Öpik on housing

10.09.09am BST (GMT +0100) Fri 25th Apr 2008

' . . everyone in this room agrees that the biggest single determinant of the quality of life of a family in the long term is the quality of their accommodation.'

[Apr 23] Lembit Öpik (Montgomeryshire, Liberal Democrat): I have become very engaged by this debate and by the fact that the bottom line is that everyone in this room agrees that the biggest single determinant of the quality of life of a family in the long term is the quality of their accommodation. I do not need to repeat that point, and I see that the Minister is agreeing. I am encouraged by the fact that we all agree that the fundamental requirement in a first-world country is to ensure that individuals have a quality of accommodation that is consummate with the wealth of the nation as a whole.

The fact that the rate of ownership is lower in London than anywhere else in the UK is hardly surprising. There are historical and financial reasons for that. That in itself is not the issue. In other countries, there is generally a lower level of ownership. It is a quirk of British society that we equate property ownership with achievement.

Nevertheless, what really concerns me are the 91,000 empty homes and the 200,000 or so overcrowded houses, which have already been mentioned by the hon. Member for Regent's Park and Kensington, North (Ms Buck) and others. It is also a matter of great concern to me-and, I am sure, to the Minister-that 330,000 households are on waiting lists. The number has risen by about one fifth in the past four years. We have also heard from various contributors today about the importance of building not just one and two-bedroomed houses, and heard that 60,000 households require homes with three or more bedrooms. It is ironic indeed that 60,000 three to four-bedroomed homes are under-occupied.

Part of the reason for that is the great profitability of building one to two-bedroomed homes. We know that that is why developers like them, and that it is how they maximise their profits. Of course, that could change if we end up with a glut of one and two-bedroomed homes and a shortage of larger homes. We have to recognise that developers are primarily under a financial obligation to deliver what they think will maximise their profits. Let us not be naïve and think that they will alter their strategies simply on the basis of what the Government require and what society needs-that will not happen.

My first question to the Minister is, what mechanisms could be used to influence developers to build the right mix of housing? In parenthesis, I also point out that several developers feel that they have to build one and two-bedroomed homes-the cheaper homes-because the bottom rungs of the house ownership ladder have been kicked away due to spiralling inflation in house prices. Let us not pretend that any short readjustment in the house price market will be sustained for any length of time. The market always recovers if demand exceeds supply, as substantially as it does.

The issue of temporary accommodation has once again been raised. With some 56,000 households in temporary accommodation in London, it cannot be right to think that the strategy is in line with requirements. There has been an 8 per cent. reduction in the number of households in such accommodation, and that is welcome, but it is nowhere near enough.

The cost of temporary accommodation can be measured in pounds and pence and can be extremely high, for reasons that the hon. Member for Hendon (Mr. Dismore) and others highlighted, but the social cost has a practical financial value, as well as a less definable but very real cost in terms of misery. Diverting money to housing associations so that they can house families permanently seems like an attractive option.

My second question to the Minister is, what will his Government do to ensure that local authorities have the tools to break the vicious cycle of temporary accommodation that has been lucidly described by others and needs no repetition from me?

Increasing owner-occupation through shared ownership seems an absolutely sensible way to provide equity for the householder and the state. London has one of the lowest rates of owner-occupation in the UK, with only 57 per cent. owning their own home, compared with 70 per cent. nationally. Twenty per cent. of social housing tenants aged 34 to 44 could afford to buy their own home in 1997-98, but that proportion was down to 5 per cent. in 2004-05, entirely as a result of property prices rising. That leads to my third question to the Minister: to what extent will this Government actively drive owner-occupation and facilitate the use of that valuable and important tool in the interests of resolving these issues?

Jeremy Corbyn (Islington North, Labour): I hear what the hon. Gentleman says about promoting owner-occupation. In my borough, there is roughly 30 per cent. owner-occupation. He heard what I said about house prices. Is it really credible to promote owner-occupation in an area such as mine? Would it not be better to promote rented accommodation to solve the immediate housing problems?

Lembit Öpik: I do not have the arrogance to second-guess the hon. Gentleman's information about his own constituency, but I know that there is great variation in the demographics across London, and that what would not work in his area could well work in others. From what he said today, I suspect that other solutions would be much more appropriate in his area than simply following an owner-occupation agenda.

I think that we are over-obsessed with house ownership in this country. We have created a social status that results in poor decision making by some people, who end up, in effect, being slaves to their mortgage. That does not help them in the long term and it increases the risk of repossession.

The action points seem fairly clear to me. First, compulsory purchase orders could be effective in bringing some of the empty homes back into public usage, or in acting as an incentive to let the property. At least that would be a mitigating measure to reduce the pressure on housing. The empty property strategy from 2003 to 2006 reduced the number of empty homes in Islington by 16 per cent., and I hope that the hon. Member for Islington, North (Jeremy Corbyn) feels that that, at least, has been an effective methodology. However, we still have people in wrong-sized properties. With sensitive management, I wonder whether the Government could do something to make it easy and painless for people to be put in the right size of house.

I reiterate that, unlike the Conservatives, Liberal Democrats are committed to the principle that 50 per cent. of new housing developments should be affordable housing. I do not understand why the hon. Member for Henley (Mr. Johnson), whom I regard as a personal friend, takes a contrary view, when it is absolutely clear that to remove that requirement would simply make matters worse. Perhaps the hon. Member for Welwyn Hatfield (Grant Shapps), who will speak for the official Opposition, will clarify that position.

Simon Hughes (North Southwark & Bermondsey, Liberal Democrat): Does my hon. Friend accept that in London, as colleagues have said, many people just do not have a home of their own? Their needs would be met by the provision of affordable housing. Much of the free market housing would not be a first home and might not even be a second home, and is for people who are generally perfectly adequately housed-it is a not a need in London at all and is absolutely not a priority.

Lembit Öpik: My hon. Friend makes a point that is self-explanatory. I agree. I hope that the Minister will respond to it if he has time.

As well as the 50 per cent. condition, and in addition to looking at compulsory purchase, I seek the Minister's views on the 70,000 hectares of surplus land owned by Network Rail, Transport for London, the NHS and other Government bodies, which could be used to build tens of thousands of new houses. Surely that would be an easy win and would be fairly straightforward-especially through new community land trusts-under the legislation that the Minister himself shepherded through the House on new build, which passed through the House of Commons just a few weeks ago.

I have already mentioned shared equity schemes. I should like the Minister to comment on the potential for new forms of housing purchase for people on low and moderate incomes that keep homes affordable, rather than allowing them to be sold on at a market rate. Obviously, we Liberal Democrats will review and expand our policies in line with the need in London but, fundamentally, I am looking for a commitment from the Minister, whom I hold in high regard, to work strategically with local authorities that are doing the best they can with the resources available, and given the strictures placed upon them. Without that support, I fear that those local authorities will have to act expediently in the short term and continue to exacerbate the strategic problem in the long term.