Debate: New Housing Supply
I congratulate the right hon. Member for Haltemprice and Howden (Mr Davis) on securing the debate. He will be familiar with New Earswick outside York—the first garden village, and such a desirable place to live today. As York nears the end of its 77-year journey to secure a local plan, I hope that the inspectors look at Labour’s proposals to create new garden towns on the edge of York. That is very much in keeping with the history of our city, where we have 15-minute connectivity and the infrastructure—schools, healthcare and transport facilities—that we need to make the community work.
York has a significant housing supply challenge: along with a low-income economy, the cost of housing is exceptionally high. A single person can afford just 5.6% of properties, but finding those properties is a real challenge. Last year, the cost of properties in York rose by 23.1%—the highest rise anywhere in the country. That costs our economy and families. The challenges are not abating. The only difference is that last month York voted for a Labour council. We are committed to doing everything possible to build homes that people can afford to live in. We need to look at how we can develop supply, especially when it comes to starter homes and social homes.
I encourage the Government to ensure that, when analysing their consultation on short-term holiday lets, robust measures are applied to return lets to residential use. Today, 2,079 lets are being advertised across the York area, and we need those homes back in circulation.
Starting with land, Labour has set out its stall on compulsory purchase. Land needs releasing at scale and at pace, not just for local authorities but for housing associations. Too much is banked, and although that may be profitable for developers, it prevents much-needed house building. We need measures under which land is re-evaluated and brought into use—through compulsory purchase orders, if necessary. Too many are gaming the system. Although our policy and priority is “brownfield first”, green spaces—green lungs—must, where appropriate, be placed in the centre of our communities. That is so important for people’s wellbeing and mental health. We saw throughout the pandemic the price paid by people who were locked into high-density communities.
Secondly, we must address funding. In 2012, the Government imposed a housing revenue account debt on local authorities. Despite the HRA debt cap being removed, councils still have to put money aside to pay the debt and interest. The amount available for repairs and retrofit of existing stock is therefore squeezed, blocking the development of social housing, as that money has to be available to pay off the loan. That is freezing development in York and elsewhere.
In York, the HRA holds about 7,500 properties. The council had to pay for that housing stock using the Public Works Loan Board loan of £121.5 million, which demands £4.5 million of interest payments each year. We need the Government to address this issue, as it is restraining development. I urge that the debt is lifted from local authorities’ balance sheets, as it is choking off development opportunities and local authorities do not have the resources to meet the demands. The Government will respond that they have lifted the cap on the HRA, but borrowing will be at an even higher interest rate, so we need to see that debt moved to a different balance sheet. I want the Minister to respond to that point, because the debt is having a chilling effect. Local authorities also need greater flexibility with right-to-buy funding, with receipts currently capped at 40% to reinvest.
York’s income from its stock is only £30 million, so once we have addressed our old stock—retrofit and repairs—and put in sustainable measures, there is very little to spend on development without getting into greater debt with greater interest, so we end up with low build and a housing crisis, as many of our authorities face today. The Government need to build out at pace and scale, so we need to address refinancing. If we think about housing as an investment—and as a 60-year investment, because we want to build the quality homes that are needed—we start seeing the equations change, and that investment will bring forward not only housing but opportunity.
Thirdly, the Government need to build sustainably. That can be achieved if Homes England is properly funded. I am grateful to Homes England for its time and for enabling me to see what it can achieve. It must not be underfunded, as it needs the right resources to build the required volume and to provide the injection of funding that local authorities need. We need adequate grant funding, as required by the local authority, to build volume at the necessary standard, rather than having to waste precious land—as we see on many sites—on luxury developments that are often set aside for the far east market as opposed to being brought into local use. We need to build according to need, so that we do not waste resources and build luxury developments that nobody can live in; that is a real frustration for my community.
Fourthly, we need to make the numbers count. Rather than having targets, we need obligations. The Government made a significant mistake in bringing house building numbers down to targets only, because the numbers we need to see and the scale we need to talk about will be drawn back.
On planning, we need to ensure that the larger developers are not just sitting on sites, stalling development and gaining on the land. We need to get those sites into use as quickly as possible. That has been a significant failing, because as prices rise, the market itself rises too; we are certainly seeing that in York. We need investment
in planning departments. We recently took control of the council in York, and found that the planning department had been hollowed out. We do not have a chief planner and the department is significantly understaffed. Even if all the infrastructure is put in place, if we do not have the planning staff on hand, the opportunity for development will be stalled.
We need land, resources, workforce and ambition. In 18 months, Labour will build the homes people need, tackling the burning injustice of housing poverty, and realigning government priorities to create a new generation of sustainable homes. I trust government will move soon.
Available to watch here from 20:36:20