Examination of Witnesses(Questions 260-279)|
TUESDAY 22 OCTOBER 2002
260. Can I be clear about the scale. What you
are saying is that at the present moment the amount of housing
being provided by planning gain is one drop of rain on a wet day
and then you are saying to us if you got really tough it would
improve. Is that going to be two drops of rain or half the day's
(Mr Tetlow) You could realistically seek to double
it over the next five years but there are two important qualifications.
Firstly, in terms of public subsidy there will still be a major
demand on public subsidy so I would not want to assume (particularly
bearing in mind that many of the sites will be brownfield) that
you will be achieving more than the present third figure without
subsidy. The other thing is that there need to be proper linkages
between these sites that are coming forward via the planning system
and the funding mechanisms via the Housing Corporation. I think
the third point is that housing associations are increasingly
dependent on this source of supply and the reason for that is
that it has been increasingly difficult for them to find sites
on which to develop 100 per cent affordable housing.
261. But do you believe that local authorities
also need additional legal powers in order to achieve this doubling
of the numbers because there have been some recent decisions where
a local authority has said, "We want social rented housing
on this site", and although a form of subsidised housing
has gone, it has not been rented, it has been shared ownership,
I think. Would it be helpful if local authorities had more statutory
(Mr Tetlow) I do not think they necessarily need more
statutory powers. They certainly need better guidance. Circular
6/98 should have been reviewed previously. After all, we had a
PPG3 in 2000 and one of the central planks of that was providing
more affordable housing. Yet for some odd reason the Government
did not issue new guidance to support the new PPG3 and the circular
was intended to supplement the superseded PPG. The definitions
and the site size threshold are two issues that definitely need
to be addressed in the new guidance. It needs to be more practically
focused as well. There has been quite a lot of good practice research
carried out and that needs to be better distilled into clearer
government guidance. I do think, however, that a lot of it is
down to the local authorities giving the issue priority and showing
determination in their negotiations.
262. You have made suggestions that the right
to buy should be limited in some areas. Why is it necessary to
(Mr Perry) The difficulty with the right to buy now
as opposed to earlier on is the loss of stock that is involved.
It is running at around about 50,000 units per year and, as we
have heard, we cannot provide that number in terms of replacing
the lost properties. Even though the response will be that the
right to buy is exercised by people staying in properties anyway
so those houses are not really available, that is not strictly
speaking true because people tend to stay there for about ten
years, so after ten years the property becomes available. We are
looking long term, and of course a proportion will leave after
the three-year period when they are entitled to leave without
repaying the discount, and so those losses to the stock are fairly
immediate. Particularly in London where right to buy is running
at around 11,000 a year, we are probably building less than half
that in terms of new units, and it is really contributing to a
very serious situation in terms of loss of affordable rented housing
263. When Tower Hamlets talked about the right
to buy being abused, have you any evidence of that? How many right
to buy sales are affected by abuse of the system?
(Mr Perry) We cannot quantify that yet. The ODPM is
doing research on that at the moment. I think the evidence will
be out quite soon. We know the kinds of abuse that are taking
place in terms of people being bribed to buy their property when
they do not want it, and they sub-let the property for three years
until the company that bribed them takes it over, that kind of
thing, and also people buying properties in advance of known demolition
in order to benefit from compensation. Those are two of the most
commonly known abuses but we simply do not know the extent of
264. Do councils need new powers here and, if
so, what powers?
(Mr Perry) The difficulty with the present legislation
is that, understandably, in 1980 it was based very much on forcing
local authorities to sell come what may and the onus was very
much in favour of the prospective purchasers, and the local authority
could do very little to prevent a sale. We need more balanced
legislation where local authorities can restrict sales in certain
circumstances, where they can restrict sales when demolition is
due, and where they can restrict sales within terms set by the
Secretary of State in very high demand areas.
265. There is a proposal that the right to buy
should be extended to all housing association tenants. Would that
be a helpful or unhelpful move?
