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House-building Programme

My Lords, I declare quite an important interest, as director of the Joseph Rowntree Foundation. I think noble Lords have alluded to six of our reports so far. Indeed, noble Lords have covered almost every one of the fine points I was going to make, not least the noble Lord, Lord Lucas. This has been an excellent debate, and I thank the noble Baroness, Lady Scott, very much for raising the profile of these issues. Perhaps I could use my few minutes to give a little emphasis to some of the points that have been partially covered already and expand upon them. First, there is very little point, for those of us concerned with solving social problems in simply building another however many thousand new homes it is—my figure is 210,000—if we do not put in the resources that ensure that a fairly substantial proportion of those homes, about a third, are sufficiently subsidised to reach the people who will not be able to purchase on the open market. The noble Lord, Lord Whitty, referred to haciendas in Surrey and the noble Lord, Lord Brooke, to Brighton apartments overlooking the sea used as second homes. There is no point in building 210,000 extra homes a year if we do not make darn sure that we secure a proportion of those for people on lower incomes. Unfortunately, a Rowntree report yet to be published will tell the Government that the level of homes being built within the category of affordability—social renting and low-cost home ownership homes—will shortly reach the lowest level since the mid-1980s—20 years ago—when account is taken of the fact that the Housing Corporation’s programme is lower than it used to be and that we have done away with social housing grant administered through local authorities, a separate stream of important funding that made more affordable housing available. So we are down to rather low levels, the lowest for 20 years, coming through the funnel of Housing Corporation funding that makes homes affordable. My second point will not go down well in all corners. It is no good us hoping that if we concentrate exclusively on the affordability of homes and on the subsidised housing that I am the first to champion, we will do away with housing problems in this country and other problems will take care of themselves. Yes, with 101,000 homeless households currently in temporary accommodation, with, as Shelter’s recent report shows, 900,000 children living in overcrowded conditions, people who cannot afford to take their place within the market will need assistance. But we also need to cater for the very many people who are able to afford house prices provided those are not wildly out of line with their earnings and their potential to take out mortgages. The Rowntree report that came out last week looked at what we call the intermediate housing market. These are the people whose incomes are too high for them to expect any social housing—they cannot get council housing or housing association accommodation—yet too low to afford housing in the bottom 10 per cent of house prices in their area. It is not terribly helpful to know what average incomes and average house prices are in a particular area—what really matters is what people on the lowest incomes, who cannot get into social housing such as council housing or housing association homes, can afford, and what the prices are for them at the bottom of the housing market. That group of people who are stuck in the middle—who cannot get social housing and are not able to buy—has grown enormously. If we say ““Let us build for those who are poor, those who have modest incomes and not have these huge numbers of other homes, and all will be well””, the number of people stuck in the middle will increase as more people will be unable to afford the prices of the homes that remain if overall supply keeps, as it is and has been for some 15 years, so far behind the level of demand. It is a relentless process that every year new households are formed. We may not like to hear that the first problem, as the noble Baroness, Lady Wilkins, said when she referred to the recent Town and Country Planning Association report—which was funded by the Joseph Rowntree Foundation—is the longer lives that we live. We now have a complete extra generation to house that we did not have some 50 years ago because we live longer. That is great, but it means a lot more households to house. We know that households now form in much smaller groupings, not in families with grandparents and four children all living in one place, but in single-person households. There are a lot more of those. Inward net migration is also a factor, although not of refugees and asylum seekers—who make very little difference to the housing market—but of those who come here to work, especially those who are relatively well-off, such as bankers and people who work in the financial services industry. They have a big impact on the market because they bring with them the resources to price out local people—unlike the asylum seekers who are dispersed to areas of very low demand or are overcrowded in accommodation in London and elsewhere. Inward migration accounts for an extra stream of additional households—about a fifth of all new households—and our growing economy needs those migrants. This relentless pressure continues. It will not go away and we have to address affordability for all sections of society, including the group that falls in the middle, who cannot afford to buy and would not get the social housing that we have been talking about. I fear that it is not helpful to suggest that people will go north. Even where we are getting the economy to pick up in the inner urban areas of places such as Newcastle—where there has been a miraculous turnaround in the inner-city location in which people can live and work—the population of Newcastle is still falling according to the figures in the previous two censuses. It will take many decades before a very serious turnaround in the economy leads to the population ceasing to flow to what some believe to be the capital of the world. London has magnetism not just as an international city, but, in many respects, as the international city, on which the wealth of the nation is so dependent. Those trends will not turn around in a hurry and people will not move north in their droves. We must recognise that. Even when we say, ““Let’s give the south-east a bit of a breather and turn our backs on more development there””, we must recognise that the people who are pressurised out of the south-east—it is happening all the time—push up the house prices in the neighbouring regions. In the south-west, there are greater problems of affordability when one takes incomes in relation to house prices than we do even in the south-east. The people who can move in the south-east and London can pay the high prices there. They clamp down on the south-east and the south-west, the eastern region or the East Midlands suffers. My eight minutes expires at this point, but the problems will not go away. This has been an excellent debate and I am most grateful to the noble Baroness, Lady Scott, for securing it.