrow at the very least.
Before we begin the more interesting part of the sitting, I ask Members who have interests to declare now to do so.
Richard Bacon (Conservative, South Norfolk)
I am organising a seminar on 20 November called “How should Norfolk grow?” It has eight commercial sponsors: Barclays bank, the New Anglia local enterprise partnership, the local train franchise, Anglian Water, Saffron Housing, Norwich International airport, Swallowtail Print and the Maids Head hotel.
Brandon Lewis (Conservative, Great Yarmouth)
May I draw attention to my entry in the Register of Members’ Financial Interests?
Stewart Jackson (Conservative, Peterborough)
May I also draw the Committee’s attention to my entry in the Register of Members’ Financial Interests?
Chris Philp (Conservative, Croydon South)
May I likewise draw the Committee’s attention to my declarations in the Register of Members’ Financial Interests?
Julian Smith (Conservative, Skipton and Ripon)
Likewise, I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Seema Kennedy (Conservative, South Ribble)
I draw Members’ attention to my declaration in the Register of Members’ Financial Interests.
Helen Hayes (Labour, Dulwich and West Norwood)
Chairman, I would like the Committee to note that I am a councillor in the London Borough of Southwark and that I employ a councillor in my parliamentary team.
Peter Dowd (Labour, Bootle)
I also declare that I am a member of my local authority.
James Gray (Conservative, North Wiltshire)
A large number of interests. I wish I had some.
Kevin Hollinrake (Conservative, Thirsk and Malton)
May I draw Members’ attention to my entry in the Register of Members’ Financial Interests?
James Gray (Conservative, North Wiltshire)
All duly noted. Thank you very much indeed.
Before we move to the discussion, I need to deal with a few formalities. I first call the Minister to move the programme motion.
James Gray (Conservative, North Wiltshire)
That means that the deadline for tabling amendments to be considered in the first two line-by-line Committee sittings is by the rise of the House on Monday 16 November.
James Gray (Conservative, North Wiltshire)
Copies of written evidence that the Committee receives will be made available in the Committee Room if anyone wishes to pick them up.
Examination of Witness
James Gray (Conservative, North Wiltshire)
We now move to the interesting part of the morning, which is oral evidence from the Greater London Authority. I particularly welcome Richard Blakeway. Thank you for taking the time to come and speak to us.
Before calling the first Member to ask a question, I remind you all that questions must be limited to matters within the scope of the Bill. If they are outside that scope, I will call you to order. We must stick to the timings in the programme, which means, I am afraid, that we sadly have only until 10 o’clock. For the sake of the record, would you kindly start by introducing yourself?
James Gray (Conservative, North Wiltshire)
Members now need simply to catch my eye and then to ask Mr Blakeway appropriate questions.
Chris Philp (Conservative, Croydon South)
Mr Blakeway, could you start by briefly outlining the powers you currently exercise on the London Land Commission and explaining to the Committee whether there are any further powers you might find useful?
Chris Philp (Conservative, Croydon South)
Do you need any further powers to make sure that other public bodies beyond the GLA—such as Transport for London, the NHS, Network Rail or even the Ministry of Defence—will actually bring forward the sites for disposal? Rather than you simply recommending it, do you need any further powers to —perhaps compel is the wrong word—take over the disposal process?
Chris Philp (Conservative, Croydon South)
Finally, are the CPO powers in the Bill adequate for the purposes of the Mayor of London and the GLA for things to go further?
Helen Hayes (Labour, Dulwich and West Norwood)
What do you think will be the impact of the starter homes clause on the provision of affordable housing in London?
Helen Hayes (Labour, Dulwich and West Norwood)
As you know, the cap price for starter homes in London is £450,000. Could you say a little about for whom you think a starter home at £450,000 in London will be affordable? Are you content that the cap is appropriate?
Helen Hayes (Labour, Dulwich and West Norwood)
Finally, are you concerned that starter home development will be free from the community infrastructure levy and section 106 contributions?
Matthew Pennycook (Labour, Greenwich and Woolwich)
May I press you on the impact of the starter homes clauses on more innovative models of affordable and intermediate housing? I am thinking, for example, of Pocket housing, which the Mayor has been very supportive of, and where eligibility is secured in perpetuity through a section 106 agreement. Do you think those clauses will have an impact on those types of models and their ability to expand across the capital?
Matthew Pennycook (Labour, Greenwich and Woolwich)
As the Bill stands, have you been assured that they are an addition and will not simply squeeze out other affordable housing in the capital?
Richard Bacon (Conservative, South Norfolk)
Mr Blakeway, what possibilities are there for the provision of service plots within the GLA area for people who wish to build their own home, either individually or in what the Self-build and Custom Housebuilding Act 2015 calls “associations of individuals”, who come together to build their own houses?
Richard Bacon (Conservative, South Norfolk)
You mean that a housing association itself could offer self-build and custom build to its clients?
Richard Bacon (Conservative, South Norfolk)
In relation to large cities, Berlin has more than 3,000 dwellings that have been developed very recently using self-build and custom house building. Are you saying that in large urban areas such as London it is not a problem to do it in the way that some people are suggesting?
Roberta Blackman-Woods (Labour, City of Durham)
Are you certain that the sale of high-value council housing will yield enough resource to fund the right-to-buy scheme? Do you think it will guarantee that enough houses are built?
Roberta Blackman-Woods (Labour, City of Durham)
The Bill does not require social housing to be built in the same place that houses were sold off through the right-to-buy scheme, so how can we guarantee that enough of those houses will be built in London?
Roberta Blackman-Woods (Labour, City of Durham)
Nevertheless there is not a requirement to do that. Would it be more helpful if there was a requirement that the houses are replaced in the same area that they are sold from?
