In an exclusive interview, First Time Buyer editor Lynda Clark asks Roberta Blackman-Woods MP, Shadow Local Government and Housing Minister, some key questions about first time buyers, how she sees the property market in general and how to get more people on to the ladder
Roberta Blackman-Woods has been MP for the City of Durham for over 10 years and since 2011 she has been part of the Shadow Ministerial Communities and Local Government team. She is Shadow Local Government and Housing Minister where she is responsible for planning and housing. In this role she is part of both the Shadow DCLG team and the newly formed Shadow Housing Team, which has been formed due to the importance the Labour party has put on tackling housing issues.
Given that you backed the Homeless Reduction Bill, what do you think needs to be done to help address the housing crisis in the UK?
Ok, I’ll start with the Homeless Reduction Bill. I think it is an important Bill as it adds additional access to information for homeless people and advice on where they might be able to get housing, However, I think we need to go much further than this Bill in terms of addressing the housing crisis; I think we all know that the roots of the housing crisis is that, for generations now, we haven’t built enough housing and there is a huge backlog. We know that we need to deliver somewhere between 250,000-300,000 homes every year. We’re barely managing 150,000 at the moment, so my view is that we need a huge increase in output in the housing sector across all tenures. We need social rental housing, first time buyer housing and more general family housing to buy and to rent. Ultimately, we just need a really big output across the whole sector.
What do you think of the current Help to Buy scheme?
I can appreciate the Government’s efforts in wanting to do something to help first time buyers. I think one of the interesting things that we know is that home ownership is falling in this country. It is falling from nearly 71% in 2003 to not quite 64% last year. We know we’ve got that drop of 7%. But if you look at 25-34 year olds, it is a drop of over 20%, so there are only about 35% of that age group who are able to buy. To me, that shows that there is a huge problem with young people getting on the housing ladder. I can appreciate the Government wanting to do something, but the view now seems to be that all Help to Buy is doing, particularly in some areas, is inflating prices. I think that money would be better spent on producing the housing, and particularly the rent to buy products that might really help a much wider range of young people.
Shared ownership – do you think it works for first time buyers?
I am a real fan of shared ownership, but actually, the data is showing us that shared ownership isn’t very popular – a lot of people just find it too complex and it doesn’t work for everybody. The range of shares doesn’t work for everybody, yet what does seem to work for people is a more straightforward rent to buy scheme, where, at a certain point, you are able to commute some of your rent into mortgage payments. I know a lot of housing associations in particular are looking at rent to buy schemes and, actually, I think housing associations provide some of our best products for first time buyers. If the Government really worked with the housing association sector, they could see what sort of schemes could be drawn up that really would help first time buyers. The reason I say this is that a lot of housing association properties are really quite good quality housing and I think that is important for first time buyers, so I would rather see that. The Government is expected to announce a ‘Buy as You Go’ scheme in the Housing White Paper, which may be a good answer to enable people to move from renting a housing association property to being able to buy it, by allowing them to build up equity over time. But we are still waiting on the details of that. I just think that we have to think more imaginatively now about how to get first time buyers into the housing market. Just relying on the market in the short term is not going to deliver, because properties are too expensive in lots of areas and, even if we had a massive uplift in the output of homes over the next couple of years, it is not going to happen quickly enough to stabilise the prices to allow young people to get on the housing ladder, so I think that we have to think about how to use those sorts of schemes much bette,r with more focus on first time buyers.
What would a Labour government do differently to help first time buyers?
