Examination of Witnesses (Questions 320-339)|
TUESDAY 2 JULY 2002
320. You are representing a consortium, are
you not, of several districts?
(Mr Darling) If I can give you the district perspective
first of all. A housing needs survey has been carried out within
our district and has identified the needs for the next five years
and the next 15 years (which Mr Robertson will be able to allude
to). That is being replicated throughout the region and it indicates
again that in several parts of the region there is an unsatisfied
demand for affordable housing. It is a significant demand in certain
areas. We commissioned recently a study by CURS (the Centre for
Urban and Regional Studies) and that has also indicated that there
are some problem areas within the north east. So it is a mixture.
321. Can we just come back to my own home village
where several hundred houses have been demolished, houses that
were built in the early 1960's, gardens back and front, three
bedroomed, semi-detached, all mod-cons. Then we look to see what
is happening in Newcastle. Again several thousand houses being
pulled down. The same thing is happening in Sunderland. It is
happening right through the north east. So I come back to my initial
question, is it a question of quantity or is it a question of
(Mr Robertson) My own view is that it is an issue
not necessarily of housing quality but environment quality, community
quality. People do not want to live in communities where they
are isolated or suffer social exclusion.
322. Do you believe we have sufficient houses
in the north east?
(Mr Robertson) In certain parts I would say yes, we
have. But in other parts, particularly the rural parts, the answer
323. Why do we hear that there is still a need
for additional housing to meet increasing demand?
(Mr Robertson) The demographic changes in terms of
households drive that because smaller household development in
terms of more single people wanting to live alone, couples wanting
to live alone rather than with their families.
324. Would you agree that in the north west
housing needs could be almost entirely be met by building on brownfield
sites in urban areas?
(Mr Khan) It can in some areas. The picture is mixed.
You have to create some brownfield sites in some areas to try
to build housing. In other areas there are simply no brownfield
325. Can you give us an example of where there
are no brownfield sites available?
(Mr Khan) Trafford. Where we work in Trafford in some
of the outlying towns where people want to live, like Sale and
Altrincham, it is very difficult to get brownfield sites that
are available at the right cost. Construction costs and land prices
are so high that it is very difficult for us to get brownfield
326. You think that people should be able to
get housing there rather than on the substantial brownfield sites
that apply in the rest of Greater Manchester?
(Mr Khan) It depends whether we want to build mixed
communities. Do we want to have an aim of having a community where
people of all ranges of income want to live? Or do we want to
just have some areas which are for the better off and some areas
327. You have just said that you do want division
of some sort. You say that where ethnic communities want big houses,
four or five bedrooms, they will neverthelessbecause they
want a big a housealways concentrate on a particular area.
You cannot do it both ways. If you want a mixed grouping on the
basis of income, surely you must also want it on the basis of
race and size of accommodation.
(Mr Khan) I do not think it is as black and white
328. No, but you are rather implying that the
barrier was in the areas that were fashionable where the prices
were high and it was difficult to get brownfield sites and that
presented you with a problem that you were dealing with by saying
that is not an area in which we can develop.
(Mr Khan) We want to try to develop mixed communities
where people of all income levels and all backgrounds can try
to live. That is what we are trying to do. I do not think it is
as black and white as perhaps I said earlier.
Mrs Dunwoody: No, but what is the answer?
329. The danger is that you are using resourcesand
we have heard quite a lot this morning about how many resources
are needed across Britain as a wholeto deal with the lack
of affordable housing in a number of areas, yet within Greater
Manchester, which is, after all, one large community, you have,
as Mrs Dunwoody has just said, large brownfield sites, you have
areas that are more run down. I just find it difficult to grasp
that it is socially desirabledesirable from the point of
view of the interests of the whole of the Manchester community,
and valuable use of resourceto concentrate on trying to
create affordable housing in difficult areas rather than take
advantage of the resources that are available to the whole city.
(Mr Khan) We are trying to work across boundaries.
People do not want to move five miles down the road in some cases,
they do not want to move from one village to the next because
that is where they were brought up, that is where their family
and their ties are. I think we have to have some mixture of approaches
varying from having affordable housing in areas of high demand
towards reconfiguring some of the markets where they are failing,
and also towards developing some affordable housing in rural communities.
Those are the three things that I would like to see us trying
330. Do you think that local authorities should
attempt to meet the aspirations for home ownership? If so, how
would this be achieved?
(Mr Robertson) Yes, I think we have a duty to ensurewe
have used this word already this morningsocial diversity,
but it is an issue of affordability. In my own district, for example,
someone on an average wage would have to have a mortgage nearly
5.5 times their household income to afford an average house price.
There is an issue for people who are going to aspire to home ownership
to have some sort of equity in the house in which they live.