Seema Kennedy (Conservative, South Ribble)
In relation to clauses 22 to 31 on rogue landlords, do you think the provisions in the Bill will raise the standard of property available in the rental sector in London?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Mr Blakeway, one of the biggest challenges in providing more housing is delays in the planning system. There are a number of measures in the Bill, such as insisting on local plans by 2017, simplifying overall plans and more timely decisions in planning in principle. How do you think these will work out in terms of expediting the planning system?
Stewart Jackson (Conservative, Peterborough)
Obviously there is a predisposition in the Bill towards support for residential accommodation and housing in London and across the country. What impact do you think that might have, specifically in London, on commercial and business premises?
Brandon Lewis (Conservative, Great Yarmouth)
May I take you back to the conversation a few minutes ago about starter homes? Are you able to give us an idea, even if it is a ballpark figure, of the average price paid by a first-time buyer for a home in London?
Brandon Lewis (Conservative, Great Yarmouth)
So that is somewhere below the cap for starter homes?
Brandon Lewis (Conservative, Great Yarmouth)
So at what sort of level would you like or do you expect starter homes to be provided for in London?
Brandon Lewis (Conservative, Great Yarmouth)
From the work you have done looking at this and the opportunities for London in the starter homes brand, do you see that as an opportunity to get an overall increase in the housing supply in London—to push that supply up?
Roberta Blackman-Woods (Labour, City of Durham)
How can you be so confident? Have you carried out work on this to know that other affordable housing products will also be delivered alongside starter homes?
Brandon Lewis (Conservative, Great Yarmouth)
Just to finish off my query on starter homes, bearing in mind your comments a few minutes ago about planning permission in principle on brownfield land and the London Land Commission—I should declare that I am joint chair—do you see a role for the work that the London Land Commission is doing in identifying land, working with that brownfield register and planning in principle in being able to deliver homes such as starter homes?
Brandon Lewis (Conservative, Great Yarmouth)
Okay, I have two other areas that I want to touch on. I know my colleague wants to jump in as well. The current Mayor and your office have had some fairly ambitious targets around housing provision for London and have achieved some really good numbers. I know you have big ambitions going forward—on Second Reading we heard my hon. Friend the Member for Kingston and Surbiton (James Berry) outline some of his ambitions, which involved having more extra homes built in London for every home sold, which is the point you were making. With the brownfield registers, planning permission in principle, the compulsory purchase order changes, the section 106 changes and so on that are outlined in the Housing Bill, and the work that the London Land Commission is doing, what do you think that means for affordable housing provision in London and for the work of your office?
Marcus Jones (Conservative, Nuneaton)
Good morning, Mr Blakeway. Much of the Bill is rightly predicated on supply, but using the existing stock we have to support people into housing is also extremely important. How do you think the Bill will support landlords in recovering properties that have been abandoned?
James Gray (Conservative, North Wiltshire)
In the two minutes left to us, Teresa Pearce.
Teresa Pearce (Labour, Erith and Thamesmead)
Given what is in the Bill about starter homes, do you think the Mayor’s housing zone bids that have already been successful will need to be revisited? Secondly, where housing associations are undertaking the build—their tenants now have the right to buy—because of the quality that needs to be in a housing zone bid, some of those properties will cost more to build than the market value. Is it your understanding that they will be recompensed the full cost or just the difference between market value and the sale price?
Teresa Pearce (Labour, Erith and Thamesmead)
Will they be revisited?
James Gray (Conservative, North Wiltshire)
Mr Blakeway, may I thank you very much on behalf of the Committee for coming to give evidence? It is very useful indeed. We will now move on to the next witnesses.
Examination of Witnesses
James Gray (Conservative, North Wiltshire)
First of all, welcome to all our witnesses. Thank you very much for coming to give evidence to the Committee. For the record, please would witnesses introduce themselves to us?
Roberta Blackman-Woods (Labour, City of Durham)
We have just heard evidence from the Deputy Mayor with responsibility for housing. He was fairly confident that, in addition to starter homes being delivered, other forms of affordable housing would be guaranteed. Perhaps we could have your views on this. Do you agree with him?
James Gray (Conservative, North Wiltshire)
You do not all have to answer every question.
Seema Kennedy (Conservative, South Ribble)
Councillor Tett, what is the LGA’s view on the Bill’s provisions on brownfield sites? Will the power for local authorities to compile registers of brownfield land help to protect the green belt, particularly in places such as Buckinghamshire? I know that your view is of the whole LGA.
Seema Kennedy (Conservative, South Ribble)
So as a concept you think it is a good idea. Do you also think that it helps communities to have ownership of these things, because there will be something very visible for them to see and feed into?
Helen Hayes (Labour, Dulwich and West Norwood)
From your understanding from your respective boroughs and work undertaken across the LGA, do you believe the sale of higher-value council homes can cover the costs of both the right-to-buy scheme and the levels of replacement of both the housing association homes lost to the rental sector and the loss of those council homes? Is that a realistic scenario?
Helen Hayes (Labour, Dulwich and West Norwood)
Given some of the uncertainties that you have all outlined, do you think too much is being left to regulations when it should be in the Bill?
Stewart Jackson (Conservative, Peterborough)
I was rather remiss earlier for not declaring another interest that might not be in the Register of Members’ Financial Interests: I am a vice-president of the LGA, so that is on the record. That brings me neatly to Councillor Tett.
James Gray (Conservative, North Wiltshire)
Mr Jackson, it is an unpaid post, is that correct?
Stewart Jackson (Conservative, Peterborough)
Yes, regrettably.
