Coffee House

Grill the Housing Minister: Mark Prisk answers Coffee House readers’ questions

17 January 2013

Housing Minister Mark Prisk’s brave request for a grilling from Coffee House readers generated a very enthusiastic response. Here are the minister’s answers to your questions.

House Prices

Q: What will the Government be doing to rebalance things back towards private buyers and away from the BTL speculators that have driven the market up to such an extent that private buyers are priced out? (Specifically, get the Treasury to end the tax breaks introduced under Labour that drive this, and level the playing field for ordinary buyers).

A: It’s important not to overstate this problem.  In 2011, buy to let accounted for just 12 % of all mortgages.  And of course it’s important to have a ready supply of rented accommodation for people who want or need that flexibility.  The real problem that I’m focused on is the housing shortage we have in this country.  We’re putting in £570 million to a Get Britain Building fund which has the potential to build 16,000 new homes, we’re making more land available to developers, and we’re working with councils and developers to get homes built more quickly on large sites.  We’re already seeing these sorts of measures taking effect – right now, house building is higher than it was before the market collapse in 2008 – though there’s obviously some way to go.

Q: Is the Minister prepared to use taxpayers’ cash to support house prices at current levels and prevent prices returning to historic equilibrium of about 3.5 times single salary?

A: Of course it isn’t right to use taxpayers’ money to encourage another housing bubble.  But what we can do is help create the conditions for the market to work more effectively: so that builders don’t face problems building and would-be buyers can buy.

The most effective thing the Government can do to promote stability is to avoid the need for rapid increases in interest rates, which is why we are working to tackle the record deficit inherited from the last administration.

But we also know that many hard-working families simply can’t scrape together the large deposits that are needed at the moment, so we’re offering a variety of complementary schemes to work around that.  For example, there’s the NewBuy Guarantee which could help up to 100,000 families by reducing the deposit they need.  There’s also the FirstBuy scheme, which could give up to 25,000 people a loan towards a deposit.

House Prices/ Land

Q: Rather than pursue ‘affordable’ shared ownership schemes, which are in fact costly and cumbersome,  wouldn’t effort be better spent finding ways to reduce prices for all new home buyers by increasing supply of cheap land while ensuring house builders don’t profiteer from this?

A: I don’t think that’s an ‘either/or’ option.  We can do both.  Outright homeownership isn’t a realistically affordable option for everyone, but there’s no reason why people shouldn’t still be able to get a foot on the ladder, and then take on more responsibility as their circumstances change.

But at the same time, we are making public sector land available for new housing, and are aiming for enough land for 100,000 homes by April 2015.

Q: Will the Government consider a policy of ‘use it or we tax it’ to force companies to build on the massive land banks they have built up, rather than waiting till prices go up again?

A: I’m afraid that there is rather a myth around landbanks.  Like any other business, developers have got to have long-term plans, and in fact, if we are going to have any hope of meeting the housing crisis, they need to have land which can be developed over the next three to five years, as well as the next year.

The real problem is that developers and councils negotiated many deals before the financial crisis which are now outdated and unviable, so developers can’t afford to see them through.  There’s actually a law going through Parliament right now which will make it easier for developers to renegotiate these unaffordable deals, unblocking many stalled developments.

We’ve also set up a whole range of financial incentives to get builders building now, such as the £570 million Get Britain Building investment fund, the £770 million Growing Places Fund to grow infrastructure, and the Local Infrastructure Fund, which included around £190 million to prepare and release surplus public sector land for development

Q: Why is the government not building more council houses?


A: The government doesn’t build council housing: it’s up to local authorities to work out what sort of mix of housing they need locally – owned, rented, shared ownership and social housing.

What we do though, is provide the support and incentives for councils who want to build new council housing.  For example, councils can keep the proceeds from sales through our Right to Buy scheme to invest in new council housing.  In fact, nationally, we want to make sure that for every home sold through Right to Buy, another is built: so we get the right balance between supporting homeownership and reducing council housing waiting lists.

Overall, we’re investing £19.5 billion in affordable housing for rent and low cost ownership schemes, which should mean 170,000 new homes by 2015.  Last year, we delivered 58,000 new affordable homes – on average, that’s a third more than was delivered each year under the previous Government.

Q: And why do planning laws restrict house building in times when we desperately need more homes and more construction jobs?

We inherited a cumbersome, bureaucratic planning system from Labour designed around Whitehall edicts and top-down targets which actually held the country back in recent years: not just in meeting housing needs but also putting a break on business.

We’ve spent the past couple of years dismantling that system: and in it’s place we’ve put a much simpler, clearer, faster, and fairer system.  Instead of Government dreaming up housing targets which built nothing but resentment, we’ve put councils and communities in control of planning.  But this isn’t a one way street.  With greater localism comes greater responsibility. As they draw up their local plans, councils must assess their local housing need and plan to meet it.

And unlike in the past, councils now have financial incentives to deliver housebuilding through the new homes bonus.

