This briefing is intended to update Northern Housing Consortium (NHC) members on the progress of the Housing and Planning Bill 2015 (henceforth ‘the Bill’), following the completion of the House of Commons Second Reading stage on Monday 2 November 2015.
Introducing the Bill at Second Reading, Greg Clark MP, said “every Parliament that is elected has a responsibility to the future and to do all that it can to ensure that the lives of the next generation are better than those of past generations. Nowhere is that more important than in ensuring that the next generation have the homes they need.”
Much of the Government’s Bill sets out the commitments made in the Conservative Party manifesto notably the pay to stay measure, the voluntary right to buy extension to housing association tenants, Starter Homes, new regulations in the private rented sector and a rogue landlords database; measures around the sale of vacant high value local authority housing and changes to the planning system in England.
Second Reading is an opportunity for MPs to discuss the general principles of the Bill. No amendments can be made at this point but MPs are free to ask questions of the Government and raise any concerns they may have about the detail of the legislation.
First Reading – where the Bill is introduced either in the House of Commons or the House of Lords, but no debate takes place
Second Reading – where the general principles of the Bill are discussed and debated.
Committee Stage – where detailed, line by line examination of the Bill takes place and amendments can be introduced and voted on, usually conducted by a small group of MPs or Lords that are representative of the political make-up of either the House of Lords or the House of Commons, or by a Committee of the Whole House
Report Stage – where a debate is conducted on the floor of either the House of Commons or House of Lords with any MP or Lord allowed contributing to proceedings. Report Stage allows the changes introduced at Committee Stage (amendments) to be reported to the whole House and gives all MPs or Lords the chance to introduce their own amendments to the Bill.
Third Reading – a short debate and final vote on the Bill before it proceeds to either the House of Lords (if the Bill is introduced in the House of Commons) or the House of Commons (if the Bill in introduced in the House of Lords) where the process then begins again in the respective House. Amendments can be introduced and they are often amendments that reflect debates had at Report Stage.
This briefing does not attempt to cover every clause and amendment in the Bill, rather it is intended as a summary of the main clauses and amendments we feel will be of interest to the NHC membership.
There were many heated exchanges throughout the course of the Bill but some areas of equanimity emerged particularly around new regulations on the private rented sector. Greg Clark opened the debate noting the past success of the Government “We built 260,000 affordable homes, nearly a third of them in London, and in the next five years we will build 275,000 more, the most for 20 years. We have helped hundreds of thousands of people achieve their dream of home ownership, with Government schemes such as Help to Buy doubling the number of first-time buyers in the previous Parliament.”
Speaking on the measures regarding the extension of the right to buy he noted that “home ownership is an aspiration for 86% of people in this country. The Bill will make it possible, through the agreement that the housing association sector has made with the Government, to extend the right to buy to all 1.3 million tenants who currently do not have the right to become homeowners.” On planning changes, he said that “since we introduced the national planning policy framework, the number of new homes planned for locally has increased by 23%, and 1,600 neighbourhood plans are in production or have been adopted. It is right to continue in that direction of reform, which is why the Bill takes steps to simplify and speed up the process of adopting neighbourhood plans and giving them earlier force.”
Turning his remarks to changes to the planning system, he said “that our generation has taken for granted has been slipping out of reach for many younger people. Planning policy has long recognised the need for local councils to provide for affordable housing as part of their plans. Paragraph 50 of the national planning policy framework sets out this requirement. Housing for affordable rent will always be important, but until recently public policy has had too little to say to those who would like to own their own home yet struggle to do so.” This reflects the Government’s plans to refocus CLG’s budget toward low cost home ownership.
Continuing his remarks on changes to the planning system, he said “the Bill takes steps to simplify and speed up the process of adopting neighbourhood plans and giving them earlier force. It helps councils to galvanise development in their areas, whether through improvements in the compulsory purchase system or through the establishment of development corporations”.
