My Lords, the Committee will now deploy its energies to the part of the Bill that deals with the extension of the right to buy. Clause 62 is
prefaced by two lines identifying Part 4, “Social housing in England”, and Chapter 1, “Implementing the right to buy on a voluntary basis”. The effect of this part of the Bill will of course substantially undermine the provision of social housing in England and the voluntary basis on which the provision purports to rest will, I predict, prove temporary and will not survive the re-election of this Government, should that misfortune occur.
The radical changes to the provision of social housing by “private registered providers”, as the Bill terms the housing associations and kindred bodies which have played and are still playing a hugely important role in the provision of decent affordable homes for millions of people, will result, as has happened already in the case of council housing, in a substantial reduction of affordable homes to rent and a substantial increase in the proportion of private rented properties let at higher rents. One of the perverse effects over time is likely to be an increase in the amount of housing benefit paid to private landlords. The anodyne wording of the 53 lines that encompass this radical change belie their importance and their impact, as do the 14 lines of the so-called Explanatory Notes. It is a measure of the importance of the issue and of the concern it has aroused that it has stimulated the tabling of 16 amendments in this and the following groups.
Amendment 55 sets out a list of proposed exemptions from the provisions of Clause 62 which permit the Secretary of State, or at his direction the Homes and Communities Agency, the right to provide grants to fund the right to buy discounts. I would not normally read out such a list, but in this case the mere recital of the nine categories embodied in the amendment serves to reinforce the concern they have aroused. Unless they are excluded, the following will be subjected to the right to buy:
“supported housing for older people … supported housing units (including self-contained homes where floating support is provided for vulnerable people) … key worker housing (which includes self-contained flats subject to nomination agreements with third parties)”—
the latter, I interpolate, infringing on the interests of such third parties who would have no redress—
“units that form part of major regeneration schemes planned or already under way … rural settlements”—
about which I and others will have more to say both in relation to this group and the groups of amendments that follow—
“homes built for charitable purposes without government grant and homes provided through s.106 agreements … requiring stock to be kept as social housing in perpetuity”—
thereby interfering, I again interpolate, with freely negotiated arrangements unsupported by government funding—
“co-operative housing”—
completely undermining the ethos which led to its provision in the first place—
“ALMOS (arms length management organisations) and—
ironically—
“alms houses”.
Amendment 59B, also tabled in my name and that of my noble friend Lord Kennedy, adds “tenant management organisations” to this list, and one or other of us has subscribed to Amendments 57B, 57D,
66D, 67A, 68D and 69B. Underlying our support for these amendments are the fundamental concerns which have repeatedly been expressed about this Bill both outside and inside this House, and from all parts of this House. These include worries about the impact on communities of a reduction in affordable rented homes, and huge uncertainties about the number, location, cost and quality of possible replacements. In particular, there is opposition to the application by diktat of a one-size-fits-all policy by central government, exemplified by the inclusion of rural areas in the right to buy provisions in the social housing sector, even if this is initially, but I suspect temporarily, left to individual providers to adopt.
I ask the noble Baroness the Minister to say which if any of the list of categories of social housing the amendments identify should not be excluded from the provisions of this part of the Bill, and in each case why. She will no doubt say that it will be up to individual housing associations providing homes within any of the categories to decide whether or not to allow tenants the right to buy, but she must know that an expectation will have been created among some tenants, and it is not too cynical to suggest, their families, which it will become increasingly difficult to resist, thus in addition paving the way to converting a voluntary scheme into a statutory one, as has of course been the case with council housing. Moreover, that possibility in itself is surely likely to have a chilling effect on the willingness of the sector to invest in the provision of new affordable social housing.
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One particular area of concern relates to the provision of housing for the elderly, where the double whammy of right to buy and the alternative impact of the proposal to sell high-value properties as they become vacant could significantly restrict access to appropriate properties such as bungalows. A Joseph Rowntree Foundation report states that one in five elderly people live in bungalows, with the proportion increasing as they reach the age of 75. Of course, not all of these are in council or social housing properties, but the foundation estimates that 25% of high-value sales would be bungalows, representing 9% of all the relevant housing. This could lead to the loss of 15,300 bungalows in the next five years—one in 15 of the relevant total in England. The foundation points out that replacement would be unlikely because of the larger site requirements and the cost of building single-storey properties. The policy and research manager of the foundation warned:
“The Housing Bill will reduce the number of affordable homes at a time of an acute housing crisis”,
and that we risk holding a “Great British bungalow sell-off”, which will,
“make things worse for elderly and disabled tenants who are trying to find suitable, affordable accommodation”.
Nowhere have concerns about the impact of right to buy been expressed more profoundly, in this House and well beyond it, than on rural areas. The Campaign to Protect Rural England, as might be expected, declared its opposition to the proposal, together with Hastoe Housing Association, about which we heard last Thursday, the Country Land and Business Association, the National Association of Local Councils, the Lincolnshire Rural
Housing Association, Exmoor National Park, the Rural Services Network and the National Parks association—none of which, as far as I know, are affiliated to the Labour Party. I half expected to see the entire cast of “The Archers” and “Downton Abbey” joining that. They specified concerns that rural affordable housing lost to the open market would not be replaced; that a portable discount alternative would not help rural areas; and, as we heard last Thursday from Members including the noble Duke, the Duke of Somerset, we are unlikely—if he will excuse the pun—to see more landowners offering to provide land for social housing if there is no guarantee that the homes built on it would remain available for letting at affordable rents and not be sold on as second homes or buy to let.
