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Rented Housing

I represent a constituency in inner London where it is difficult to understand the claims that there is anything wrong with being in rented accommodation. One has to be very rich to live in Islington. Indeed, as house prices have gone up, people who move to Islington have to be increasingly rich, so the rich in Islington get richer. On the other hand, those in social rented accommodation—we have had very little private rented accommodation until recently—have to be poor and desperate, and, as the crisis deepens, they have to be increasingly poor and desperate. One has to be very rich, very poor or just lucky to live in Islington. I represent a constituency that is becoming increasingly divided—I see it happening before me. Many of our problems begin and end with housing. My hon. Friend the Member for Islington, North (Jeremy Corbyn) and I, along with many other inner London MPs, speak with huge passion because every week and every day people come to us with housing problems. If they come with other problems, we can help, but if they come with housing problems, often all we can offer them is tissues. They sit and weep, and we feel as though nothing can be done. Over the past 10 years, social housing in Islington, which represents about one half of the housing in my constituency, has been done up, and that has been fantastic. We should be extremely proud of the decent homes programme. When I first went around estates in Islington some 10 years ago, they were disgusting. The public spaces were appalling and the roofs leaked—they were dreadful. Now, the estates are something to be proud of. The difficulty is inside the flats, where people are desperately overcrowded. The problem is that it is not possible for people in social housing in Islington to move out of Islington into other social housing, because the transfer systems that were supposed to be available do not really work. That means that once someone is in social housing in Islington, they are stuck, and always will be stuck. Whenever I speak about housing in Islington, I always talk about the last housing case. I do not want to be guilty of exaggeration, or use a case that is not representative. Sitting on my desk at the moment are two cases involving young women with similar problems. Both are teen-aged daughters who live in housing association accommodation in my constituency. Both girls have babies and share bedrooms with younger sisters. They cannot get rehoused because the housing associations of which their parents are tenants have sons-and-daughters systems, but they will not allow those girls to move into one-bedroom flats, because, if they did, they would automatically be overcrowded. We have choice-based lettings in Islington, but there is no choice, and there are no lettings. The girls do not have sufficient points to get a two-bedroom council flat. They are not able to move into a one-bedroom flat because they have a baby and ought to have a two-bedroom flat, but there are no two-bedroom flats available, so they live with younger sisters—one sister is 10 years old and the other is 12 years old—who are fed up with having to share with their older sister. They are even more fed up now that there is a baby in the bedroom as well. That is the reality. Those are the two cases sitting on my desk now. I do not ever want to exaggerate how bad the housing crisis is in Islington, but I do not need to. I just need to talk about present circumstances. Therefore, it is of great importance to me that I have the opportunity to serve on the Select Committee that has produced this report. For the majority of my constituents, the increase in the supply of rented housing is of vital importance. I have not yet bent the ear of my right hon. Friend the Minister about affordable housing in the Islington context, but I warn her that I will. In Islington, it is simply not affordable to buy, nor is it affordable to part-buy. Hybrid forms of key worker housing may work in Darlington and in other parts of Britain, but, in the Islington context, house prices are so high that buying part of a flat and renting the rest is unaffordable, particularly for a family that needs three bedrooms. The price is simply too high. I had one case of a firefighter and his wife, a nurse, who was training to be a midwife, with had three children. They lived on the Finsbury estate in a two-bedroomed flat and were overcrowded, so they wanted to go for key worker housing or part-ownership. My senior caseworker and I spent a great deal of time trying to find some alternative means for them to stay in Islington, whether through part-ownership, key worker housing or anything else. We spent many months doing that and we looked at all the different solutions, but nothing was affordable within their pay range. The only thing for them to do, as we were advised, was to apply for part-ownership out east, which they would be able to do when the woman finally qualified as a midwife. I cannot even remember where the place was, but it was somewhere east of Tower Hamlets; I am afraid I get a little foggy once we get to the other side of town. That was the only accommodation that would be affordable for them as a family. The point is that key worker accommodation may be affordable if people only want a one-bedroomed flat. A new teacher trying to get key worker accommodation in Islington may be able to buy part of a one-bedroomed flat, but that is not possible for a key worker with a family. That is our problem. That is why inner London is lobbying for social rented housing; nothing else works for us. The difficulty is that, within the Islington context, a two-bedroomed flat in social rented housing might cost some £75. So of course some of my constituents can move into private rented accommodation—indeed, such private accommodation has become increasingly available, not least because housing benefit will pay up to £300 a week. However, the private sector is charging £300 a week for rented accommodation and the rent in the social rented sector costs £75 a week and the Government are paying for them both. This is wrong and we have to find a solution to it. One would hope that, with the credit crunch, perhaps the poorer half of Islington might benefit at last, in that land prices will go down and many builders will be out of work and, when all else fails—when the markets fail and businesses fail—in the end, all that we have is government. In those circumstances, perhaps the Government will be able to step in and, perhaps, having had 10 years of boom in the private sector and with a downturn in the market, now might be the public sector's chance, and the chance for the poorer half of my constituency to get some new accommodation. If that is so, those girls who are stuck with their little sisters might, at some time, get a chance to move somewhere else. Unfortunately, it is never as simple as it looks. The more I look, the more I realise that this difficulty has to be managed carefully. One of the most important sources of new build is housing associations. I understand that, in the early 1990s, grant rates for housing associations to build were at 70 per cent. That grant rate has now gone down to about 40 per cent. The difficulty is that, in those circumstances, that is not now a viable business proposition for housing associations, without cross-subsidies from other sources, including, as I understand it, building