Commenting on new measures for regulation of private sector landlords, he said “the Bill will do something that many tenants and landlords have been calling for for many years. It will take action to crack down on the rogue landlords who can make tenants’ lives a misery and who blacken the reputation of the great majority of responsible landlords. We will establish a database of rogue landlords and letting agents to help councils to tackle problems in their area, to extend fines for serious breaches of the law and to ban prolific offenders who put the lives of their tenants in danger.”
In his remarks, John Healey, the Shadow Housing and Planning Minister, said that “there are some parts of the Bill that we welcome, but I have to say that they are few and far between. We welcome steps to control the worst private landlords, to help young people get their first foot in the housing market, and to speed up compulsory purchase.” He continued however, that if you are a young person or a family earning an ordinary income and trying to get on, then this is a bad Bill. If you want to buy your own home, then these so-called starter homes are a non-starter for you, and they are unaffordable to most people on average incomes. If you are a working family on modest wages in a council or housing association home, then you face your rent being hiked as a result of the Bill.”
Speaking about the changes faced by housing associations, Mr Healey said “just three years ago, councils and housing associations were given a 10-year guarantee on the rents that would be in place for them and the properties they manage, so that they could plan their businesses’ development and maintenance. How can they now trust this Secretary of State and his Ministers to keep their word in the future?” He reiterated the point that “the deal does not reflect the majority, or certainly a large number, of associations, which did not respond or were not consulted”. He continued that “the inescapable background to this Bill is that that record is one of five years of failure on every front. The Secretary of State devoted most of his speech to home ownership, but that fell each and every year in the last Parliament—each and every year since 2010. It is at its lowest level for a generation. The number of home-owning households reduced by 200,000 under that Government, whereas it increased by more than 1 million under the Labour Government before them.
Turning to the Bill’s proposal to use the funds from the sale of high value council properties to refund housing associations for right to buy discounts, Healey noted that “the Chartered Institute of Housing, the independent professional experts, says that this fire sale of affordable council homes to fund the extension of the right to buy could mean the loss of 195,000 genuinely affordable social rented homes in the next five years.” Closing his remarks, he suggested “The Bill is driven by the politics of the Conservative party, not the housing needs of the country, and it is not really his Bill. Like the cut to tax credits, this Bill is the Chancellor’s work, with his political fingerprints all over it.”
Starter Homes and Affordable Housing
In his remarks, Clive Betts, the Chair of the CLG Select Committee noted that he agreed with the Government’s plans for fixed penalty notices and rent repayment orders for private landlords were needed. He noted, however, that the Bill was very centralist and against the grain of the Government’s drive for devolution. On affordable housing, he said his “great worry about the Bill is that if we are to achieve the 200,000 homes a year that the Government aspire to building—or the 250,000-plus homes that we really need—it can be done only through a serious long-term plan to build social housing for rent in this country.” He added that “what concerns me is that measures in the Bill will lead to the building of fewer houses at rents that people can afford, and that by the end of the current Parliament in 2020 there will be fewer homes to rent than there were in 2015.”
Tim Farron, the Leader of the Liberal Democrats and MP for Westmorland and Lonsdale, noted in his opening remarks that “as a Member of Parliament for a constituency in the north of England, where the average house price is 12 times the average income, I would say that this is clearly a national problem. Of course it varies in different areas, but we have a national emergency, even, in housing. Millions of people suffer daily from poor housing, or from the uncertainty of not knowing where they will be living from one month to the next … across the country, we have soaring house prices several times higher than a median earner can afford, and a rental sector in which many people spend over half their income on rent.”
In stringent remarks, he said the Bill “is disappointing and unambitious at best, and brutal and counter-productive at worst. It does not make a significant attempt to tackle the housing crisis or show any signs of being written by anyone who even understands that crisis. Instead, it is an all-out assault on social and affordable housing at the very time when those homes are most needed” He added that the Bill instead needed to plan for 300,000 homes and to set ambitious targets for building properties of all type and tenure.