If the Bill becomes law, the Secretary of State will acquire powers in respect of local development plans. With your LGA hat on, Mr Tett, why do you think a significant number of local planning authorities have still not adopted local development plans? Is there a systemic issue that is preventing them from doing as other local authorities have done?
Stewart Jackson (Conservative, Peterborough)
Is that officer capacity or political leadership?
Stewart Jackson (Conservative, Peterborough)
May I ask the London representatives about the parts of the Bill that relate to rogue landlords, banning orders and so on? How do you see that working within the context of London boroughs?
Matthew Pennycook (Labour, Greenwich and Woolwich)
I would like to return to part 4. There is nothing on the face of the Bill that would ensure the proceeds from the sale of high-value council homes—or payments to the Secretary of State, in cases where local authorities do not want to make those sales—will be kept in the local area. Miss Roe, you told the Evening Standard in July that as a result of this policy:
“What we will see is a reduction in the number of social housing units in London and more units built outside.”
There are concerns in rural areas, too, that we will not see that link. Let me ask all the witnesses—what would you like to see, or what would need to be amended in the Bill, to give you certainty that the proceeds will be kept locally, to meet housing need in the area from which the proceeds have been taken?
Matthew Pennycook (Labour, Greenwich and Woolwich)
You say there is an acceptance that some of the proceeds will leave the capital. Do you think, therefore, that the amendment tabled by the hon. Member for Richmond Park (Zac Goldsmith) to keep the proceeds within London is unrealistic?
Richard Bacon (Conservative, South Norfolk)
Councillor Glanville, you said that you want to build, in your authority, affordable housing on land that you own. You emphasised the importance of exemptions. Are you promoting housing co-operatives as a way of delivering affordable housing? Perhaps the other witnesses could answer for their own authorities.
Richard Bacon (Conservative, South Norfolk)
To be clear, for the land that you own on which you plan to build affordable housing going forward, the council is not proposing that those be held as housing co-operatives.
Richard Bacon (Conservative, South Norfolk)
Could you clarify what you meant by “scale”?
Richard Bacon (Conservative, South Norfolk)
The existing housing co-operatives.
Richard Bacon (Conservative, South Norfolk)
But not housing co-operatives.
Richard Bacon (Conservative, South Norfolk)
The reason why I mention housing co-operatives is because they are exempt from the right to buy.
Richard Bacon (Conservative, South Norfolk)
Given that there is a lot of concern about right to buy, I am puzzled why authorities that wanted to protect affordable housing would not use the housing co-operative route as an obvious exemption. It is certainly obvious from international evidence that it can be done at scale using housing co-operatives.
Richard Bacon (Conservative, South Norfolk)
You might want to look at Berlin.
Kevin Hollinrake (Conservative, Thirsk and Malton)
The National Audit Office recently produced a report saying that some local authorities had reduced their budgets for planning and their planning departments by up to 50%. The Bill contains a number of changes that should expedite the planning process. Will this mean that authorities are more likely to staff up their planning departments with the right number of competent people to be able to turn round applications?
Kevin Hollinrake (Conservative, Thirsk and Malton)
But would you accept that cutting a planning department’s budget is a false economy?
James Gray (Conservative, North Wiltshire)
We are drifting slightly wide of the Bill itself.
Brandon Lewis (Conservative, Great Yarmouth)
Councillor Glanville, to take you back to your earlier remarks, can you clarify something for me? I think you said that you have recently been able to negotiate down to—did you say 10% of affordable housing? You linked that to starter homes. Can you clarify exactly what you were saying?
Brandon Lewis (Conservative, Great Yarmouth)
How does that link to starter homes, which have not actually come in yet? I am struggling with why you were linking a scheme that you are negotiating at around 10% with a policy that has not actually come into force yet.
Brandon Lewis (Conservative, Great Yarmouth)
I am trying to understand how that links to starter homes, which are not yet in force.
Brandon Lewis (Conservative, Great Yarmouth)
Right. Just to clarify, the local authority’s negotiation to 10% has nothing to do with the starter homes policy, because that policy is not in place yet.
Brandon Lewis (Conservative, Great Yarmouth)
You also said that you want to build on a lot of the land that you, as a local authority, own. How much land have you got and not built on yet?
Brandon Lewis (Conservative, Great Yarmouth)
Why have you not started building programmes on that land already?
Brandon Lewis (Conservative, Great Yarmouth)
I have been to see things such as City Mills, which is a really good example of great regeneration work that is bringing back more density. You talked about the HRA cap. How big a cap do you need? What extra capacity do you need in your HRA?
Brandon Lewis (Conservative, Great Yarmouth)
Are you using your un-ring-fenced reserves for this kind of work or just relying on the HRA?
Brandon Lewis (Conservative, Great Yarmouth)
So with your current programmes, you have had an increase in building of over 60% since 2010, which is really good. We want to see more homes, and it is particularly good to see that kind of increase in supply. I assume from your earlier comment, that you also support housing supply and home ownership. Bearing in mind we are rebuilding—the reality is that we dropped below 200,000 first-time buyers in 2009; the figure is back to double what it was then, but we want to see that go further, so that more people have the chance to own their own home—surely starter homes have an important part to play in that. I emphasise, as I think Rick Blakeway did earlier, that there is a difference between the price and cap. I appreciate we all want to see houses below that price, but surely creating affordable homes for first-time buyers is quite an important part of the mix?
Brandon Lewis (Conservative, Great Yarmouth)
So to an extent, you would agree with what Rick Blakeway said—that they are an important part of a mix. Do you want to see a mix?
