On 20th April 2023, the House of Lords debated amendments to the Levelling Up and Regeneration Bill. The Bishop of Leeds spoke in favour of an amendment that would tie the definition of “affordable homes” to median income:
The Lord Bishop of Leeds: My Lords, I shall speak in support of Amendment 242 in the name of the noble Lord, Lord Stunell. I do so having consulted the Bishop of Chelmsford, who leads for the Church of England on housing but is unable to be here today. It is clear, I think, that we need to rethink what genuinely affordable housing is and how an adequate supply can be delivered. In London, the south-east and many other areas across the country, the current affordable housing for rent definition of 20% below market rates makes little difference to those on a median income, let alone those in most need. Without redefinition, we will continue to work under the illusion that homes classed as affordable are helping to solve the housing affordability crisis, when for the most part they are not.
Of course, we need a multifaceted approach to solve the lack of affordable homes. I was interested to learn from the Bishop of Chelmsford that Vicky Ford MP has been addressing this in relation to Chelmsford. During her 10-minute rule Bill debate on 22 February, she spoke to the shortage of affordable housing we face locally and nationally. Her Affordable Housing (Conversion of Commercial Property) Bill would apply affordable housing obligations to conversions of commercial property to residential occupancy. The Bill is due its Second Reading in the Commons on 26 May, and we certainly hope that it will make some progress.
Today, I urge the Government to look favourably on Amendment 242, which seeks a new definition of affordable homes based on the income of the purchaser or renter and not the open market price of the property. The amendment’s three-pronged approach is, in my view, an effective one. In linking a calculation of affordability to the local housing allowance for renters, it agrees that the Government’s own calculation in relation to housing benefit works for a particular local housing market and can play a part in bringing more affordable accommodation. On this point, I briefly urge the Government to unfreeze LHA from April 2020 levels to truly reflect the increase in rents over the past three years.
Likewise, it is welcome that the amendment seeks to ensure that
“annual mortgage costs … do not exceed 35% of the adult median income of employed people”.
This is a good proxy for ensuring affordability across England in a way that reduces exclusion. The amendment’s provisions on shared ownership flow from the same sound formulas already set out. It is clear that we need an immediate short, medium and long-term solution to the affordable housing crisis we face. Sticking plaster approaches of X number of homes built or not built in a year will not address this. This amendment would be a very helpful step in the right direction towards defining what truly affordable housing should look like.
Extracts from the speeches that followed:
Lord Stunell (LD): My Lords, I am very pleased that I chose to give way to the right reverend prelate the Bishop of Leeds, because he has done a superb job in introducing the amendment in my name, and I thank him very much for that. Perhaps I can just step back and look at the group that we are debating as a whole. There are five different approaches from the different amendments, which are all tackling the same problem. They approach it in different ways, but they are all aiming at a common destination. I will say to the Minister that it would be a mistake for her to simply play off the five different amendments and assume that there is no consensus and that this can simply be dismissed. They are all aimed at correcting the same fundamental policy mistake, which is to assume that the current formulation of the words “affordable homes” actually means affordable homes. It does not. It does not mean that, either in the private rented sector or the private ownership sector.
The highly desirable provision of affordable homes is supposed to be delivered through the planning obligations placed on developers when planning permission is granted. The calculation of that affordability is currently based on 80% of the market sale price of that property on that site or, alternatively, 80% of the market rent which is applicable in that general locality.
Now the reality is that in many parts of England, especially but not only in London, taking 20% off either the market price or the rental price, while it does make it cheaper, does not make it affordable to those in the most local housing need.
[…]
I very much welcome the support of the right reverend Prelate the Bishop of Chelmsford, with whom I had discussions beforehand, and now of the right reverend Prelate the Bishop of Leeds, for my Amendment 242, but I recognise that such a specific amendment might in itself be controversial. Therefore, my noble friend Lady Pinnock and I also tabled Amendment 242ZA, which puts the same proposition in the court of the Minister or the Secretary of State to write the regulations rather than us doing it for him. I do not need to spend too much time advocating for either of these or commenting on the other options in the group. All are aimed at a complete reset of the affordability policy as it stands in the NPPF, so that homes set aside under that policy in future are affordable for those in housing need.
The Lord Bishop of Leeds: My Lords, before the noble Lord takes his seat, may I apologise for jumping the gun? Before he had been able to speak to his own amendment, there was a silence and, like nature, I abhorred a vacuum, but I do apologise.
Lord Stunell: I think the spirit moved. It is good the right reverend Prelate spoke first in this case.
Lord Young of Cookham (Con): My Lords, I wish to intervene briefly to put this debate in an important context. Before I do so, I commend the noble Lord, Lord Best, on eventually achieving the victory which he sought when the 2016 Act was going through; it was not the best piece of legislation on housing that Parliament has seen. I agree with what the right reverend Prelate said—that we should unfreeze the local housing allowance or, if we cannot, increase the discretionary housing grant, to enable those who find that they cannot meet the rent to have more support.
Baroness Taylor of Stevenage (Lab): I am grateful to noble Lords for such an interesting debate on a crucial topic central to the Levelling Up and Regeneration Bill. As a result of the discussions we have had, the National Housing Federation’s figure for people in need of social housing is now 3.8 million—that is 1.6 million households. That is around 500,000 more households than the 1.16 million that are on official waiting lists. We all know the reasons for that: not everybody who is in need of housing will necessarily want to spend the next 20 years on a housing waiting list. In so many areas it is impossible to see people ever being housed as a result of those housing lists.
I thank the right reverend Prelate the Bishop of Leeds for his important comments, particularly about us needing to understand what genuinely affordable housing means. It certainly does not mean the definition that is used in planning at the moment. I agree with his comment that we are under an illusion that housing built under the “affordable homes” category will resolve the housing crisis—it will not. I totally support his comments about unfreezing local housing allowance levels, which would be an important step. Over many decades, we have seen sticking-plaster approaches to tackling the housing situation in this country, which consequently continues to deteriorate.
The noble Lord, Lord Stunell, rightly said that all of the amendments in this group are aimed at the same destination. Neither in renting nor in homes for sale does “affordability” mean what it says on the tin. We are all trying to make sure that we do what we can in the Bill to change that to some extent.
Baroness Scott of Bybrook (Con): In relation to compulsory purchase orders and the community infrastructure levy—and its replacement, the infrastructure levy—the definition of affordable housing is linked to the definition of social housing in the Housing and Regeneration Act 2008. This definition encompasses both “low-cost rental accommodation” and “low-cost home ownership accommodation”. There is flexibility to add other descriptions of housing via regulations.
This ensures that regulations can then be amended so that definitions for the purposes of the community infrastructure fund can also be updated. This approach has been maintained in the Bill for those areas which touch on developer contributions: the infrastructure levy, street votes and community land auctions.
It is right to preserve this flexibility, alongside our proposal that national planning policy should place much greater value on homes for social rent. I therefore hope that the right reverend Prelate and the noble Lord, Lord Stunell, will not press their amendments.
The Church of England in Parliament 
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