Alok Sharma responds to a Westminster Hall debate on the supply of homes and affordable homes to buy.
The Minister of State, Department for Communities and Local Government (Alok Sharma)
It is an absolute pleasure to serve under your chairmanship for the first time in this Parliament, Mr Bone. May I start by declaring an interest, in that my wife is the owner of a property that is rented out? I congratulate my right hon. Friend the Member for Wokingham (John Redwood) on securing this debate. I agree with other Members that we are debating an incredibly important subject. As ever, he made an incredibly thoughtful and intelligent speech, which has been the hallmark of his contributions since he entered this House in 1987. I would like to take some credit for helping him win that first election, because I was his bag carrier at the time.
I think the housing White Paper is a rather good piece of work. I was not involved in it, but it makes clear that there is no silver bullet, while acknowledging that for decades we have not built enough houses in the United Kingdom. I agree that every credible analysis says that we need to build between 225,000 and 275,000 homes a year to keep up with demand. There is a reason why the White Paper is titled, “Fixing our broken housing market”. I hope colleagues will acknowledge that it is not just a question of individual Governments; successive Governments have tried but not succeeded in getting the house building market going. We have seen some progress: in 2015-16, some 190,000 homes were delivered, but I fully acknowledge that there is a lot more to do.
Whether housing is for sale or for rent, it is increasingly unaffordable, as we have heard from Members today. To give some statistics, to buy an average home in England now costs almost eight times average earnings. Twenty years ago, it was three and a half times average earnings. I agree with my right hon. Friend that in this country people value owning their own home. A very large percentage of people want to do that. I also agree with the hon. Member for Linlithgow and East Falkirk (Martyn Day) that there is an element of social mobility to home ownership. The Conservative party commitment in our manifesto is absolutely clear: we want to deliver a million homes by the end of 2020 and half a million more by the end of 2022. We need to do better, and that means tackling the failures at every point in the system. I know that Members have talked about those failures, and I will try to address them in my speech.
As one or two colleagues have noted, I am new to this brief. I have heard many of the suggestions that have been made, and I will take an opportunity over the summer to think carefully about much of what has been said, but the start has to be building more houses. In October we launched the home building fund, which will provide £1 billion of short-term loan funding for small builders, custom builders and innovators to help diversify the house building market. The fund is versatile. It provides £2 billion of long-term loan funding for infrastructure, which we all agree is incredibly important. Many communities are happy to take more homes, but want the infrastructure to go with them. Although it is too early to see homes completed through the fund, I am confident that, over time, it will unlock up to 200,000 homes, with an emphasis on brownfield developments. I would encourage Members to spread the word to businesses in their areas who may benefit from that fund.
We are supporting communities by ensuring that they can get involved in local planning through neighbourhood planning. I do not know whether the hon. Member for York Central (Rachael Maskell) has had an opportunity to talk with her local communities about neighbourhood planning in the context of the local plan, which she expressed some concerns about.
As we have seen with neighbourhood plans that have been adopted and made, local communities are willing to take more housing. In fact, in the areas where they have been adopted, an average of 10% more housing has been accepted than was the case under the plans of the local authority. What people do worry about is infrastructure, so we have introduced a £2.3 billion housing infrastructure fund to make sure that infrastructure is put in first, which is vital. The prospectus was launched on 4 July and I would again encourage hon. Members to bring the fund to the attention of their local councils. If every local council put forward high-quality proposals, I believe we would be able to make a real difference. As my right hon. Friend the Member for Wokingham mentioned, we are talking about more roads, healthcare facilities and schools. Getting local people to accept housing means giving them more infrastructure.
On public sector land, we are taking direct action to release public sector land for development. Since 2011, we have released land or identified land to be released with the capacity for almost a quarter of a million homes. That is incredibly important and I want to get to grips with it in my brief. The accelerated construction programme will ensure that those homes are built quickly on surplus public sector land. The programme will also encourage new entrants to the market to deliver more homes overall.
We also need councils to plan for the homes that people want to live in, where they actually want to live. As we set out in the White Paper, we intend to consult on a new standardised approach to provide a transparent and consistent basis for the preparation of local plans, which is more realistic about the current and future housing pressures in each place and is consistent with the modern industrial strategy that we have set out.
Many colleagues talked about support for home ownership. I want to make it clear that the Government are absolutely committed to supporting home ownership and we are taking action to help first-time buyers. We have helped more than 400,000 households buy property through schemes such as Help to Buy and right to buy, and 80% of those we have helped through Help to Buy have been first-time buyers. The number of first-time buyers is at a nine-year high. I agree that we need to be doing much better, but it is at a high. My right hon. Friend the Member for Wokingham asked why the Help to Buy scheme applies only to new homes; the reason is that that helps to drive up supply.
Our shared ownership offers an important route in to full home ownership, by allowing purchasers to buy a minimum 25% share in a new-build home. We have also raised the income cap on shared ownership in England.
Siobhain McDonagh
What would the Minister say to my constituent, Jonathan, who earns £37,000 a year but cannot be part of a shared ownership scheme built by London & Quadrant Housing Trust, because the cheapest one-bedroom flat is half a million pounds? My constituency is one of the cheapest in London!
Alok Sharma
As I have acknowledged, we need to be building more homes—there is no doubt about that. I will be very happy to discuss with the hon. Lady that particular case. I am not here making excuses; I acknowledge the tone of this debate, which is that we need to be building more houses.
Tony Lloyd
Would the Minister reflect on the question of incentives to new home ownership? Restricting the scheme to new properties does a number of things. First, it restricts the supply. Secondly, it breaches the point that my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) put forward about people wanting to stay in their communities. On top of that, older properties are often cheaper. The policy does not make a lot of sense.
Mr Peter Bone (in the Chair)
Order. I would just remind the Minister that it is normal for the proposer to have a chance to reply.
Alok Sharma
I have noted the points that have been made and I am sure we will have individual discussions with colleagues.
Another issue noted was the rate of build-out and developers not building out on the planning permissions that have been granted. As colleagues will know, we put forward proposals in the housing White Paper to ensure planning permissions are acted on much faster. I want to work with developers to help them, but they also need to help us to get homes built.
We had a discussion about social housing and affordable housing. Housing associations are responsible for about a third of all new housing supply every year. We are supporting them to build more affordable homes through our £7.1 billion affordable homes fund.
In the wake of the Grenfell Tower tragedy, it is more important than ever to reflect on our approach to existing social housing. That is why we are focusing on supporting housing associations and local authorities with their plans to regenerate existing housing estates. The estate regeneration national strategy and funding package was launched in December 2016 and more than 100 estates are already receiving funding.
It is clear that there is an enormous amount to do. Successive Governments have failed to provide the homes that we need. Although there has been some progress, it has not been good enough. I am determined to work with every organisation, business and colleague who has a role to play, to ensure that we build many more good-quality homes, which our country needs, to help more people achieve their dream of home ownership.