Brandon Lewis (Conservative, Great Yarmouth)
Councillor Tett, on a completely different topic and just taking the LGA—we have become very London-focused in the last half an hour.
Brandon Lewis (Conservative, Great Yarmouth)
I appreciate you sit on a county council, having visited you a few times in Buckinghamshire. Looking at Part 6 of the Bill on neighbourhood planning, you have a number of areas in your county going through a neighbourhood plan process or which already have the plans. Some 1,600 or so are going through across the country. In terms of giving more flexibility, ease and speed to that process of creating the plans, do you think this could potentially play quite a big part in making sure that communities are more supportive of local development, where they feel they have that control? One of the challenges behind neighbourhood planning is that, like local plans, it is time-consuming. Do you think speeding up the process across local government and more importantly in the communities themselves will be welcomed?
Brandon Lewis (Conservative, Great Yarmouth)
If we are able to get the neighbourhood plans simpler and a bit quicker to get through for communities, but with links to areas that have a local plan, do you think that that proper, joined-up approach for community engagement and for ultimately delivering the housing we need would be welcomed by the local authorities?
James Gray (Conservative, North Wiltshire)
Minister, can I be rude enough to say that with an eye on the clock, I want to hear from Roberta Blackman-Woods?
Roberta Blackman-Woods (Labour, City of Durham)
I was struck by your opening remarks, where you all talked about having infrastructure to support housing development and building housing in communities. I wonder whether you think the Bill should do more to address the need for infrastructure and what you think about the provisions that could exempt some starter home sites from paying CIL. Would you like to see that amended?
Matthew Pennycook (Labour, Greenwich and Woolwich)
There is broad agreement that we need to increase supply, but, as you said, Councillor Glanville, affordability is key. There is no statutory definition of affordability, and the Bill gives the impression that the working definition is 80% of market rent. Do you think there is an opportunity here to define what we mean by affordable?
James Gray (Conservative, North Wiltshire)
Without being impolite to the other witnesses, I fear that we have come to 10.45 am, which is the end of our allotted time for the session. Thank you very much to all four of our witnesses for their extremely useful and interesting evidence. I ask the next panel to come to the floor.
If there is anything members of this panel want to say and have not had an opportunity to say, we welcome written evidence at a later stage.
James Gray (Conservative, North Wiltshire)
This is the final session of the morning, running to 11.25 am, when I will cut us off quickly. I welcome our final panel, Mr Orr and Ms Butters. Will you kindly introduce yourselves for the sake of the record?
Matthew Pennycook (Labour, Greenwich and Woolwich)
Mr Orr, regarding the voluntary agreement that you came to with Government over the right to buy, many housing associations voted no, many were unable to convene their boards and come to a decision, yet clause 58 of the Bill brings them within the remit of a compliance mechanism under the home ownership criteria. What options do those housing associations have, given that this will be a statutory measure imposed on them?
Matthew Pennycook (Labour, Greenwich and Woolwich)
And those that did not have time to reply?
Matthew Pennycook (Labour, Greenwich and Woolwich)
Following on from that, there are lots of areas of the Bill where we await further regulations and statutory instruments. What would be the sector’s reaction if the Government did not deliver on commitments given under that voluntary deal?
Helen Hayes (Labour, Dulwich and West Norwood)
Some of the housing associations that recently appeared before the Select Committee on Communities and Local Government indicated that they thought the likely impact of this Bill would be fewer homes delivered by housing associations for social and other forms of affordable rent. I wanted to ask both of you, first, what you think the net impact of the Bill will be on housing associations’ delivery of social and other affordable forms of homes for rent and, secondly, whether you fear developers deserting housing associations in favour of delivering starter homes themselves?
Kevin Hollinrake (Conservative, Thirsk and Malton)
I also sat through the Select Committee hearing, and listened to the evidence from the housing associations. I took the absolutely opposite view, so perhaps we should review the evidence together.
In an article on your website, Mr Orr, under the heading, “More homes to rent (and buy)”, you state that,
“our offer to the government will see an increase in the number of…homes built, which has the potential to ease pressure in all parts of the market, including the rental market.”
Do you still stand by that in the overall context of this agreement?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Can you see measures in the Bill that will speed up the planning process?
Roberta Blackman-Woods (Labour, City of Durham)
At the moment, it seems as if homes sold under the right to buy will not have to be replaced in the same area. Do you have any concerns that that might lead to further regional disparities in the amount of affordable accommodation available? Would you like to see an amendment that would ensure that they are replaced in the same area?
Roberta Blackman-Woods (Labour, City of Durham)
I might come back to that later if there is time. I wanted to move on very briefly to the pay-to-stay provisions, because you mentioned them. I wonder how workable you think the provisions in the Bill are and whether, as a result of pay-to-stay, some of your tenants will not only have to pay a higher rent, but be able to claim housing benefit. Is that an economically competent set of proposals?
James Gray (Conservative, North Wiltshire)
You have sparked a great deal of interest and quite a lot of people are catching my eye, so may I ask for both questions and answers to be as crisp as possible in the 20 minutes left?
Stewart Jackson (Conservative, Peterborough)
May I ask you, Ms Butters, to restate your specific opposition to pay-to-stay? It seems that you might be overlooking fairness and social equity issues and the release of funds that the policy may very well give rise to. London aside, I would contend that £30,000 is significantly above an average wage in somewhere such as Stoke-on-Trent or Newcastle-under-Lyme or several other parts of your area. Therefore, apart from the administrative, bureaucratic issues that Mr Orr mentioned, on what basis do you oppose the policy?
Stewart Jackson (Conservative, Peterborough)
But you agree that registered providers, with the extra income that may arise from this policy—I do not know whether you have any examples; you mentioned some examples earlier—may have the authority and autonomy to ring-fence for developing other sites for social rented housing.
