My Lords, I shall speak in support of Amendment 242 in the name of the noble Lord, Lord Stunell. I do so having consulted the Bishop of Chelmsford, who leads for the Church of England on housing but is unable to be here today. It is clear, I think, that we need to rethink what genuinely affordable housing is and how an adequate supply can be delivered. In London, the south-east and many other areas across the country, the current affordable housing for rent definition of 20% below market rates makes little difference to those on a median income, let alone those in most need. Without redefinition, we will continue to work under the illusion that homes classed as affordable are helping to solve the housing affordability crisis, when for the most part they are not.
Of course, we need a multifaceted approach to solve the lack of affordable homes. I was interested to learn from the Bishop of Chelmsford that Vicky Ford MP has been addressing this in relation to Chelmsford. During her 10-minute rule Bill debate on 22 February, she spoke to the shortage of affordable housing we
face locally and nationally. Her Affordable Housing (Conversion of Commercial Property) Bill would apply affordable housing obligations to conversions of commercial property to residential occupancy. The Bill is due its Second Reading in the Commons on 26 May, and we certainly hope that it will make some progress.
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Today, I urge the Government to look favourably on Amendment 242, which seeks a new definition of affordable homes based on the income of the purchaser or renter and not the open market price of the property. The amendment’s three-pronged approach is, in my view, an effective one. In linking a calculation of affordability to the local housing allowance for renters, it agrees that the Government’s own calculation in relation to housing benefit works for a particular local housing market and can play a part in bringing more affordable accommodation. On this point, I briefly urge the Government to unfreeze LHA from April 2020 levels to truly reflect the increase in rents over the past three years.
Likewise, it is welcome that the amendment seeks to ensure that
“annual mortgage costs … do not exceed 35% of the adult median income of employed people”.
This is a good proxy for ensuring affordability across England in a way that reduces exclusion. The amendment’s provisions on shared ownership flow from the same sound formulas already set out. It is clear that we need an immediate short, medium and long-term solution to the affordable housing crisis we face. Sticking plaster approaches of X number of homes built or not built in a year will not address this. This amendment would be a very helpful step in the right direction towards defining what truly affordable housing should look like.