My Lords, I rise to speak to Amendments 67, 68E and 69 in particular, but am generally supportive of all other amendments in this group. Other noble Lords have talked about how concerned they are that this part of the Bill will reduce the number of low-rent social homes in places where they are needed most. I am a governor of an inner-city school where over 50% of children are on pupil premium, but in an area where market rents are at a premium and house prices have continued to rise, even during the 2008 recession. I want to use that small community as an example of some of the challenges posed by this particular part of the Bill and to raise the questions that I have. I will then go on to explain my amendments.
How will key workers be able to live near a place such as I have described on reasonable rents? How will government objectives on the need for cohesive communities be met? We need a mix of tenure in every block and every street. I was particularly struck by what the noble Lords who spoke about that earlier had to say, especially the noble Lord, Lord Carrington of Fulham. What about children in the most challenged families who need a stable home near a school like the one I have described, in a very expensive part of
inner-city London, so that they can have the stability they need to help them overcome all the other challenges in their lives? The school must stick with them throughout their childhood. For that reason, I support many of the amendments in this group and have extreme concerns about the sale of these high-value asset houses. I make those general comments as this is the first time I have spoken in the debate.
The amendments tabled by me and my noble friend Lady Bakewell of Hardington Mandeville are about newbuilds for local authorities and an exemption of those from sales. Without an amendment of this nature, the threatened forthcoming sell-off puts at risk existing building programmes. I will focus on that because councils are pausing, rather than build an asset, because they believe that they may lose the value of that asset almost as soon as it is built.
Shelter estimates that almost 113,000 council homes are likely to be above the value threshold, of which 78,778 will be lost from the most affected local authorities, of which half are in inner-city London. As other noble Lords have said, we are basing this on Shelter figures because, at the moment, that is our best grasp of figures in this area pending more detail from the Government. The top 20 councils that are most impacted currently have plans to build 20,390 homes. However, even the threat of this legislation means that they are pausing in building these homes. For example, Islington Council has said that the policy could end its newbuild programme. I would be interested to hear how the Minister believes councils can even borrow at the moment to build, given that lenders can have no confidence in future revenue from that property if, as soon as it is built, it is in jeopardy of being sold. Indeed, existing council building programmes are often partly financed from the revenue projected from the sale of a small number of high-value council homes, with one fundamental difference, which has been much debated already: the councils get to keep the money.
6.15 pm
Of those 20 most affected councils—and this is so important to these Benches and other noble Lords who have expressed opposition to this part of the Bill—159,014 people are on the waiting lists, 22,371 of whom are children, who right here, right now and even as we speak are living in temporary accommodation. As we focus on those children, can we please learn from this Government how they will be helped into permanent housing by the sale of these assets? Shelter believes that this sell-off will reduce overall stock. High-value homes sold are likely to become buy-to-let properties—other Members have spoken at length about the danger of that, so I shall not expand on it. Those families in temporary accommodation are not even back to square one; it is even worse, and this is not solely an inner-city or London problem. This comes on top of the 1% rent reduction. The noble Lord, Lord Lansley, talked about South Cambridgeshire council, his own area, but it recently said in evidence that its housebuilding programme of 1,000 homes had ceased overnight because of its concerns about what is coming down the track in terms of sales of high-value assets. It has built four houses from its programme for the next 20 years, but as I understand it, it has now
ceased building entirely. Joseph Rowntree estimates that the recent rent cut has already resulted in 34,000 fewer homes being built. I know that we have been very attached today to commitments in the Conservative manifesto, so I simply remind the Government of that manifesto commitment to 275,000 additional affordable homes by 2020. However, if 34,000 fewer homes are being built because of the rent cut—and some councils, including Conservative councils, are now pausing their housebuilding programmes—even that target, which we would prefer to be larger, is in jeopardy. In Lewes District Council, the Conservative cabinet has mentioned the uncertainty over future plans for council housing as a reason to put on hold its current housebuilding plans. I am concerned that we will look back at this moment and see a drop in the level of council house building while this policy is being debated.
The current trend of reduction in social housing is bad enough, as Joseph Rowntree makes clear, with the figure of one in seven people being so housed today projected to decline to just one in 10 by 2040, but those projections were made before the freezing and pausing of housebuilding that I have described. We would like the sale of those assets to be held back when it comes to new build in order to encourage councils to get on with building social housing.
It is our understanding that, in communication which DCLG has so far had with councils to develop this policy, it has been clear that the department considers new-build homes to be subject to sale under the terms of the Bill as it currently stands. In Committee in the Commons, the Minister ruled out newly built homes that had yet to be occupied as counting as high-value vacancies, but, as far as we are aware, DCLG has not committed to limiting the scope of new-build sales beyond that. Therefore, a new home could potentially be sold off months after it was occupied only for the first time if the tenant moved or died. Although I appreciate that the Minister is working within the constraints of how much material and information have been provided to her through regulations, particularly in this area, it would be great to know what the Government intend. As someone who worked for a year at No.10, I know what will be happening there right now. This place and our complaints about the lack of regulations will feel very remote. Instructions will come through to Ministers, as they always do, “to just get this Bill through and land it, and those pesky Lords are being very annoying in all these questions”. I understand and sympathise with the situation that the Minister is in. Constructive amendments such as this one are meant to be helpful. It gives reassurance to councils that they can carry on with their building programmes and hold on to a valuable asset.
Many of these amendments—we have seen this throughout the day—are like a guessing game. Why are they a guessing game? We all know that it is because we do not know the detail so we cannot debate it. For example, I also have in this group Amendment 68E, which simply says that a property should be allowed to be vacant for six months. That is a complete stab in the dark, because we have nothing else to build on. The Government may say that if a property is vacant for six minutes that means it is a vacant property. I am saying six months. I would love
us to be able to debate the detail of that, but we all know where we are with that. If new-build homes are not excluded, the risk that homes will have to be sold shortly after being occupied will be a major disincentive to new council building, hence the amendments that we have tabled in this group. The same applies to homes that have been brought back into use through significant renovation.
I want to return to the small catchment area I described—a school with a high level of pupil premium, in an area of high market rents. Key workers are priced out of the area. Mixed tenure is gone and the mixed community is gone. Children on pupil premiums are priced out of the area altogether. That is not a community that I ever want to live in or want to see in the future, and I do not think this Government should either.