Stewart Jackson (Conservative, Peterborough)
That is a fair point, Mr Orr, but this is at the beginning of the process and Ministers might surprise you in a pleasant way.
Stewart Jackson (Conservative, Peterborough)
Far be it from me to speak for the Ministers, but are you really suggesting that registered providers operate in a hermetically sealed bubble, given that the housing benefit bill has spiralled significantly over the past 20 years? The Government surely have a fiscal responsibility to make big strategic decisions in the provision of public housing when they have a spiralling housing benefit bill.
Grahame Morris (Labour, Easington)
I want to go back to starter homes and the issues that you have touched on. A survey found that 6 million people— 5.84 million, in fact—earn less than the living wage. That is not a TUC figure; it is from KPMG. Some 23% of the labour force earn less than the living wage, and the numbers are going up. There are 750,000 people on zero-hours contracts. What is there in the Bill to address the housing needs of that substantial sector of people who we refer to as the working poor?
Seema Kennedy (Conservative, South Ribble)
Mr Orr, I want to ask you about affordable housing in rural areas, and the portable discount in particular. Will you expand on that? How do you think it will affect the affordability of housing in rural areas?
Gareth Thomas (Labour/Co-operative, Harrow West)
What is your estimate of the net impact of the Bill on London?
Gareth Thomas (Labour/Co-operative, Harrow West)
You must have an instinct, though.
Gareth Thomas (Labour/Co-operative, Harrow West)
With respect, the housing associations among your membership must have given you some indication of their view of the Bill’s effect in London.
Gareth Thomas (Labour/Co-operative, Harrow West)
What is your sense of the impact the Bill will have on co-operative housing?
Gareth Thomas (Labour/Co-operative, Harrow West)
Do you think that the rest of the Bill will help to increase the supply of co-operative housing, or will it just leave it as a tiny fraction of the housing stock?
Kevin Hollinrake (Conservative, Thirsk and Malton)
Ms Butters, I think you referred to the provisions under clause 74 on high-income social tenants as a blunt instrument, yet you conceded that there is provision to charge a proportion of market rent—I think you made some cursory reference to the taper. Is that not proof that the clause is not a blunt instrument?
Kevin Hollinrake (Conservative, Thirsk and Malton)
But the principle is that it is inappropriate for taxpayers to subsidise someone who can live in market-value housing. Do you accept that principle?
Teresa Pearce (Labour, Erith and Thamesmead)
Mr Orr, on the voluntary deal, your organisation and the G15 will work very closely. It is my understanding that the G15 opposes the forced sale of vacant high-value council homes. Is that the position of the National Housing Federation?
Teresa Pearce (Labour, Erith and Thamesmead)
So you are in the same position as the wider federation of the G15?
Maria Caulfield (Conservative, Lewes)
If I understand it correctly, you both say that you agree that those who earn more should pay more, and I think you have both said that housing associations should have the discretion to set rates, but I understand that there is already provision to set higher rents for those who earn £60,000 or more. How many associations use that provision at the moment and, for those that do not, why not?
Maria Caulfield (Conservative, Lewes)
I agree with you in that sense but, if you are not actually collecting that information, that makes it very hard to gather evidence for that argument. If we really need to target—
Maria Caulfield (Conservative, Lewes)
Okay, but if we really want social housing to be for those on a lower income, if you are not collecting that information it makes it very difficult to gain support for your argument. You are not collecting information on which of your tenants actually earns that amount in the first place. I find it hard to understand how you have that evidence if you do not collect it yourselves.
Maria Caulfield (Conservative, Lewes)
Hence why it is in the Bill.
Maria Caulfield (Conservative, Lewes)
Sorry, maybe I am not making myself very clear—
James Gray (Conservative, North Wiltshire)
Order. We have four minutes, and four Members are trying to catch my eye. The current point has been explored reasonably well.
Matthew Pennycook (Labour, Greenwich and Woolwich)
Mr Orr, you have clearly given an indication that you would like to see more freedoms around rents. Clause 73 specifies further reductions in regulations to come. What specific freedoms will the National Housing Federation be pressing for?
Matthew Pennycook (Labour, Greenwich and Woolwich)
And specifics on allocations?
James Gray (Conservative, North Wiltshire)
Finally, very briefly, I call Brandon Lewis.
Brandon Lewis (Conservative, Great Yarmouth)
Very briefly, returning to the first part of the Bill, Mr Thomas made a comment earlier about linking right to buy and starter homes. Mr Orr, bearing in mind that the voluntary agreement means that for every home sold an extra home will be built, do you think that right to buy will lead to a housing supply increase? Within that, do you think that housing associations will be looking to deliver starter homes as part of the mix of housing that they deliver, and will be able to do this?
James Gray (Conservative, North Wiltshire)
I am sorry, Ms Butters, but we have come to 11.25 am, which is an absolutely sharp cut-off point. I apologise for cutting you off in that way. I thank both our witnesses for their evidence. It has been extremely useful and interesting, and we are most grateful.
James Gray (Conservative, North Wiltshire)
Welcome back to the second evidence session of the Housing and Planning Bill Committee stage. I particularly welcome our three witnesses from the British Property Federation, the Federation of Master Builders and the Home Builders Federation.
James Gray (Conservative, North Wiltshire)
Gentlemen, for the record, will you kindly identify yourselves?
Roberta Blackman-Woods (Labour, City of Durham)
It has been suggested that it will be more profitable for developers to build starter homes than other types of affordable housing. Do you think there is a risk that starter homes will crowd out other types of affordable housing on developments? Do you think there should be any exemptions to developments having to provide starter homes, and what would those exemptions be?
