Damian Hinds

Of course, I agree. It is sometimes frustrating to talk to people who say there is no link between aggregate supply and the price of housing. Of course there is, but there is also the question of the mix, which is what I want to come to. Other things being equal, the best returns for developers tend to be on larger, costlier homes, and new builds are generally more expensive than the existing stock of housing. In East Hampshire, the median price of the current housing stock is an expensive £430,000, but the median price of new houses is £530,000. With development and the increase in stock at a local level, median house prices therefore go up. The formula then calls for more of the same because of how it measures and treats affordability, so it becomes a cycle in which we still do not get the lower-cost homes we need. It could even be said that developers have an incentive to keep the unaffordability ratio increasing, because that extends the pipeline further into the future. I ask Ministers to look again to create incentives for quality, lower-priced housing. I have three straightforward, reasonable asks of the Minister. The first and most important is, of course, to rebalance the formula away from rural—not so there is no rural, but so the balance is right and we do not have targets that mean an unrealistic amount is put into the countryside. It is about having that balance, which requires changing the formula. I asked that of the Minister yesterday, and he was good enough to give me a pithy and clear single-word answer, which was no. I get that, unless and until it changes, the policy is what the policy is, so the answer is no. However, I ask him to reflect further and think about it, not to conflict with Government policy but to complement and support Government policy. A change in the formula—moving back towards the urban, from the rural—would actually support what he is trying to do, including the spirit of what he outlined in yesterday’s statement. My second ask is to change the way the formula works on affordability, to remove the perverse affordability factor I mentioned. Affordability looms large in the overall formula, as it has had its weighting increased, but this is specifically about removing the perverse effect I just mentioned, whereby building more actually makes an area more unaffordable in the eyes of the formula, which therefore increases the target. I think the Minister will say that local authorities can do that in their plan making, but we need it to be systematised to find a way to require a change in the mix of housing so that we get homes that are more in reach of people growing up in rural areas. Finally, in the meantime, as the targets have increased so much and so quickly—the five-year housing land supply in many areas could not possibly have increased nearly so quickly—we have a lot of speculative development. Therefore, pending the change in the formula, will the Minister give guidance stating that local authorities should consider the cumulative impact of all developments together?