Following the housing bill debate

Published on by Perry Miller


Earlier this week, Members of Parliament gave the Housing & Planning Bill its Second Reading. For a piece of legislation with such an anodyne title, it certainly packs a punch.

English only

For starters, it’s the first ‘English-only’ (with a bit of Wales thrown in) Bill to reach the House of Commons, so we’ll need to get used to some different procedures: there will be a separate Grand Committee of English MPs voting through certified ‘English-only’ clauses and any amendments made by their Lordships would be subject to ‘double majority’ approval by all MPs and by English (or English & Welsh) MPs.  Of course, that didn’t stop two SNP MPs from speaking at Second Reading – while no one from Wales turned up. We’ll get used to it.

But arcane Parliamentary procedure aside, members were working themselves up into more of a lather about what the Bill can hope to achieve. While there seemed to be broad cross-party agreement that England is in the midst of a housing crisis, who was to blame and what should be done about it polarised the parties.

Polarised Opinion

To backbench cheers, Brandon Lewis MP (Con, Great Yarmouth), Minister of State for Housing & Planning, closed the debate saying that the Bill would ‘change the way we think about our homes and the homes of our families. No longer will people be left behind, believing that a home to own is a dream for another generation…we are a Government of opportunity…empowering the ‘generation rent’ of today to become the ‘generation buy’ of tomorrow.

By contrast, John Healey MP (Lab, Wentworth & Dearne), Labour’s Shadow Minister, claimed that, with a total of 32 new housing and planning powers for the centre, ‘this legislation signals the end of localism’. With reference to the requirement for local authorities to sell off their ‘high value’ properties, he noted that it was a power for the Chancellor to impose an annual levy ‘like some pre-Magna Carta monarch running short of cash for his exploits. There is no prospect and no plan for the proper replacement of these homes…This is unworkable and we will oppose it.’

Key Issues

The Bill weaves together a number of disparate strands of policy from the introduction of starter homes to help for self-build to action against rogue landlords, while also making provisions to enable the Right to Buy for tenants of Housing Associations (although the policy itself remains ‘voluntary’ for HAs and is therefore not on the face of the Bill).

But the debate in the House, like that outside, focused almost entirely on three key elements: starter homes, the Right to Buy for HA tenants (and how it will be funded), and further reforms to the planning regime – which are either ‘to ensure that councils and housebuilders no longer grapple with a planning system that is too slow and does not deliver for local communities’ (Brandon Lewis MP) or ‘will take power away from our local communities, while also removing vital checks on the quality and sustainability of development’ (Helen Hayes MP, Lab, Dulwich & West Norwood).

Starter Homes

Starter Homes are the Government’s new flagship programme for extending home ownership. The initiative started out confined to brownfield exception sites, unallocated and deemed unsuitable for housing, with the expectation of 100,000 homes to be delivered over five years. However, post-election, that figure has now doubled to 200,000 homes and the Bill makes provision for it to apply on every site ‘of a reasonable size’ brought forward for housing. Indeed, local authorities will be under a duty to promote starter homes in their Local Plans.

Labour MPs were scathing – ‘non-starter homes’ (coined by John Healey MP) will not be subject to S106/CIL requirements (so no accompanying infrastructure – a frequent community complaint) and are increasingly being lined up as an alternative to affordable housing. As Clive Betts MP, (Lab, Sheffield South East) Chair of the Communities & Local Government Select Committee, noted: ‘Every starter home will be built in place of the affordable home that would otherwise be built under the current S106 arrangements. In the last 10 years, nearly a quarter of a million homes have been built for housing associations as a result of S106 agreements, but no more will be built during this Parliament.’

Conservative MPs took an altogether more optimistic view – after all, in polling 86% of people say that if they had a free choice they would choose to buy their own home. But for some, mainly those with constituencies in London and other hotspots, there is clearly a nagging worry that the upper price limit of £450,000 (for starter homes in London) is unattainable for many who would still need to stump up a deposit of £98,000. Dawn Butler (Lab, Brent Central) added that £450,000 is 20 times the average salary in her Brent consituency. Nick Hurd (Con, Ruislip, Northwood & Pinner) worried that the figure would inevitably be interpreted by developers as a price guide.

Shelter has calculated that across the country a person would need an income of £50,000 and a deposit of £40,000 to afford a starter home. In London it rises to an income of £77,000 and a deposit of £98,000. Starter homes, it claims, will help only ‘those already earning high salaries who should be able to afford a home on the open market.’