James Gray (Conservative, North Wiltshire)
Answer as you will; just freelance it. You do not all have to answer all questions. Just jump in.
Roberta Blackman-Woods (Labour, City of Durham)
It might be useful to have more detail on that specific point but I will move on. In addition to raising queries about the type of property being built, there is nothing about the standards to which the new homes should be built, or improving the quality. Do you think we can rely on developers pushing up the quality of what is delivered?
Richard Bacon (Conservative, South Norfolk)
I would like to ask Mr Berry about chapter 2 of the Bill, on self-build and custom house building. Specifically, do you think the Bill provides enough motivation for people to be on the self-build register, in terms of linking the presence on the register to decisions about how serviced plots are brought forward and allocated?
Richard Bacon (Conservative, South Norfolk)
The Bill provides for exemptions and states that the Secretary of State “may” direct that a local authority is not subject to the duty to give suitable development permissions in respect of enough serviced plots of land to meet local demand. Do you think that is potentially a big let-out clause?
Richard Bacon (Conservative, South Norfolk)
I have a question about the definition of “self-build” and “custom house building”. The Bill rightly excludes plots where the person selling the plot is the person who wholly or mainly decides the plans or specifications. That is obviously to avoid the gaming of the system, but will the definition work in practice?
Richard Bacon (Conservative, South Norfolk)
So a volume house builder offering a fifth choice of tile colour, rather than just four choices, would not meet your standard.
Richard Bacon (Conservative, South Norfolk)
Really?
Richard Bacon (Conservative, South Norfolk)
Really? Can you give an example of a custom house building product that would be excluded under the definition?
Richard Bacon (Conservative, South Norfolk)
Why? The specification would then be wholly or mainly determined by the client, would it not?
Richard Bacon (Conservative, South Norfolk)
The exterior walls are obviously defined, but if the client or customer can decide where the walls and floors go or do not go in the interior, that would be wholly or mainly decided by the client, would it not?
Richard Bacon (Conservative, South Norfolk)
When you say it is a pattern book, that makes it sound like a pattern book offered by the volume house builder. Is that what you are saying?
Richard Bacon (Conservative, South Norfolk)
Is not the whole point of a custom build approach that it is the customer who decides, not what you call a pattern book?
Richard Bacon (Conservative, South Norfolk)
It is limited by the laws of physics—yes, I accept that. But other than that, it is not very limited, is it?
Richard Bacon (Conservative, South Norfolk)
I have one more question, Mr Whitaker. You were talking earlier about quality. The new nationally described space standards are currently guidance. Do you think they should be building regulations?
Richard Bacon (Conservative, South Norfolk)
Mr Berry, do you think it would be helpful if space standards were turned into building regulations, so that there was a minimum to which builders had to adhere?
Matthew Pennycook (Labour, Greenwich and Woolwich)
I have two questions, if I may. First, many people who are likely to access starter homes are likely to be in a position to buy in any case. Do you think the Bill as it stands will widen the pool of potential home buyers?
Matthew Pennycook (Labour, Greenwich and Woolwich)
In terms of general supply and building, can you explain why you think this will deliver additional homes? Will it do anything to deliver and build out the 200,000-plus permissions that already exist?
James Gray (Conservative, North Wiltshire)
You have both forgotten, so we will move on instead.
Stewart Jackson (Conservative, Peterborough)
I remember my question. Mr Fletcher, first, may I thank you and the British Property Federation for your helpful—and brief—brief on the Bill? Can I challenge you about the demonstrable evidence that supports your assertion? I think you said that the starter homes policy will kill off build to rent. Where is the evidential basis that that will happen? If you have a multi-tenure site in a good location with good transport links and otherwise reasonably good infrastructure, why would investors not wish to invest in long-term residential letting? I do not understand how the introduction of starter homes will drastically affect that or make it unviable as a business proposition.
Stewart Jackson (Conservative, Peterborough)
Are you asking us to believe the premise that they are happier with a residential development of, say, 45% pure social rented housing and the other 55% being build to rent?
Stewart Jackson (Conservative, Peterborough)
So affordable rent.
Stewart Jackson (Conservative, Peterborough)
What is the quantum difference between that and a starter home, which is a discounted, effectively intermediate property?
Stewart Jackson (Conservative, Peterborough)
What do you mean by “manage”?
Stewart Jackson (Conservative, Peterborough)
The legislation covers urban extensions and new build in the planning envelope of small towns. It is not just about flats in central London.
Stewart Jackson (Conservative, Peterborough)
Okay. I am not convinced.
James Gray (Conservative, North Wiltshire)
Before we move on from that point, can the Minister come in quickly?
Brandon Lewis (Conservative, Great Yarmouth)
Mr Fletcher, I assume that you are talking about developments such as the multi-family housing we see elsewhere in the world. I understand the point you are making. In that situation, I assume that the developers, knowing that they have to do their bit for the community as negotiated on affordable housing, would look to do what we see elsewhere: if they can make a case for an apartment block, for example, they might provide affordable housing or starter homes on a different site but in that area with the local authority.
Stewart Jackson (Conservative, Peterborough)
On paragraph 14 of your briefing—I am sure members have copies—about automatic planning permission, you make the case that this should move on from simply residential housing to multi-use sites, including leisure, retail, industrial, etc. How would that work? Surely that would be an overly permissive regime—to have that in the Bill and extend what is essentially a welcome proposal to drive the number of houses up to a free-for-all, having every economic activity on a brownfield site?
Stewart Jackson (Conservative, Peterborough)
But this Bill addresses those issues in terms of the discretion that the Secretary of State has for intervening directly in adopted development plans.
