The Lyons review: then and now

The Lyons review: then and now

 

It’s been 10 years since the publication of the Lyons review of housing supply. At Housing 2024 in Manchester Sir Michael reflect on progress since then and what should happen next. This is an abridged version of his speech.

 

When I chaired the review for Ed Miliband, who was preparing the Labour Party for the 2015 election, house building was still emerging slowly from terrible recession brought on by the Global Financial Crisis. The number of new homes being built had fallen to little more than 100,000 per annum and Ed was looking for a road map to tackle the crisis. 

The review made it abundantly clear we were failing to meet the needs of the next generation and set out practical measures to tackle what even then was a housing crisis of major proportions. This included an important role for public/private partnerships. Most of all, we stressed that Government does have the levers to drive output but will only be successful if housing is understood to be core to economic growth and a key part of our economic infrastructure.

We also stressed that for these measures to succeed, every community had to make its own contribution in terms of both land provision and urgent building. 

 

So where are we now?

 

Looking back today, it is gratifying to see progress on some of our conclusions and recommendations. 
The revitalisation of what is now Homes England with new leadership, a bigger budget and a strengthened remit to acquire land, support brownfield development and encourage a new generation of development partnerships.

We stressed the need for – and have seen - the involvement of greater institutional investment. Reflected in terms of both partnering with the public sector to build homes of different tenures and also supporting Build to Rent.

But in other areas, particularly to do with planning and housing targets, I’m disappointed to say, we have gone backwards. 

I hope fervently that a new Labour government will, as promised, reinstate housing targets as a matter of some urgency and link them directly to housing need. 

The housing crisis remains as critical today as it was 10 years ago. There are 1.2 million households on council waiting lists in England and over 100,000 in temporary accommodation – that’s double the number when our review was published and the highest since records began. 

When people are unable to access safe, secure homes it can have terrible consequences for them and our whole society. There are now more than 140,000 children living in temporary accommodation, the conditions of which are often atrocious and, at best, insecure. Growing up in unstable and inadequate housing conditions will impact children’s health and educational attainment. 

Meanwhile the number of adults living with parents in England and Wales has risen by 700,000 in a decade. What is clear to me, and many others, is that we have betrayed a generation. 

The outgoing Government, to give it credit, recognised the need to dramatically increase the number of homes built. But we have continually failed to get near the 300,000 a year figure it was aiming for.

We are simply not building enough homes and particularly homes to be let at rents that reflect local wages and what people can afford. Of the 63,000 affordable homes added last year, only 15% were to be offered at “social rents”.

And to achieve that we need a bigger contribution from local government. The total build by councils either direct building and or through wholly owned new housing companies is growing, but painfully slowly, last year reaching just 8,900 affordable homes of which 2,500 were for social rent.

I welcome the growing ambition to build more from the new Mayors of the combined authorities. But I would still question whether they are ambitious enough.

 

Does Labour have the answers?

 

Could a new Labour Government bring a sea change? I would like to hope so.

Housing is rightly recognised as part of Labour’s strategy for growth and there are welcome promises on mandatory local targets, use of grey belt land, limited reform of the terms of land purchase and right to buy discounts. There are also promises of a generation of new towns and urban extensions. Additional planning officers and a strong voice for local communities in development plans, sit beside the ambiguous suggestion of deregulation. Perhaps the most notable promise is “to deliver the biggest increase in social and affordable homes in a generation” but it’s not at all not clear just how that might be delivered or by whom. And that’s a major challenge given the reduced starts over the last two years.

The truth is that the Labour party remains too focused on promoting home ownership and I predict we will, once again, see public money being devoted to assisting the lucky few to buy their homes rather than being concentrated on homes to rent, to the benefit of many more. Homes for rent can be built quicker and are less subject to changes in mortgage rates. 

The overriding aspiration of almost every family, whatever its shape or fortune, is for a safe, secure home not a tradeable asset or a place on a mythical housing ladder.

We must provide more generous grant funding to encourage councils and housing associations to build more homes for social rent. If more funding could be provided in the form of housing grant, it would reduce the Government’s welfare benefits bill by far more than the cost of the extra grant.

And if we want to encourage councils, then another absolute must is to abolish the Right to Buy. The number of social rent homes has reduced by 1.5 million since 1980 – a third of those in the last decade. What’s more, around 40% of homes bought under Right to Buy are now in the private rental sector – with tenants often paying double the rent, sometimes more, than they’d be paying if the home was still owned by the council. 
Right to Buy has taken away councils’ incentive to fund the building of new homes if they have to be sold off cheaply. Right to Buy has not delivered the wider benefits promised for community safety and local investment. Too often, ownership is atomised and remote. There’s inadequate maintenance and a churn in tenancies. All that works against the building of strong local communities.

So, if I could write the script for our next Prime Minister, what would it look like?

Firstly, there would be a nationwide campaign, building on the recent work of National Institutions and Inside Housing, with strong personal leadership to draw together all parts of the housing industry, to change forever the situation where our country can be said to have the worst homelessness problem in the developed world. A natural part of a “Decade of Renewal” you might think.

Next, I’d pledge to build more homes of all tenures –that would include reintroducing housing targets, drawn up with local communities and with early investment in infrastructure, to get buy-in from local people but getting tough on councils who don’t play their part.

Number three, is a radical change to the terms on which land can be bought for all new affordable housing so it reflects only current use value and without the need for Secretary of State’s approval.

Fourthly, there would be encouragement of a wider range of public/private partnerships including new town development companies with reliable long term funding support.

Next, priority funding for housing grant so that more homes can be built at social rent levels.

And finally, action to get local government back in the game of building homes by bolstering their skills and confidence, further increasing the support available from Homes England and abolishing the Right to Buy, as a clear signal of intent.

We really need to get away from the mismatch between the promises about housebuilding that have been made by successive Governments and the polices they have then adopted. Most of all we need to be honest and accept that home ownership is only a part of the solution. A new nationwide campaign to build the homes all our children’s need is the answer.

 

Sir Michael Lyons is chair of the English Cities Fund.