other flats and selling off parts of a development or selling off part-ownership and, therefore, being able to subsidise developments. Every new home being built by housing associations is subsidised, I am told, to the tune of £25,000 a flat. When it comes to the larger homes that my constituents so desperately need—the three-bedroomed plus homes—the price is even greater and the problem then is that, if housing associations are asked to deliver a certain number of units, it is often far too easy for the larger units to be overlooked. If one four-bedroomed flat is provided, it provides accommodation not just for one family, but for the family below in the chain: so a family may move out of a two-bedroomed flat into a four-bedroomed flat, freeing up the two-bed one; then the two-bed is freed up, so the family from the one-bed can move into the two-bed; then the girl with her baby in a bedsit can move into the one-bed; and so it goes on. Building larger accommodation means providing accommodation all the way down the chain. That is why it is so important that, in terms of policy, we emphasise and prioritise the building of larger flats to give families a chance. The difficulty is that the cross-subsidisation that the housing associations have been getting from selling off other properties is now drying up because of the credit crunch. I am informed that at the moment the housing associations have a debt of some £51 billion and it is anticipated that they will increase that borrowing by another £12 billion to deliver the Government's affordable housing targets. Unless this is managed carefully, the sector's financial health could be a cause of great concern. Many things can be done to assist housing associations. We have to use more public land and we have to stop the selling off of public land to the highest bidder. We have to begin with a policy whereby if public land has to be sold, it should not be sold to the highest bidder but should be sold for the greatest public good. That principle could be established. Moorfields school in my constituency is a large plot of land that stands next to Braithewaite house, a successful block of flats used by families, on one side of the road, while round the back a new development at Old street is potentially coming. That development is to be a massive great tower block largely comprising luxury flats: the 50 per cent. rule does not seem to apply to Islington council. That large plot of land in between those sites could be used for social rented housing and for some of the 13,000 families desperately waiting for housing in Islington. I have been mentioning 13,000 families since I was elected. I was surprised that so few families were being added to the list until families came to see me—and I know they go to see my hon. Friend the hon. Member for Islington, North—and complained that it is almost impossible to get on to Islington's waiting list these days. That is becoming such an increasing embarrassment, because my hon. Friend and I, and many other colleagues, are making a huge fuss about this large number of families on the waiting list for housing within Islington, with nothing being done about it, while the local authority is selling off Moorfields school, for example. The local authority is also selling off a site in Elthorne street that was owned by the council; it was a factory and then became a site for many little businesses and local employers. The council sold it off for £1 million and it has recently given planning permission for that property to be made into 17 luxury flats. That publicly owned building will now never provide any housing for those two girls and their daughters living with their little sisters. Now that public land has gone we will never get it back; we will never have the opportunity to house families there. We must do something about this and we must stop the sell-off of public land simply for the sake of keeping the council tax down. We must prioritise. We cannot just wring our hands and say, ““Oh, it's such a terrible problem; it's such an enormous problem. There's nothing we can do.”” We have to do something about this and we must ensure that there is somewhere for these 13,000 families to go. The first issue to consider is the sell-off of land. Public land should be prioritised and used. There may be opportunities available for us to work in partnership with housing associations to build more social rented housing, particularly given that the subsidy that the housing associations have been able to provide so far may be weakening with the increasing credit crunch. On other sources, housing associations could be allowed to buy land that may be owned privately but is not being built on, whether due to developers not having the wherewithal, means or imagination to build on such sites. The Government might be able imaginatively to change the rules so that, in such circumstances, housing associations could step in. Or they could step in where planning permission has been given but little progress has made on a site and, rather than wasting that land—given how many people are in desperate need of rented accommodation—allow housing associations to step in at that early stage. There are other opportunities available, when developments have begun and have gone a long way down the line. Again, it may be possible for housing associations to step in at that point, but there are two difficulties in relation to that. First, I am glad to learn that the environmental standards we expect for social rented housing are higher than for private rented housing. A housing association cannot simply buy flats that have been built for the private sector, because they may not be good enough—the environmental standards may not be good enough, and the rooms are often too small. We manage the size of social rented flats, but we do not manage the size of private rented flats. Those are complications, but with careful management, it should be possible to fix part of the problem, and ensure that the downturn in the market does not mean ever-increasing numbers of people in desperate need of social rented housing. It has been suggested that housing associations may be able to step into the gap that will be created by the credit crunch, but that alone would not be sufficient, even with the whole £20 billion that has been earmarked for the building of affordable housing in the next three years. It would only shore up one in 10 of new buys yearly. That is not enough on its own, but if we had a goal of ensuring that we relieve some of the pressure in the social rented sector by being imaginative and giving housing associations a greater lease, allowing them to do more than they can at the moment, and by taking a realistic look at the effect of the credit crunch, and accepting that they will not be able to subsidise things in the same way as they have in the past, we may be able to go some way towards assisting some of my more desperate constituents. In the past 10 years, only one in seven new developments in Islington has been social rented housing. That is not fair, and I hope that in the next 10 years we will be able to increase the amount of social rented housing in my constituency. Half of my constituents are largely my people, and when I go round social housing and talk to them, they look to me and Labour MPs such as me to provide a solution. I hope that with the downturn in the market we may be able to think laterally, and give them some help.