Welfare reform

Q: Will the Government re-draw ‘local average’ rules on Housing Benefit that have led to ever higher amounts of taxpayers’ money going direct to BTL speculators (I don’t have the numbers but HB is now more than the entire Higher Education budget)?

A: Under Labour, Housing Benefit spiralled out of control, nearly doubling in cash terms in the last decade to £21 billion. Over 50,000 out of work households in England receive more in benefits than the average household income of £26,000.

That’s why we have now capped the level of housing benefit which can be paid at up to 30 per cent of the local average.  The changes we’ve made will restore fairness to the system and exert downward pressure on rents, but it doesn’t mean, as some people claim, that people will be forced to move out of their area. In most areas, housing benefit claimants will still be able to afford up to a third of properties on offer, but they won’t, of course, be able to afford expensive homes – and I think most people would see that as fair.

Private Rented Sector

Q: Why does the government have no interest in protecting private tenants? I pay just under £900 per month on rent for a property that if it was a car would not pass an MOT.

A: I’m encouraging councils to crack down on those few rogue landlords who are exploiting their tenants and trapping vulnerable people in terrible conditions. There are laws already in place to tackle bad practice –and I want see councils using them.  For example, councils can prosecute landlords who do not remedy hazards in their properties and, where justified, can introduce licensing for rental homes in areas where they are contributing to antisocial behaviour and low demand for housing.

Equally, I want to see councils tackling that small minority of letting agents who are letting down both tenants and landlords.  A recent Which? report showed that one in five tenants are dissatisfied with their letting agents, and the Government is determined to raise standards.  Again, councils have powers here – to prosecute letting agents who give false or misleading information.

And I’m also determined to make the Privately Rented Sector bigger and better. Boosting supply is key to improving competition and standards across the sector, and last month I launched the £200m Build to Rent fund to attract new investors into the sector and build new, high quality homes specifically for private rent.

Q: What will he do about rogue landlords who let their properties run down to such an extent it deprives those living next door of gaining profit on their own properties?

A: Labour’s plans for more state regulation on the whole private rented sector will mean higher rents and less choice. One only has to look to Labour’s expensive and flawed Home Information Packs to see how excessive regulation on the housing market pushed up costs for consumers.

Councils already have the powers, the guidance and the funding to take decisive action if they wish to deal with problem properties, and the Government is keen to work with councils, and other local agencies such as the police, to help them further.

Last year we published guidance on the powers that local authorities have at their disposal to tackle rogue landlords, and we are providing £1.8 million of funding to the nine local authorities where the problems of illegally occupied outbuildings, or ‘Beds in Sheds’, are most acute.  Councils have the power to tackle this problem, and we want to see them used.  For example, in Brent the local authority became aware of a large outhouse being built in the garden of a property, which the builders claimed was a garage.  When the council inspected it, it was clear that it had been built as a self-contained flat.  After going through legal proceedings, the council demolished the outhouse so that it couldn’t be used again.

Q: The key issue is lack of demand, yet institutional investors crippled by low yields. Could you increase demand by relaxing restriction on SIPP investment in to private residential to let? Perhaps restricted to new-build with a guarantee of letting for ten years? Also, to encourage Institutions to invest in PRS, could any rental profit be exempt from tax is retained within the pension fund?

A: The private rented sector has definitely been the poor relation in the UK’s housing market for years, and there is a lot of scope to make it more professional and increase the number of large scale landlords, so that it better meets the needs of today’s renters.

Last year, we had a major review into this issue which came up with a series of really useful recommendations.  What we need to do is attract and encourage new players to the market, while at the same time avoiding the excessive regulation that would force up rents and reduce choice for tenants.

So we’re providing a £10 billion debt guarantee scheme which should increase confidence in large scale buy to let projects.  And just before Christmas I announced a £200 build to rent fund which will cut the risk for developers keen to explore this new market.  We’re laying the foundations for a   more professional, larger scale private rented market in years to come.

Housing Stats

Q: Why does the government include the sale of council houses in its new housing total? A council house re-branded is not a new home!

A: The housing statistics we collect show the changes in the housing market, rather than the number of new homes built.  So if a council house changes to a private home – or indeed vice versa – that shows up.  It helps give an overall, detailed picture of the market. The number of net additional dwellings is now at its highest level since 2008-09 (the tail end of Labour’s unsustainable housing boom), with 135,000 in the last financial year.

And the New Homes Bonus is incentivising councils to deliver even more new homes. Over the next year, England’s councils will share a cash payout of £661 million for delivering 142,000 new homes – including 58,000 affordable properties.  This takes the total paid out since the start of the New Homes Bonus scheme to over £1billion.

Q: Can Mr Prisk confirm that we are heading for fewer than 100,000 housing starts this year against an annual requirement for 240,000? Can he further confirm that this trend has been going on for at least the last 20 years?

A: It’s true that last year, housing starts were just below 100,000 at 98,020.  But actually, because of conversions and changes of use, there were 135,000 additional homes last year – putting net housing supply at its highest since 2008, an increase of 11 per cent on the previous year.

