Housing and Regeneration Bill

My proposal to oppose Clause 34 is included in this group. Some of the comments made just now by the noble Lord, Lord Best, are valuable because there is no doubt that the renting and home ownership markets are closely interrelated, particularly in low-cost property, whether it is designed as low cost or whether it is low cost because of local market conditions. I have two points to make. The first concerns the definition of low-cost rental accommodation in this clause. What is low-cost rental accommodation as opposed to rental accommodation generally? The housing market is not as buoyant in some parts of the country as in others—I am talking not about the past few weeks, but generally—and market rents are not all that high. People having to pay them may think that they are high, but compared with other parts of the country they are on the same level as the rent you would pay as a tenant of a housing association or local authority. The difference between those rents and private sector rents may not be great or exist at all. If ““low cost”” is being defined according to the circumstances of the local housing market, there may be a problem. What is desperately required in some of these areas is decent rented accommodation as opposed to a lot of the rented accommodation that exists in the private sector. Some of it is okay and there are good landlords and property companies, but a lot of it leaves a great deal to be desired. For people who need to rent, the real need is not necessarily low-rent accommodation in the local market, but decent accommodation. That means housing associations and local authorities, because the housing market in these areas is simply not going to provide a lot of rented accommodation—certainly not that people can afford. There may be a small amount of more expensive accommodation catering for a different market altogether. Coming from an area where the housing market has been depressed for a long time, I am wary of talking about low-cost accommodation. Decent accommodation is required for renting. My second point relates to one made by the noble Lord, Lord Best, about the relationship between renting and buying, particularly in the case of individual households and individual houses. In some areas, complex regeneration partnerships or packages—call them what you will—are being put together to regenerate the area. They might be regenerating existing properties or clearing properties and building new ones. In many areas, you will be involved in the private sector with development companies. That may be desirable or undesirable but that is the real world we live in and therefore you have to put together partnerships or packages. The houses that they provide will be for sale; whether they are low-cost accommodation for home ownership is a matter of opinion, but some of it will be deliberately low-cost accommodation in relation to the local circumstances. In any case, because of the market it is aimed at, it will have all to be sold at a reasonable price. My problem with the clause is that public subsidy will in many cases go into those regeneration packages. It will go directly to the developer in return for their selling the houses for less than they would have to if they were funding them themselves. It might be the land or, in some cases, the houses and the land to be regenerated which is provided either for less than market price or for nothing. That is not a grant in the sense that the noble Lord meant it, but it is a direct public subsidy which will come from a public body. That might be English Partnerships and therefore the HCA under the new legislation. In some circumstances, it might be sensible for some of those houses to be provided for rent rather than for ownership. It might be sensible for the development company to be the body which rents them out. The clause might get in the way of that. It may be a case of the clause being designed for very specialist situations in some parts of the country or of me asking too many ““what if”” questions, but I can see some problems here. I know of at least two circumstances in which development companies are coming in on exactly that basis; that is, they are being subsidised so that they can provide the houses at a price which might be saleable in the local market. If one does not provide that subsidy, it will be a case not of their trying to sell the houses for a lot more money but of their not coming in, because they would not be able to sell them at what would be the commercial price if they were doing it just as a spec builder. There may be a problem which the Minister might look at.