Stewart Jackson (Conservative, Peterborough)
Thank you.
Helen Hayes (Labour, Dulwich and West Norwood)
Just returning to section 106, at the moment that section makes a very important contribution to delivering social housing for rent, school places, high-quality green space, GP practices and so on. With the starter home obligation, to what extent do you think house builders will still be happy to make those contributions to creating successful communities where you are delivering new homes?
Helen Hayes (Labour, Dulwich and West Norwood)
If I may, I wanted to ask about permission in principle. The Minister came to the Communities and Local Government Committee yesterday and said that his understanding of permission in principle is that it is simply a site that has been agreed by the local authority that will have permission for housing. Could you explain to me, from the industry perspective, what is the value of that? How does it give you any more certainty and any more leverage with your lenders than a site allocation, on the basis of which a local authority could still not turn down an application on a matter of principle without losing an appeal?
Kevin Hollinrake (Conservative, Thirsk and Malton)
This Bill, taken in the round, is designed to tackle the fundamental problem in the housing market, which is lack of supply. And the lack of supply is partly about who is going to build the houses of the future. I am thinking particularly of SMEs, Mr Berry. SME house builders used to build about 100,000 homes a year in the UK. I think that at the moment they are building about 18,000 homes every year. Is there enough in the Bill to help SME house builders?
Peter Dowd (Labour, Bootle)
Could I get a clarification from Mr Fletcher? I think you referred to the issue of local authority plans being out of date with regard to industrial use.
Peter Dowd (Labour, Bootle)
In relation to brownfield sites, do you have any estimates of the volume of brownfield land that would be viable for housing development?
Peter Dowd (Labour, Bootle)
There is an argument that because local authorities are being pushed in relation to the national policy framework, they are putting sites into the planning framework which are not necessarily viable in relation to brownfield. Is that not the case?
Peter Dowd (Labour, Bootle)
I have one more question on that. Do you have any idea at all of the cost of the remediation of brownfield sites nationally that you as a developer would not want to pay for, or that developers would not want to pay for?
Chris Philp (Conservative, Croydon South)
I would like to continue this line of inquiry in relation to permission in principle and the brownfield register. To get straight to the heart of this, I ask each member of the panel to comment on whether they think that those measures would increase, decrease or have no effect on the number of housing starts we see in our country.
Chris Philp (Conservative, Croydon South)
Okay. So you think it will be a net positive?
Chris Philp (Conservative, Croydon South)
I am going to come back to that in a moment. Mr Whitaker, do you think that these measures will increase supply, decrease supply, or have no effect?
Chris Philp (Conservative, Croydon South)
Good. I am delighted that there is unanimous agreement on the panel that these are positive measures that will increase supply. Let me return to the point that Mr Fletcher touched on. In relation to London in particular, the London Land Commission has had power over specifically Government-related land and has had some measure of success, particularly with Greater London Authority land. Perhaps you would comment on whether there is any opportunity to go further in terms of how the state goes about bringing forward its own land—for example, the 6,000 acres owned by Transport for London—and what specific measures you believe might encourage that to happen.
Chris Philp (Conservative, Croydon South)
Okay. Moving on, Mr Whitaker, to a remark you made in your summary note. You say that clause 106 will be helpful in that it requires local authorities to make the financial benefit of development proposals clear. Were you commenting generally, or in terms of trying to get the CIL money more clearly allocated to projects that are beneficial to a particular locality? An issue that I have encountered historically is that constituents feel that a large amount of CIL money disappears into the borough’s pocket and does not directly benefit the immediate area of a development. Is that a problem and are there measures in the Bill to help to address that?
Chris Philp (Conservative, Croydon South)
Good, and that is the purpose of clause 106, is it not?
Chris Philp (Conservative, Croydon South)
My final question is to Mr Berry. Some smaller developers complain about some onerous aspects of the planning process, not all of which are addressed in the Bill, for example the requirement to do newt and bat studies and all that sort of stuff. How will the Bill help smaller developers? Are there any areas outside the scope of the Bill that may need attention in future? It might be helpful to hear about that.
Chris Philp (Conservative, Croydon South)
I am delighted to hear that.
Gareth Thomas (Labour/Co-operative, Harrow West)
Following on from Mr Philp’s interest in SMEs, presumably the situation facing SME house builders is even worse in a London context than it is nationally. Therefore, would you go into a little more detail about some of the other challenges faced by SME house builders, particularly those wanting to operate in London? With imagination—imaginative drafting, in particular—some of the issues that you have touched on, perhaps regarding access to finance and the skills shortage, might be able to be included in the scope of the Bill through possible amendments.
Gareth Thomas (Labour/Co-operative, Harrow West)
Specifically, would a section 106 requirement on big sites to offer apprenticeships be a helpful requirement for the SME sector? It clearly would not affect SMEs building on smaller sites, but they could benefit from construction apprentices coming through.
Maria Caulfield (Conservative, Lewes)
To follow on from the unanimous verdict that permission in principle would really help to kick off house building, I know from talking to developers and builders in my area that planning is a real stumbling block. With the technical details consent, are you concerned that we are just pushing blockages and delay further down the pipeline? Are you worried that you will get permission in principle but that there will still be a blockage further down the line?
Marcus Jones (Conservative, Nuneaton)
Do you think that the provisions of part 7 of the Bill, which deals with compulsory purchase orders, will help streamline the compulsory purchase system?
James Gray (Conservative, North Wiltshire)
That brings us very neatly to the end of the time allocated. I thank all three witnesses for their evidence, which has been very useful and helpful. I am most grateful to them. I call the next panel.