We looked at this particular issue in the Lyons Review in the last parliament. The first thing we wanted was a major uplift in supply as it goes without saying that we’re not going to address the problem in the longer term unless we start to build the number of homes that we need. But within that, we looked at whether a certain number of properties could be set aside for first time buyers, particularly those who have got a local connection, and that idea was taken up really positively. We also thought this could help with planning, because, quite often, one of the reasons why people don’t like new developments is because they think that it will crowd out local people and they assume they won’t get a chance to have one of these homes. We thought about having a percentage set aside for a period of time and, if nobody came forward from the locality to buy them, then they could be released on to the open market. So, we would want to test out whether something like that could work. We would also like to work with housing associations and small developers in developing some first time buyer homes. I don’t know that we actually see starter homes as the way forward. Again, we can see where the Government is coming from, but we think that policy is very misguided because the ceilings that have been set for starter homes are too high. I think my concern about it is that it is all very well having starter homes, but if they are crowding out other forms of affordable housing from coming forward for section 106 agreements, then we could find ourselves in an even worse situation with regards to the provision of affordable housing – yet we haven’t actually got starter homes that first time buyers can readily afford. What we would much prefer to do is have some specific products where housing associations, small builders, or other private builders can specifically market to first time buyers, but the critical thing is that they are affordable. So, Labour is about to do a major piece of work on affordability, what affordability would mean in different areas of the country and what it would mean for social renting, private renting and buying.
Being the Labour MP for Durham, do you think first time buyers in the north face different issues to first time buyers in the south?
I absolutely do. I mean, it is not the case right across the north that it is easier for first time buyers, because some of the cities in the north have quite high housing costs – for example, in the northeast, Newcastle and Durham are expensive and it is very difficult for first time buyers to be able to buy – but that being said, there are areas where houses are much cheaper. I think the problems are that, because the houses are cheaper, they are often quite poor quality. Therefore, first time buyers might face high energy costs and possibly high transport costs, because often the reason they are cheaper is because they are further out of the city, or they are in a village that might have poor transport links. So, they might be able to afford a house, but it also means that, if they have high-energy costs or high transport costs, then moving on from that property might be quite difficult, so it is a different set of issues. Certainly, for some parts of the north, there needs to be an ability to upgrade the housing stock that just isn’t there at the moment.
You have been quoted as saying “we don’t just need houses, we need houses that people want to live in”. Are we building the right kind of homes which ftbs want to live in?
Usually, I go on to also say ‘…in places and communities that people want to live in’. The point is that, too often, we talk about housing numbers and, although that is really important – we know we need a huge uplift in housing output – we have just concentrated on numbers and we haven’t planned communities properly. In my view, we need housing to have a whole infrastructure underpinning it and around it, so we need proper roads and transport links, particularly public transport, we need to have schools and services and access to leisure and cultural activities. Just sticking a new housing estate on the edge of somewhere and hoping people will get on with it is not the way that we should be planning the delivery of housing, so I feel very, very strongly that if we are talking about this huge increase in housing output, which we need, then we also have to think about how that is being delivered and how we are getting the infrastructure that supports it. We are not just talking about homes for people, because people don’t only live in that home, they also think about their neighbourhood and about their quality of life, not only for themselves, but also for children and grandchildren. They need access to employment and they need to be able to get to that employment. If we are going to have thriving communities, we need all of those things and it is too far down the list at present.
What do first time buyers need in a home that they are currently not getting?
I’m tempted to say space. I think one of the things that has happened in the last few decades is that our homes, particularly at the first time buyer end of the market, are getting smaller and I just think we need really good-quality homes to be built. I would bring back things like zero carbon homes, because we are in the 21st century and we know how to build zero carbon homes so I think we should be building them. We should have proper space standards in place, so that we are building homes that people can actually function in, and first time buyers need information up front about things like whether it is leasehold or freehold, whether there is ground rent and what that means. All of this information that they may not understand needs to be explained to them, so that they know exactly what it is they are getting into. If there are service charges, they need to understand what they are. Many first time buyers in a lot of our cities are likely to be buying an apartment and not a house, so they need to know the complexities that go with that – and, right now, I’m not sure that they do.
When we look at the figures and we see the huge drop in the number of first time buyers in the 25-34 age group, it is clear that something really needs to be done about that. I think we need houses across all tenures, but we can’t move away from the fact that people want to buy their own home. So many people are now in the private rented sector, where the rents are really high and they are not able to save. It is just a vicious circle, really, and we have to find a way out of it. If you can’t do it by making housing affordable, then you have to do it through specific schemes that allow people to convert rent into mortgage, so they are able to buy.