Mid Sussex District Council is keen to build homes, and many people in my constituency work diligently to produce neighbourhood plans, only for them then to be undermined by ruthless behaviour by some rogue developers. Does my right hon. Friend agree that if we are to deliver the imaginative vision he has outlined to the House today, we need to curb that sort of behaviour?
The Secretary of State for Communities and Local Government; Sajid Javid MP
My right hon. Friend highlights the importance of neighbourhood plans. I know that he is aware of the current Bill going through Parliament, the Neighbourhood Planning Bill, which is strengthening that part of the plan-making process, but I think he will also be pleased to see in this White Paper the further steps that we are taking to achieve precisely what he wants: local communities being taken more seriously through their neighbourhood plans. [col 235]
Statement by The Secretary of State for Communities and Local Government; Sajid Javid MP on the Housing White Paper
House of Commons
Tuesday, 7th February, 2017
With permission, Mr Speaker, I would like to make a statement on the Government’s housing White Paper “Fixing Our Broken Housing Market”, copies of which I have placed in the Libraries of both Houses. I had hoped, Mr Speaker, that this housing White Paper would dominate the headlines this morning, but it seems that someone else has beaten me to it. [Laughter.]
Our housing market is broken. Since 1970, house price inflation in Britain has far outstripped that in the rest of the OECD. The idea of owning or renting a safe, secure place of one’s own has, for many, now become a distant dream. Over the past seven years the Government have done much to help. We have taken action on both supply and demand, and the results have been positive. Last year saw a record number of planning permissions granted, and the highest level of housing completions since the recession. Between 1997 and 2010, the ratio of average house price to average income more than doubled, from 3.5 to 7. In the five years to 2015, however, it crept up to just over 7.5—just a little but still heading in the wrong direction.
Behind the statistics are millions of ordinary working people. I am talking about the first-time buyer who is saving hard but will not have enough for a deposit for almost a quarter of a century, or the couple in the private rented sector handing half of their combined income straight to their landlord. The symptoms of this broken market are being felt by people in every community, and it is one of the biggest barriers to social progress that this country faces, but its root cause is simple: for far too long, we have not built enough houses. Relative to population size, Britain has had western Europe’s lowest rate of house building for three decades. The situation reached its nadir under the last Labour Government, when, in one year, work began on just 95,000 homes—the lowest peacetime level since the 1920s.
Thanks to the concerted effort of central and local government, last year 190,000 new homes were completed, but it is still not enough. To meet demand, we have to deliver between 225,000 and 275,000 homes every year. In short, we have to build more of the right houses in the right places, and we have to start right now. Today’s White Paper sets out how we will go about doing just that. House building does not just happen. Meeting the unique needs of different people and different places requires a co-ordinated effort across the public and private sectors. There is no magic bullet; rather, we need action on many fronts simultaneously.
First, we need to plan properly so that we can get the right homes built in the right places. To make this happen, we will introduce a new way of assessing housing need. Many councils work tirelessly to engage their communities on the number, design and mix of new housing in their area, but some duck the difficult decisions and fail to produce plans that meet their housing need. It is important that all authorities play by the same rules. We need to have a proper conversation about housing need, and we need to ensure that every local area produces a realistic plan that it reviews at least every five years.
Once we know how many homes are needed we need sites on which to build them, so the White Paper contains measures to help identify appropriate sites for development—not simply empty spaces but useable, practical sites where new homes are actually required. I can reassure the House that this will not entail recklessly ripping up our countryside. In 2015, we promised the British people that the green belt was safe in our hands, and that is still the case. The White Paper does not remove any of its protections.
Government should not be in the business of land banking, however, so we will free up more public sector land more quickly. We will increase transparency around landownership, so that everyone knows if someone is unfairly sitting on a site that could be better used. Moreover, people need a say on the homes that are built in their area, so everywhere must have a plan in place and ensure that communities are comfortable with the design and appearance of new homes.
The second area of focus is all about speeding up the rate of build-out. At the moment, we are simply not building quickly enough. Whether that is caused by unacceptable land banking or slow construction, we will no longer tolerate such unjustified delays. We will speed up and simplify the completion notice process; we will make the planning system more open and accessible; we will improve the co-ordination of public investment in infrastructure and support timely connections to utilities; and we will tackle unnecessary delays caused by everything from planning conditions to great crested newts.
We will give developers a lot of help to get building, and we will give local authorities the tools to hold developers to account if they fail to do so. Local authorities also have a vital role to play in getting homes built quickly, and I am therefore looking again at how they can use compulsory purchase powers. We will also introduce a new housing delivery test to hold them to account for house building across their local area.
Finally, the White Paper explains how we will diversify the housing market. At present, around 60% of new homes are built by just 10 companies. Small independent builders can find it almost impossible to enter the market. This lack of competition means a lack of innovation, which in turn leads to sluggish productivity growth, so we will make it easier for small and medium-sized builders to compete. We will support efficient, innovative and underused methods of construction such as off-site factory builds. We will also support housing associations to build more and explore options to encourage local authorities to build again, including through accelerated construction schemes on public sector land. We will encourage institutional investment in the private rented sector, and we will make life easier for custom builders who want to create their own home.
Together, these measures will make a significant and lasting difference to our housing supply. It will, however, take time, but ordinary working people need help right now. We have already promised to ban letting agents’ fees, and this White Paper goes further. We will improve safeguards in the private rented sector, do more to prevent homelessness and help households that are currently priced out of the market. We will tackle the scourge of unfair leasehold terms, which are too often forced on hard-pressed homebuyers. We will work with the rental sector to promote three-year tenancy agreements, giving families the security that they need to put down their roots in a community.
In the past few years, we have seen almost 300,000 affordable home units built in England. We have seen housing starts increase sharply, and we have seen more people getting on the property ladder, thanks to schemes such as Help to Buy. We now need to go further—much further—and meet our obligation to build many more houses of the type that people want to live in in the places where people want to live. That is exactly what this White Paper delivers. It will help the tenants of today who are facing rising rents, unfair fees and insecure tenancies; it will help the homeowners of tomorrow to get more of the right homes built in the right places; and it will help our children and our children’s children by halting decades of decline and fixing our broken housing market. It is a bold, radical vision for housing in this country, and I commend it to the House.
Tuesday 7 February 2017
No 107. Cols 229-231
To download the Housing White Paper please click on the link below.