Roy Kennedy on the battles that lie ahead to take the rougher and dafter edges off the Housing Bill
I still remember the excitement when my Dad received the letter from Southwark Council informing him that we had been allotted a council property, having been on the waiting list for many years. I was too young at the time to understand why my parents were so happy but realised later that it gave our family security and the ability to put down proper roots.
It was the end of the 1960's and Labour had been in government for nearly six years. There had been a massive social house building programme; ‘Rachman’ had entered the dictionary as a byword for the exploitation of tenants; and Crisis had been formed following the plight of people and homelessness highlighted by 'Cathy Come Home'.
Like so many other things, today feels like back to the future. And we have a Conservative government that believes tackling the housing crisis involves making life more insecure for families.
If they earn over £40,000 in London, they will have to pay to stay – anything up to the market rent. This provision will hit families hard where both parents work to make ends meet. Earning £20,000 a year in London cannot be considered a high wage. Add onto that the young person living with their parents because they do not earn enough and this provision will affect thousands of tenants.
Despite claiming to be the party of home ownership, they Conservatives have presided over a decline in the number of people who own their own home. And proposals included in the Housing and Planning Bill, which has its Lords Second Reading today, will be out of the reach of most on modest incomes.
A cap of £450,000 for the price of a starter home will be introduced in London. This is likely to be more of a guide price, requiring a deposit of over £90,000 and a household income of over £77,000 to keep up the repayment. There is also concern that the receipt from the sale will not be enough to cover the debt charges on the property, fund the replacement property and make a contribution to the brownfield levy.
No provision is made for the infrastructure that these new starter homes will need, and we are none the wiser as to how the government expects this to be funded. The Council of Mortgage Lenders meanwhile, have voiced concern over the scheme and as it stands, with the Lords Second Reading of the Bill taking place today, we are looking at a product that is too expensive for those it was intended to help and a financial services industry that is at best lukewarm to the idea.
The plan to extend the right to buy to Housing Association tenants and replace them on a ‘like for like’ basis sounds fine until you get into the detail. I understand fully why people want to own their own home. It provides security, and helps them put down roots and become part of a local community. The same desire that people who can’t afford to buy a home want a secure tenancy!
The scheme itself will not be funded by the government that came up with the idea. Instead, it is to be paid for by forcing councils to sell off their most expensive properties when they become vacant and paying a charge each year. There is no clarity as to where the replacement home should be built. Indeed, there is every expectation that the government will allow Housing Associations to build the replacement property anywhere in the country that they want to.
As those who have been following this Bill closely during its passage in the Commons will be aware, there are many other problems with what the government is proposing. Plus a raft of additional clauses added late in the day that allowed for little initial scrutiny by MPs. It’s going to be difficult but I have every hope that by the time we in the Lords have had a chance to plough through the detail, we will at least be able to take some of the rougher – and dafter – edges off it.
Lord Roy Kennedy of Southwark is Shadow Housing Minister in the House of Lords. He tweets @LordRoyKennedy
Published 26th January 2016