Housing and Regeneration Bill

Until now I have taken a vow of silence to hasten the passage of the Bill, but this is a point on which I wish to express some views and, indeed, some support for these amendments. At the moment, the Bill distinguishes between low-cost rental housing and low-cost home ownership housing. If a non-profit-making organisation is doing either of those it gets regulated but, if a profit-making body—a developer or a housebuilder—is doing the low-cost home ownership schemes, a much lighter touch regulation follows from the role of the HCA in this clause. I am not happy with grants going to private developers and house-builders. They may do a good job but, if the same grants go to non-profit-making housing associations we get a double whammy or benefit, because any profits that are made are recycled to produce more low-cost rental housing or amenities in the neighbourhood. If over time the asset appreciates—the part that is for rent appreciating as well as the part for personal ownership—that extra appreciation and the equity gain is locked in for social purposes, so long as a not-for-profit organisation is the owner and provider. That does not happen if the provider is a profit-making company or housebuilder. I have always been unhappy with social housing grants being paid to developers and housebuilders in preference to housing associations. For that reason, I would not like to see a special treatment with a lighter touch regulation and less control by the HCA of the product when the developer is a profit-making company. I have one other reason to throw into the pot why the distinction between low-cost rental and low-cost home ownership may not be quite as clear-cut or permanent as it appears. The noble Baroness, Lady Dean, chaired an inquiry into the future of low-cost home ownership. One of its chief recommendations was that in cases in which the occupiers of low-cost home ownership—shared owners and first-time buyers in one of these schemes—ran into financial difficulty, it was often a very good idea to allow them to become tenants and to switch from owning to renting the same property. To make them homeless and throw them on the mercy of the local authority, which would then be required to house the family as a homeless family when they had got into mortgage arrears, would be a roundabout and painful process for the family, compared with allowing them to stay put in the same home and become a tenant. We call that scheme—that opportunity for people to staircase down and become a tenant—flexible tenure. The Joseph Rowntree Housing Trust has been doing that for many years, with all its shared owners. If shared owners and their properties get into difficulty and they cannot remain there as owners, it has been possible not to have to evict them but to keep them as tenants. That way, you do not have the problems that mortgage repossessions, of which I fear we will see a lot more, bring for families who have to move their children out of the school and move away to try to create a new life after the collapse that has happened because their home has been repossessed. So this is a prevention of repossession, with the family then able to get housing benefit to help them to pay rent. The distinction between low-cost home ownership and low-cost rental housing becomes blurred, in that regard; in good practice, you would allow the low-cost home ownership to become low-cost rental property and not think of them as quite distinct, with two regimes and two different ways in which to work with them. It is a very good idea to bring the two together and, if we are to have a light-touch regulation at all, the proposal in these amendments is that that would apply only for schemes in which nobody was elderly or vulnerable in any way. I would not even go that far but simply put the two together and regard low-cost home ownership and rental as products that are best done by bodies properly and fully regulated. In my book, that would be only the housing associations and those who will come under the full weight of regulation. However, if the profit-making bodies needed to be included, they should be subject, if they have received a grant, to just the same regulatory powers as the non-profit-making organisations. I support the sentiments behind the amendment and hope that the Minister will be able to look again at this one.