331. Is this the view in the north west as well?
(Mr Muir) Not quite. There is an aspiration among
virtually everyone to become a home owner. There certainly are
not the mechanisms to achieve that in the communities of each
individual's choice. Whether we want to do that and can afford
as a country to achieve the aspirations of every individual, I
would doubt. There are some people who can afford to buy the whole
of a property; there are some people who, probably because of
a low income or lack of secure income, will never be able to buy
even a five per cent share of the equity of their property. However,
we do not at the moment have systems that are flexible enough
to allow variable rates of equity sharing by someone who wants
to be a part owner of their property. The systems are one way
or the other: you are either a home owner or you are a tenant.
There are very inflexible arrangements for equity sharing within
332. So you do subscribe to the role of shared
ownership to meet these needs?
(Mr Muir) I think the current system of shared ownership
which the Housing Corporation uses could be a lot more flexible
than it is. The Right to Buy, for example, allows for local authorities
either to have a property which has a tenant in it or a property
which has been bought. There are no equity sharing arrangements
for local authority tenants. It is one thing or the other. There
are different arrangements for charitable housing associations
and non-charitable housing associations, schemes that are funded
by the Housing Corporation after 1988. So there is a whole range
of different mechanisms and I think a lot could be gained from
having one flexible system that cuts across all social rented
tenants to give them greater choices.
333. How do you believe that could be achieved?
(Mr Muir) One quite radical proposal would be that
instead of a council tenant having the option to purchase their
property with a large discount or not being able to afford to
purchase, they could perhaps purchase a tranche of that property.
They could perhaps buy 20 per cent and go up to 90 per cent over
time according to their incomes, or even come down again to a
lower level of equity that they own according to their economic
circumstances over their life, perhaps. The local authority would
hold on to the remainder of that equity to secure the future role
of that property when that tenant moves out or they move to another
area and want to sell.
334. On the Right to Buy you just mentioned
a possibility of the local authority giving an equity in a partially
sold property. If properties are totally sold in the Right to
Buy do you think there should be conditions put on future resale
and should those conditions be restricted to certain areas? Should
they apply generally? Or should there be total prohibitions on
the Right to Buy altogether?
(Mr Muir) I think the practicality is how would we
manage that sort of system. There does not seem to be any basis
in law to administer something like that.
335. Presumably one of the ideas might be to
change the law.
(Mr Muir) Yes. We have, for example, section 106 agreements
at the moment which are a planning tool for properties that need
planning approval, either new build properties or properties that
are converted. There is no similar system at the moment for properties
that do not need planning approval such as a property that sells
through the Right to Buy. Personally I feel that the most effective
way of doing that would be if the local authority or housing association
held back a small tranche of the equity of that property so there
would always be a charge on the property and the housing association
or the local authority could then have a say over who bought that
property when the first purchaser moved on. The first purchaser
would get a substantial profit from the increase in value of that
propertyif there was oneand the housing association
or the local authority could then have a choice when the property
is sold of who would buy it and perhaps change the level of equity
so it could go right back to being a rented property or again
sell on an equity share basis.
336. Just looking at the body language either
side of you, is that view shared?
(Mr Darling) One of the problems that we have is that
the Right to Buys, certainly in our district, are running at 40
per cent since the Right to Buy was brought in; in an adjacent
council their Right to Buys are running at 50 per cent. What you
are failing to achieve through the Right to Buy in certain villages
is the mixed and sustainable communities. These properties are
being lost on second sales not to the original tenant of the property,
the original purchaser, but sold on on the open market. We have
recently looked at a Right to Buy because our shared tenants have
been given a guarantee that they can continue with the preserved
Right to Buy, fairly similar to secure tenants of councils. We
have had our first Right to Buy valuation coming through at £85,000
of an existing property. An adjacent local authority has just
had a council house with the Right to Buy valuation of £100,000.
I think it is a peculiar situation that we find ourselves in,
having been with the local authority transfer in 1999 where we
were selling properties through the Right to Buy with an average
valuation of around about £41,000 (the sale price, including
discount of around about £23,000). We were encouraged by
the local authority, where we are finding difficulty in our development
programme of either brownfield site development or greenfield
site development, to purchase and repair back properties that
were sold under the Right to Buy provisions at around about £60,000
to £70,000 including the repair works to them.
337. So the solution is?
(Mr Darling) The solution is, I again come back to
the local authorities themselves should be given some flexibility
within certain guidance areas set nationally to ensure that they
sustain balanced communities within their areas. I think there
is a limit as to how many properties they can lose within areas
of their districts through the Right to Buy. They need to have
the facility to preserve properties for social rented affordable
338. So you are saying suspend it in some areas?
(Mr Darling) In some areas if the pain threshold has
been breached, yes.
339. The issue of the planning which you mentioned
in section 106, it seems in the north generally there are not
many affordable houses being produced out of this planning system.
Is that because the system itself is not any good or because the
local authorities themselves are not up to using it properly?
(Mr Muir) I think it is not a very effective system.
One of the issues is that once a section 106 agreement has been
placed on a property there is very little administrative arrangement
to ensure that future owners do comply with the agreement.