Despite Ministers insisting that the figure is a cap and that they expect prices to be much lower, there remains considerable doubt about this policy. Starter homes ought to be attractive to developers (after all, they promise a much better return than affordable properties) but sites have been deemed unsuitable for housing for good reason: they can be heavily contaminated with expensive clean-up costs (more than an exemption from S106 can cover) or are in less salubrious areas with no existing infrastructure (prices will be depressed). And lenders have yet to commit to the initiative. How will they value homes that benefit from a cash bonus in year five?  

Right to Buy

Right to Buy for tenants of Housing Associations has proven no less contentious an issue. The arguments have already been well rehearsed in the media and Members took every opportunity to ram home their argument. Whether you believe it to be a liberating measure bringing the same freedoms to HA tenants that council tenants have enjoyed for years and leading to additional homes being built – less ‘Right to Buy’ and more ‘Sell to Build’ as Nick Hurd MP coined it – or a retrograde step that will see social housing removed from swathes of the capital with a funding scheme verging on the plain daft, your point of view was fully represented.

Interestingly, in a mini-hustings for next year’s London mayoral election, the two leading candidates,  Zac Goldsmith MP (Con, Richmond Park) and Sadiq Khan MP (Lab, Tooting), both took the policy apart. The former announced that he would be introducing an amendment – which he claimed would have the full support of all the capital’s Conservative MPs – to introduce a binding guarantee that London would see ‘a net gain in affordable housing as a consequence of this policy, a guarantee that London will see, in addition to the replaced housing association houses, at least two low-cost homes built for every single high-value home sold.’ This is an attempt to stop a flow of money out of the capital.

Sadiq Khan MP meanwhile quoted the Leader of Westminster City Council, Councillor Philippa Roe, who had said that the Right to Buy would wipe out swathes of social housing. He pointed out that in London, since 2012, only one in seven council homes sold had been replaced and said that the capital’s social mix was being damaged, accelerating the exodus of poorer people out of the city. He added that he would be ‘fighting to retain the money from housing association and council property sales in London for Londoners. There must also be provision for like-for-like replacements in the same areas as where the properties are sold.’

This debate will rumble on, as both sides marshall their support. What seems to be emerging, however, is that the National Housing Federation, far from securing a brilliant deal for its members to avoid compulsory Right to Buy, has sold its members a pup. First, the Office for National Statistics has now reclassified HAs as public sector organisations along with their £60 billion debt (which they had been keen to avoid), although Ministers have pledged to deregulate and return them to the private sector. Second, rumours are emerging that as many as 30 Conservative MPs were ready to defy their whip and vote against compulsory proposals if they had appeared in the Bill. Third, as a result, relations between HAs and local authorities are at an all-time low, as the latter feel they have been hung out to dry, faced with the threat of a sell-off of the top third of their most valuable council homes. Fourth, no one yet knows what will happen to HAs that either voted against the deal or didn’t vote at all: will they be able to refuse the Right to Buy?

Also unanswered is how the proceeds from the sale of a high-value council home can fund a) residual debt on the property sold b) the discount repayable to the HA c) the new £1 billion brownfield fund and d) the building of a new home. Fingers crossed

Planning reform

Finally, we come to compulsory Local Plans and the proposed planning permission ‘in principle’ (PPIP) for development not just on sites listed in the new brownfield land registers, but on all allocated sites within Development Plan Documents. This time it was the Conservatives’ turn to be nervous. As Nick Herbert (Con, Arundel) noted: ‘We started off, rightly, with the Localism Bill… but more recent Bills have sought to take more powers to the centre as a means of driving through house building. That approach will not work, any more than it worked under the previous Government….Kindly Dr Jekyll rightly comes to the House to say that regional spatial strategies are to be scrapped, but at night the Treasury doors are unlocked and Mr Hyde emerges.’

PPIP should act as real boost to housebuilders, seeking certainty and an expedited process to deliver new homes.  However, the inclusion of land allocated in DPDs and Neighbourhood Plans goes some way beyond the original plan. Councils’ roles are to be restricted to agreeing technical details, submitted later; these are as yet undefined but will be consulted on in due course.

All in all, a good debate with contributions from no less than 48 backbenchers. There is clearly scope for amendment as the Bill progresses, not least on the sale of high-value council properties when Conservative-controlled London councils, the Conservative mayoral candidate and the Conservative-run Local Government Association will likely line up to oppose the Government.



Perry Miller

Perry Miller about the author…

Perry’s career has been defined by his involvement in politics and public affairs. After early years spent working in the Conservative Research Department and as a Special Adviser in the Major government of the early nineties, he joined the UK’s first, and arguably foremost, Westminster lobbying agency where he advised a range of blue-chip clients.

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