James Gray (Conservative, North Wiltshire)
We are now glad to be able to welcome Shelter and Crisis to the panel. We have a total of half an hour to take evidence from you. Perhaps you could start by introducing yourselves for the record.
Helen Hayes (Labour, Dulwich and West Norwood)
Both of you, in your written submissions—thank you for them—have emphasised the need to address supply issues in order to address our housing crisis. To what extent do you think that the starter homes proposal will do that?
Helen Hayes (Labour, Dulwich and West Norwood)
Who do you think will benefit from starter homes?
Helen Hayes (Labour, Dulwich and West Norwood)
You both lead charities that seek to support homeless people. Will the starter homes benefit any of the clients you seek to help week in, week out?
Seema Kennedy (Conservative, South Ribble)
Mr Sparkes, I am looking at paragraph 14b of your submission, in which you say:
“Outside of the North of England, Starter Homes will be unaffordable to the majority of households on wages below the median”.
What is the north of England, first of all, in geographical terms? How many people comprise the north of England? I am interested in how you came to that.
Seema Kennedy (Conservative, South Ribble)
I appreciate that you are going to submit it. It seems to me, as somebody who represents a northern constituency, that the north is a term that is sometimes bandied around. Do you accept that it is quite a lot of people?
Seema Kennedy (Conservative, South Ribble)
And comprising a large geographical space, with massive variations between one area and another?
Seema Kennedy (Conservative, South Ribble)
I would appreciate that. Do you accept, though, that when you say that outside the north of England they will be unaffordable—we do not accept that—therefore they will be affordable in large parts of the north of England?
Seema Kennedy (Conservative, South Ribble)
On that London point, we heard from the Deputy Mayor for housing this morning and he said that first-time buyers’ house prices were £290,000.
Seema Kennedy (Conservative, South Ribble)
You accept that that is right? It is well below the cap.
Seema Kennedy (Conservative, South Ribble)
This is for a first-time buyer.
Andrew Griffiths (Conservative, Burton)
Mr Robb, may I come back to you on that? I am sure you would not want to leave the Committee with the wrong impression.
Andrew Griffiths (Conservative, Burton)
You talk about pockets of the country where prices would be lower. Are you not actually talking about the vast majority of the country? In the midlands, the north-east, the north-west, there are huge swathes of the country where starter homes at 80% of market value, perhaps coupled with Help to Buy, help with the deposit, are hugely affordable for the vast majority of first-time buyers.
Andrew Griffiths (Conservative, Burton)
Can you share some more of the specific evidence that you have? You seem to be talking in generalities, but focused on the south-east. Could you be clearer where those figures are coming from? For instance, I look at my own constituency of Burton upon Trent. You talk about high employment areas; we have record low employment in Burton and a starter home in my constituency, at 20% cheaper than market value, coupled with help with a deposit, would be hugely affordable to people on an average income of £20,000 or £25,000. Can you share with us the evidence, the statistics that you have that point to this not being affordable for the vast majority of people?
Andrew Griffiths (Conservative, Burton)
Could you share those numbers, so we can get some further analysis?
Gareth Thomas (Labour/Co-operative, Harrow West)
On that point, I appreciate you are going to send some more information about affordability in Burton upon Trent. I wonder if you could look—
Gareth Thomas (Labour/Co-operative, Harrow West)
Forgive me, Mr Robb—may I finish my question? It would be great to have the stuff on Burton upon Trent, but it would also be great to have the stuff on London.
Gareth Thomas (Labour/Co-operative, Harrow West)
Perhaps you could look at Croydon, Wimbledon, Harrow maybe as well.
Roberta Blackman-Woods (Labour, City of Durham)
We will get more evidence from you and can come back to that. What I have picked up is that you have real concern about whether the starter home scheme will crowd out genuinely affordable housing. What do you think can be done to prevent that from happening?
Roberta Blackman-Woods (Labour, City of Durham)
Have you thought of any exemptions there might be applied to the policy?
Stewart Jackson (Conservative, Peterborough)
Without labouring the point, my impression of the map you produced was a line from the Bristol channel to the Wash. I am mindful of the fact that one in three of the Committee are from London, but this analysis is rather centred on London and the south-east. Surely it depends very much on factors such as the differentials between the market prices of homes and affordable homes. My constituency is quite competitive in that respect, not least because until recently Peterborough had the second worst increase in house prices. There are lots of factors.
Would you concede that, in respect of your specific areas of expertise, starter homes have never been designed to tackle the housing difficulties of your client group in particular: very challenged vulnerable younger people from dysfunctional families and so on? Given the totality of the Bill, and the extra funding that would be released from some of its measures, it does not circumscribe the capacity of the local association to provide specialist supported housing for people with mental health problems, extra care for older people or moving-on accommodation for young people. That can still be done, which is obviously something you would welcome.
Stewart Jackson (Conservative, Peterborough)
Following on from the points made by Mr Griffiths and Ms Kennedy, is there not an argument that says it would use the market mechanism to potentially dampen down the overheated housing market in the south-east and London, and allocate housing to working people in areas that hitherto have not been viable, such as the east midlands, the north-west or Yorkshire and Humberside? That surely must be a good thing because it will drive economic activity, not least in the construction industry.
Stewart Jackson (Conservative, Peterborough)
But you would not disagree with the idea that in the areas where economic activity, growth and prosperity are most needed, where hitherto you have had de-industrialisation and a poor housing market—I remember the pathfinders programme and so on—the starter home programme may potentially assist in that regeneration.
James Gray (Conservative, North Wiltshire)
Keeping an eye on the clock, may I ask for both questions and answers to be crisp and to the point, please?