Angela Rayner, Labour MP for Ashton-under-Lyne, noted that “one of my concerns is that the current plans to deliver starter homes will be at the expense of affordable and shared-ownership properties that are vital in meeting housing needs in my constituency. Shelter has illustrated that in many areas, including mine, starter homes will not be affordable to low and middle-income households.” She suggested that “the Chancellor has created a perfect storm in a dysfunctional housing market. The combination of the ill-thought-through right-to-buy extension along with the unfunded rent freeze has led to New Charter, a major social housing provider in my constituency, announcing the loss of more than 150 jobs. Last Friday, I met Ian Monroe, chief executive of New Charter, and he informed me that it has had drastically to scale back its plans to build an additional 2,000 desperately needed houses locally. It was New Charter’s intention to build the 2,000 properties over the next four-year period, but the number has now been reduced to just 600.”
Right to Buy
In his remarks on the extension of the right to buy, Clive Betts MP said that “it is possible that some housing associations, if they chose—and it will be a choice—could replace properties on a like-for-like basis in their localities … but no information that I have seen, from Ministers or from anyone else, has persuaded me that local authorities have any chance of replacing the properties that they will have to sell off on a like-for-like basis in their localities.” This reflected a key concern throughout the debate that local authorities will be unable to replace properties like-for-like.
Tim Farron, in his speech, expressed deep concerns that the Bill “will cause the break-up of communities as homes sold off under right to buy and the forced sale of council homes are lost to local people. Its provisions will significantly reduce the number of social and affordable homes, leading in turn to a rise in homelessness and adding to the already huge waiting lists totalling 1.6 million people. With more people in expensive temporary accommodation or in the private rented sector because there are not enough affordable homes, there will be extra costs for the housing benefit bill.”
Sue Hayman MP, Labour MP for Workington, highlighted that “Housing Associations have been told they will receive full compensation through a grant to make up the difference on any financial loss arising from right to buy, but it is not clear whether any conditions will be attached to the grant or how free they will be to spend the grant in the way they think best meets local need.” She continued “much of my constituency is rural, which is why I am interested in the rural aspect, and includes part of the Lake District national park, so I am especially concerned that the Bill does not take into account the particular challenges of delivering and retaining a mixed balance of tenures in rural areas.” She expressed concerns that “the cost of housing inside the national park is far higher than outside it, and local people often struggle to compete with the purchasing power of people from wealthier areas looking to buy holiday homes and second homes”
Sue Hayman, Labour MP for Workington, noted in her remarks that it was “problematic that the reforms in the Bill focus on promoting homeownership through starter homes at the expense of delivering affordable social housing for rent. This will have a negative impact on the provision of affordable social homes in rural areas, and it could also have the unintended consequence of wiping out affordable housing in areas such as the national parks”. Concluding her remarks, she said it was her belief that “replacing houses should mean replacing the houses sold with similar properties in the same communities at similar rents”.
Planning
Alec Shelbrooke, the Conservative MP for Elmet and Rothwell, focused his remarks on the planning system noting his own concerns about developers building on greenfield land instead of brownfield first. He noted the vagaries of the planning system, highlighting that “most constituents in a rural area, if challenged to look at a meadow and say whether it is green belt or greenfield, would not be able to do so—most people do not know the difference” He continued “people will then see swathes of land in the city centre that are not being developed because the council is not considering that. It is time for the council to get on with it, to engage with local people, to look at things strategically, to say “There’s a brownfield register and we’re going to use that land.” They need to get on with building the number of houses we need rather than an over-inflated number that means that the developer will always be able to have the choice cuts and build the most expensive and profitable houses.
Speaking on the issue of planning and building new properties in rural and areas of natural beauty, Sue Hayman noted “the Bill needs to recognise the planning difficulties of building new properties within a national park. It can take a long time to identify the land and get a planning agreement to build within national park authorities because the process is so much more complex, and because it is so much easier to build outside the national park, people do not apply to build within it. If we are not careful, affordable housing within these communities could disappear and those communities will change for ever.”
