Baroness Thornhill (LD)

My Lords, I thank the noble Lord, Lord Evans, for speaking in the gap, because it saved me from pouncing immediately on the noble Lord, Lord Fuller, whose comments were so provocative—I should know by now. I also thank the noble Baroness, Lady Eaton, for securing this timely debate and introducing it with her customary experience and insight. I agreed with much of what she said, although obviously not all. We have heard a thoughtful and wide-ranging discussion from across the House. Coming at this point in the debate, I knew that noble Lords would have covered all the key aspects and asked all the main questions, so I am going to take a slightly different tack. I particularly enjoyed the thoughtful contributions from the noble Lords, Lord John of Southwark and Lord Gascoigne, and, interestingly, the noble Lord, Lord Frost. I felt they had something slightly different to say and what I am going to say might chime with them. We may have completely different perspectives, as was all too evident, but there is a striking degree of agreement about the scale of the challenges facing aspiring home owners today. We have heard contributions on housing supply, on planning, good or bad, on infrastructure—a real issue when we are trying to get people to agree to housing—on mortgage access, on rental costs, and on the wider functioning of the housing market. All noble Lords have posed detailed questions to the Minister, and I do not intend to repeat them. Instead, I want to focus on two issues that have only been touched on: affordability and intergenerational fairness. As former Mayor of Watford, I met many people whose experiences illustrated why this issue matters. They were not looking for special treatment; they simply wanted the opportunity that previous generations often took for granted—the chance to buy a home, put down roots and build a future. Several noble Lords have spoken about the need to build more homes, and it is difficult to avoid the conclusion that, as a country, we have not built enough homes for many years, and certainly not enough social homes. I want to publicly disagree with the noble Lord, Lord Jackson, for his use of the phrase “warehousing welfare”. My question is: where should the most vulnerable people in society live? As today’s debate has demonstrated, supply alone does not explain everything. Of course more homes need to be built; I doubt anyone in this House would seriously disagree with that proposition, though some housing experts do. But perhaps we should be honest about the limitations of what building can do. Do we really believe that we can build our way to affordability alone? If so, over what timescale? Five years, 10 years, 20 years? Even if ambitious housing targets are reached, targets do not build houses; builders do. I get fed up of the “Our targets are higher than yours” kind of willy-waving that goes on where targets are concerned. Even if they are achieved, are we confident, as somebody said, that homes will be built in the places where the demand is greatest, where the jobs are concentrated and where people want to live and work? These are not arguments against building more homes. They are arguments against believing that a complex problem has a simple answer: just keep building. If affordability is the objective—and we on these Benches believe it should be—should we not be honest enough to say that building more homes is a means to an end and not an end in itself? Affordability lies at the heart of almost every aspect of housing policy. It determines whether young people can save for a deposit, whether families can afford mortgage repayments, whether people can move as their circumstances change and, ultimately, whether home ownership remains a realistic aspiration. One of the difficulties in housing policies is that political debate, as evidenced today, often searches for a single cause and a single solution. We are told that housing would become more affordable if the planning rules were changed, if there were not all the extra taxes that we have to pay, if only interest rates were lower or if one element of the market behaved differently. The reality is far more complicated than that, and it is important to say that where we are now has been decades in the making, not just the past few years. Housing affordability is shaped by supply, definitely by planning rules, by land values—an interesting one—but also by wages, interest rates, demographics, construction costs and wider economic conditions. It is also affected by how effectively people can move through the housing system at different stages of life and by the availability of supported and specialist housing. Now, no one mentioned that today, so I immediately look over and say, “Lord Best, where are you?” as that is something that he always reminds us of. During my years in local government, I would encounter two very different conversations about housing. One resident would proudly tell me how much the value of their home had increased since they bought it, but another, a renter, would tell me they had all but given up hope of ever buying a home; sometimes, those conversations were on the very same street. This captures the dilemma at the heart of housing policy. Those seeking to enter the market understandably want greater affordability and, as we have heard a lot today, those who already own their own homes often see rising house prices as a source of security, which for many is an important component of their long-term financial planning. In truth, we celebrate affordability when we are trying to get on the ladder and rising house prices once we are on it. That is why housing remains one of the most politically difficult areas of public policy. Almost everyone agrees there is a problem. The disagreement begins when we discuss who should bear the costs of solving it, because every serious solution creates winners and losers—and I am sure the Minister is very aware of that. More development can place pressure on existing communities and infrastructure. Lower house price inflation may be welcomed by aspiring home owners, but not necessarily by those whose wealth is tied up in their homes. Reforms to planning, taxation, land use and incentives involve trade-offs. The challenge is not that the choices are unknown but whether Governments are prepared to make them. An equally important theme arising in today’s debate is intergenerational fairness—mentioned ably by the noble Baroness, Lady Paul, and I agree with her challenges. The reality for many young people is that they are attempting to enter a housing market that is fundamentally different from the one that we entered and that was entered by their parents and grandparents. Deposits take longer to save for, high rents consume the income that might otherwise have been used to build a deposit and mortgage affordability remains challenging. Increasingly, access to home ownership appears to depend not simply on work and saving but on whether someone has access to support from parents, grandparents or inheritance. That is a stark reality that I believe we on these Benches and the Government are trying to address. This is a question not of whether one generation has worked harder than another but of whether opportunities available to successive generations are broadly comparable. Increasingly, many people doubt that they are, and this should concern us all. I hope the Minister will address two issues in particular. First, does she accept that affordability pressures are increasingly creating a housing market in which access to home ownership depends more heavily on parental wealth and inheritance? If so, what do the Government see as the answer to that challenge? Secondly, if affordability is the objective, how should success be measured? Is it by the number of homes built or whether a young person on an average income in 10 years finds it easier to buy a home than they do today? It will take that long. We all know that home ownership should remain an aspiration achievable through work, savings and endeavour, not a consequence of inheritance. We know many of the drivers behind the affordability challenge and many of the potential solutions. The difficulty is not that the problem is misunderstood but that the solutions involve trade-offs, winners and losers, competing interests—some very powerful—and difficult political choices, with electoral consequences at the ballot box. I will leave with a final question for the Minister. Does she believe the Government accept that the real obstacle is no longer understanding the problem of housing affordability but having the potential courage to confront the trade-offs required to solve it and to confront the consequences of what we already know?