The CPRE and its partners in resisting crime point out that, under the agreement reached with the sector, one-for-one replacements need not be created in the locality where the right to buy is exercised, but could be anywhere. Moreover, the portable discount, seen as an alternative to buying the house one lives in and permitting it to be used to buy a different housing association property, does not minimise but merely relocates the damage. Affordable housing already accounts for only 8% of the stock in rural areas, compared with 20%—itself an inadequate proportion—elsewhere. These low levels of affordability, already exacerbated by lower average incomes in rural areas and by house prices higher than in many urban areas, foreshadow a dire future for rural communities.
The chief executive of Hastoe, England’s largest specialist rural housing association, states that the situation,
“makes a mockery of the Government’s plan to replace affordable homes to rent with ‘starter homes’ to buy—at nine times the median salary of rural workers”.
In her words, the right-to-buy deal,
“will mean that young workers on lower incomes are bound to see their chances of rural accommodation disappear; many of the houses sold to tenants will … be resold on the open market at prices far beyond the reach of the people they were designed for”.
The campaign of the CPRE and its partners has been endorsed by its president, the former Poet Laureate Sir Andrew Motion—perhaps an appropriate name for our discussions. He asserted, in blunt prose rather than verse, that if the countryside is to be prevented from turning into a “gentrified museum”—or as I would add, being given over to second homes or holiday lets—there must be a “full rural exemption”. He called for an exemption for,
“communities of under 3,000 inhabitants, as well as rural market towns”,
with a population of up to 10,000,
“where there is a significant need for affordable housing”.
I await the Minister’s reply to that call later this afternoon.
I made brief mention of starter homes, which we discussed at some considerable length last Thursday. Since then, some important information has come to light which I must draw to the attention of the Committee. The respected magazine Inside Housing has reported:
“Major lenders have warned government officials they will not support Starter Homes unless ministers agree to a major climbdown over the discount period.
An ‘impasse’ has been reached between a number of major lenders and the government over its plans to allow buyers to sell the flagship housing product at full market value after five years … This would allow buyers to cash in the original 20% discount, meaning they could make profits of £141,000 by selling an average home bought under the scheme after five years.
Large lenders have now reached a deadlock with government, as they fear this could distort market values and incentivise people to overpay. Most large lenders therefore want the 20% discount to be held in perpetuity, or for the period where the discount applies to a resale to be extended to 20 years. However, it is understood Department for Communities and Local Government … officials have so far rejected potential compromises, including a 15-year discount period with a taper after the first five. One lender said: ‘There is an impasse … no one has communicated an absolute red line, but if there is no compromise then some [lenders] will opt out of supporting the scheme.’
Another source close to the discussions said: ‘There has been an enormous amount of pressure brought to bear [on lenders]. If the government carries on like this, the scheme won’t work’. Stephen Teagle, managing director of affordable housing and regeneration at Galliford Try, who is part of the group helping to develop the policy, said there is ‘keen support’ across the sector to extend the discount to 10 years. He added: ‘That may be the amendment required to ensure we can all get on and start delivering the Starter Homes programme’.
The Housing and Planning Bill does not commit to the five-year period of discount, and it is understood Downing Street officials have privately hinted at a willingness to ‘listen’ on this point. As a result, lenders hope the government will extend the discount period via a forthcoming consultation on regulations. The government did not comment”.
I have to say that this is an extraordinary revelation. I cannot believe that the Minister was a party to these discussions. After all, she is only a Minister of the Crown, not a Downing Street official. Had she been aware of them, she would surely have made some reference to them last Thursday, if only to the extent of saying that the Government were in discussion with the lenders about the very issue this House spent hours debating. So what is the position? If the Minister is not in a position to tell us today—doubtless because she was not included in these discussions—I expect that she will agree to write to us accordingly.
Are the Government considering changes to the discount period or not? Will they be in a position to clarify the position by the time we get to Report? What options, if any, are they considering? Members of your Lordship’s House need to know before we start tabling amendments at Report. What answer do the Government make to the critical concern of lenders that the scheme, as presently drafted, could distort market values and incentivise people to overpay? Would this not also impact upon the rest of the housing market and drive sale prices on the existing stock?
There is a further extremely worrying issue raised by the report, namely the reference, yet again, to the possibility that the Government will extend the discount period via a forthcoming consultation on regulations. Since we will be spending a good deal of time debating rural concerns today, I hope I may be forgiven for suggesting that, in the absence of clarity about the Government’s intentions, we are, in effect, being invited to buy a pig in a poke, something which, on religious grounds alone, I am reluctant to accept.
The Government may have chosen not to comment on the Inside Housing report thus far. I believe that the House will wish the Minister to do so today, or, at the very least, before the end of Committee, and I invite her to confirm that she will do so. I beg to move.