Welcoming the changes to the planning system contained within the Bill, Seema Kennedy, Conservative MP for South Ribble, said “before I came to this place, I practised as a property lawyer for 15 years, and then in my family’s property business, and I have seen at first-hand the delays that can occur because of the logjams put into the system through planning policies that are not implemented properly” adding that “I am in no way advocating a “no holds barred, build anywhere” planning approach. The Bill’s provisions on planning strike a good balance between realising that we must have local planning, even down to neighbourhood level, and recognising that there are cases where central Government need to act to break logjams in the planning system” She concluded “I particularly welcome the requirement for local planning authorities to have a statutory register of land, which should make it easier for developers and builders to identify brownfield sites and also give local people a sense of ownership, and reassurance that while homes are being built locally their beautiful green spaces are being protected.”
Kevin Hollinrake, Conservative MP for Thirsk and Malton, noted in his remarks the need to incentivise small and medium-sized house builders. Speaking about this he noted that “small and medium-sized house builders used to build 100,000 homes a year in this country; now they build 18,000 homes” adding that “some 62% of small and medium-sized house builders say finance is their principal concern in their ambition to build more homes.” He highlighted that many banks have been lending a lot less to small and medium-sized developers and he noted that the Government have tried to help, through the Housing Growth Partnership and the Builders Finance Fund. He remarked that “we need to go further, perhaps by establishing a help to build fund to help SMEs to get back into the market?”
Infrastructure
Chris Green, Conservative MP for Bolton West, made several salient points regarding infrastructure and housing. He noted that more often than not “my constituents have highlighted the problems associated with planning, such as the increasing pressure on local services, amenities and transport infrastructure.” He highlighted that “as the demand for housing increases, we must respond to the challenges that additional housing brings, particularly the challenge faced by our transport infrastructure” noting that increasingly, his constituency is part of the commuter belt for Manchester.
He welcomed the proposals contained within clause 103 of the Bill which requires local planning authorities to compile a register of land adding that “I believe that there should be a register of brownfield sites, whether they are suitable or unsuitable for development, to speed up the delivery of housing, while protecting our green spaces.”
An interesting point in the debate came from Richard Bacon, Conservative MP for South Norfolk who said “one might be forgiven for thinking that this is a debate about London, and no one denies that there are acute and special problems in London, but of the 65 million people who live in the United Kingdom, 57 million do not live in London and they also need to have their voice heard in this debate.”
In his remarks, Kevin Hollinrake, said “I am delighted to speak in support of the Bill, which makes housing a key priority for this Government” noting that, for him, “housing is infrastructure. Homes are the physical structures we need for the operation of our society and our economy”. He continued “I wish to take issue with the shadow Secretary of State’s numbers. He seemed to think that there had been a decline in the numbers being built. There has actually been a 58% increase in the number of new starts annually since 2008, and starts is the key measure. I also welcome the Minister’s commitment to deliver 1 million homes by 2020, which will have a huge direct and indirect economic benefit. There is a still greater prize: 25% of all people who live in poverty do so because of housing costs and a third of those in poverty live in the private rented sector. We have an opportunity to lift 3 million people out of poverty and give them the pride and security of owning or renting a home of their own.”
The next stage of the Bill is the Bill Committee Stage. This is a process whereby the Government and a select group of MPs representing the balance of parties in the House of Commons can table amendments to the Bill. The Committee can also summon representatives of various third sector organisations or other bodies with an interest in the Bill to hear evidence from them. The Committee Stage for the Housing and Planning Bill will commence on Monday 9 and Tuesday 10 November 2015 with oral evidence.
If you have any questions or feedback about this briefing, or would like to work with NHC on the Housing and Planning Bill 2015 as it progresses through the House of Commons, please email callum.smith@northern-consortium.org.uk or call 0191 566 1029.