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Housing and Regeneration Bill

I welcome the Bill as being the first serious attempt for perhaps three decades to seek to address the issues of severe housing shortage and unaffordability. The Conservative spokesman, the hon. Member for Welwyn Hatfield (Grant Shapps), tried—rather synthetically, I thought—to counter the Bill, and in doing so made one of the thinnest speeches I have heard for a long time from the Opposition Front Bench. The Bill is a major step forward, and he would be wise to recognise that, although I would be the first to agree with other Members that some aspects of it need further consideration, and I want to concentrate on some of them. The first is the scale of new house building in relation to need—the Conservative spokesman refused on more than half a dozen occasions to comment on that. The number is still distinctly short of what is required. For more than a quarter of a century, public housing in this country has been starved of investment. It has plummeted from 6.1 per cent. of Government spend per year in 1981—the trend started under Mrs. Thatcher's Government—to just 1.6 per cent. in 2005. That is a staggering drop. If we put it in current price terms—which is the way to make sense of it—the Government today are spending about £22 billion less a year on public housing than their predecessors were at the end of the 1970s. We should add to that the fact that half the public stock has been removed by sales and transfers of various kinds. The council waiting list was 1.6 million two years ago, and it is probably higher today, and it is now virtually impossible to get a council tenancy at all in current conditions. The situation in my town, Oldham, is similar to that in many other Members' areas; in Oldham, the waiting list is now 11,000 and the total number of council properties remaining after all the sales is only 12,000 or 13,000. Even if someone is lucky enough to get a council tenancy, the rent-setting formula has now been changed from pooled-historical rent to one that is partly related to owner-occupied housing in the area. Therefore, just as house prices have risen dramatically, rents have also risen sharply, sometimes so much that they are out of financial reach. As Members have also said, no one today has got a conceivable hope of buying their way out into the private sector as almost everywhere in the country the ratio of mortgage loans to income is now 5:1 or 6:1, and in some places even 8:1 or 10:1. Nor is it clear—I find this very worrying—that a small increase in housing will necessarily stabilise, let alone bring down, housing prices in view of the fact that the flow of house-purchase lending, which is now at the staggering level of £1 trillion a year, is rising so much faster. If extra house building increases the stock by, let us say, 1 or 2 per cent. a year, which might well be an effect of this Bill, while at the same time the credit available to buy it is rising at 5 per cent. or even more a year, house prices can hardly be expected to fall. I admire the aspirations of the Bill but I do not think it is ambitious enough. I think that what is needed is a return nearer to historical levels of housing investment and a major construction drive targeted at good-quality council housing made available at construction-cost-related rents and entirely unrelated to the ballooning prices in the private sector. Although the Government's proposals for increased house building are very welcome, I fear that they fall well short of matching the demand. The Government are proposing 200,000 new homes a year to 2016, and 240,000 new homes a year by 2020, but the housing economist with the best reputation in this area, Alan Holman, has estimated the required new housing formation every year at about 220,000 and that the extent of unmet housing need that has accumulated over the years—due to overcrowding, for example, and bad-quality, damp housing—is probably another half a million homes. If that latter category were to be cleared in a 10-year housing programme—which, I think, is modest—that would require 270,000 houses a year, which is considerably more than the Government's aim.