(Mr Coulter) We need to deconstruct the figures. I
personally have not seen the consultation document which was promised
to back up that proposal. It would add a relatively small number
of housing association tenants to that pool. Of the current 1.8
million housing association tenants, about 650,000 have the preserved
right to buy through stock transfer; about another 200,000 plus
have the right to acquire which was introduced in the 1996 legislation;
so of the balance of roughly one million, about a third already
have the right to buy because they are tenants of non-charitable
housing associations. So we are talking about a core of 600,000
or so who would be captured by the right to buy from the charitable
housing associations, which raises a range of issues about charity
law, for one, and secondly at a practical level since approximately
two thirds of tenants across the social sector as a whole either
have full or partial housing benefit, it raises the question of
whether it has any relevance to the sort of issues that are debated
in the housing market.
266. In terms of social housing would it be
helpful or unhelpful?
(Mr Coulter) I do not see that it would help particularly.
267. The right to acquire; is that being exercised
extensively or not?
(Mr Coulter) Not extensively. The specific reason
I think is two-fold. Firstly, the point I made about the income
levels of those who are housing association tenants, particularly
in the period since it was introduced, where those income levels
are reducing relatively speaking. Secondly, of course, there is
a different structure from the right to buy. It is not a discounted
approach, it is an approach which reflect the previous tenant
incentive cash schemes. I think the maximum available discount
is about £20,000 in the highest cost areas and, of course,
there is a growing gap between that available discount and the
current market value.
268. A lot of people in the South East with
that sort of discount could buy a couple of houses in Greater
Manchester or in Newcastle, could they not?
(Mr Coulter) Potentially so.
269. Many submissions to the Committee support
the idea of mixed tenant developments but apparently there are
very few successful schemes. How can you ensure that social rented
housing is not just confined to one corner of a development site?
(Mr Coulter) Perhaps I could split that into two parts.
If I could make some general observations and Robin could add
some specific planning comments. Certainly the mono-tenure approach
would be regarded by everyone as a failure. It has been a product
of a range of circumstances, including public policy, which I
think is now being redressed in choice based lettings and the
rest. Increasingly we are seeing developments and existing schemes
looking to mixed tenure. For example, the Greenwich Millennium
Village is a mixed tenure proposal. If you look at what the Joseph
Rowntree Housing Trust is doing on its largest own estate in New
Earswick in York, it is selling every fourth re-let in order to
rebalance the economic and social structure of those communities.
So there are some practical steps starting and there are some
planning approaches which might also help.
270. Do you see it as a problem of some significance?
(Mr Coulter) Absolutely. The socio-economic composition
of the social sector has changed dramatically.
271. What can be done to ensure this does not
(Mr Coulter) At two levels. Firstly, the planning
of new housing (not of the development programme but the planning
of new housing) is specifically to be mixed. That is now public
policy with the Housing Corporation's programme which will give
preference to schemes which provide for tenure mix. Secondly,
dealing with existing stock on a re-let basis to ensure that there
is more economic balance in communities.
272. Have you been consulted as to your opinions
by the Department?
(Mr Coulter) By the Department and the Corporation,
273. You have. Many schemes led by registered
social landlords include a mix of social rented housing and shared
ownership but do not include housing for sale. How do you think
this problem can be addressed?
(Mr Coulter) Housing associations are not legally
empowered to provide housing directly for sale so schemes which
have that component would have to involve a genuinely private
274. Are you saying that requires legislation?
(Mr Coulter) It requires a change in the law to enable
housing associations to be direct providers.
275. I thought we heard in earlier evidence
that it is happening in Liverpool and that one of the housing
associations there was doing it?
(Mr Coulter) It is probably through an unregistered
subsidiary and I am not aware of the circumstances.
276. So they can do it?
(Mr Coulter) They can do it through unregistered bodies,
which may raise other questions for regulatory authorities.
277. Are you supportive of such changes to legislation?
(Mr Coulter) Yes, we would like to see that.
278. Are service charges imposed by freeholders
on mixed tenure estates causing problems for tenants in the social
(Mr Perry) I think they probably are but it is difficult
to know what to do about this issue where there is a genuine service
279. Have you any views on what can be done?
(Mr Perry) The issue is coming up specifically in
relation to achieving the Decent Homes targets. Leaseholders in
right to buy properties in blocks of flats often stand in the
way or have to take part in renovation schemes if the whole block
is to be brought up to a decent standard, and that is an issue
which is being looked at by the ODPM at the present time. I suspect
some incentives to leaseholders to take part in those schemes
will come from that, perhaps in the way of capping of costs.