But as you state this isn’t a recent problem, This country has been building insufficient homes for years.  We inherited a paralysed housing market where housebuilding was at its lowest peacetime level since the 1920s; the result of building roughly half the homes we needed for more than a decade. This is why in 2011 we published a comprehensive housing strategy to tackle this problem from all angles.

Two years later and we have made significant progress. Everything that we are doing – reforming the planning system, working with councils and developers, providing financial incentives – is aimed at reversing these years of underinvestment. But it won’t happen overnight.

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    Was he asked about immigration or did he refuse to answer about immigration?

    Nothing else matters at the moment in regard to housing. There are 300,000 Romanian gypsies and others on their way and all of the houses being built will be needed to accommodate them.

    Since he does not even consider this a problem he is either incompetent, or a con-artist.

    Did the Spectator ask him about immigration? If not then why not? If he did not answer then why did he not?

  • majestic whine

    Important not to overstate this problem? Try telling that to the hundreds of thousands of people who can’t afford their own home because they are competing against BTL investors to buy a house.

    • monty61

      Yes but the minister says that’s exactly what he wants. More rentiers, more serfs. Thatcher’s ‘property owning democracy is dead’. You read it here first.

  • robin112358

    As is usual, there are no clear answers, as they would invariably upset someone (either house owners or first time buyers)

    For clarity, let’s look at the stated goals:

    (Q1) Are you trying to achieve higher or lower house-prices?
    (A1) He wants to keep house prices at the current, artificially high levels:

    (Evidence) [the] “most effective thing the Government can do to promote stability”
    [many people] “can’t scrape together the large deposits that are needed at the moment, so we’re offering a variety of complementary schemes to work around that”

    (Q2) Are you trying to increase or decrease the proportion of owner-occupied houses?
    (A2) He wants to decrease (!!!) the proportion of owner-occupied houses.
    (Evidence) “I’m also determined to make the Privately Rented Sector bigger and better. “

    • Iris Mabel Poster

      Too stupid to realise the implications of what he’s saying.

      Fewer homeowners means fewer Conservative voters.

      He’s determined to sign the Conservative Party’s death warrant like the rest of them.

  • Colonel Mustard

    I don’t like the look of this chap and I don’t like his slippery, evasive answers.

    Young British people need affordable homes, Mr Prisk. No more exploitation. No more inflation. And especially no more foreign landlords and property investors. Got it?

  • Peter Mindenhall

    Building more, whilst going a long way to help – is not the magic bullet claimed, and it will take quite some time for it to have any effect. In previous booms/busts building has still happened but prices have continued to rise (See: for stats).

    As pointed out in another comment here – buy to let is largely funded by mortgages, not hard cash – continuing to allow more pseudo cash into the market is what is keeping prices high – trying to counter high prices for first time buyers by lending them even more as wages stagnate is not helping anyone at all.

  • outdriveman

    I rather enjoyed this gem.
    Q: Is the Minister prepared to use taxpayers’ cash to support house prices at current levels and prevent prices returning to historic equilibrium of about 3.5 times single salary?

    A: Of course it isn’t right to use taxpayers’ money to encourage another housing bubble. But what we can do is help create the conditions for the market to work more effectively: so that builders don’t face problems building and would-be buyers can buy.

    Mr Prisk I totally agree with you that it isn’t right. Yet that is exactly what this government are doing. Nominal interest rates, QE, Funding for lending scheme to name a few initiatives. If the government allowed house prices to fall to the historic equilibrium we would be climbing out of this recession by now. Instead we are going to have years of pain and nothing to show for it.

    One last thing, Your homework is late by 2 months.


  • Daniel Maris

    We need a comprehensive housing strategy.

    – End mass immigration and housing benefits for economic migrants.

    – Ban sales of residential property to non-UK citizens.

    – Impose an infrastructure levy on immigrants to the country.

    – Give full priority to UK residents for social housing.

    – Support the development of housing co-operatives both for ownership and rent.

    – For each local authority area on local authorities outside London and the South East impose a legal duty to create a minimum of 1% of existing housing stock as new build/conversion over the next five years.

    – Impose rent controls on private lets – a reduction of 5% being imposed across the board.

    – Create super-cheap housing on brownfield sites in London and the South East for young people aged under 30: small apartments in which young people can purchase an interest which they can sell on, to enable them to then afford deposits for more traditional housing.

    – For local authorities in London and the South East and other high pressure areas, there should be local agencies created tasked specifically with creating new housing units through conversion of existing residential properties, new build on small plots of land, CPOs of derelict or vacant properties, conversion of retail and commercial units into accommodation, loft conversions, upper storey construction, and basement construction.

    – We should follow the Dutch example and be reclaiming land from the sea for the creation of new communities – probably off the East Anglian coastline would be an ideal area.

    • Tom Tom

      You forgot that only BTL gets Mortgage Interest Tax RElief

  • Hornblower

    Housing ladder? No its not, its a rope , a rope that first time buyers especially must cling to ,many end up with said rope tangled around their necks.
    If landlords are to be registered then it should follow that tenants must so be

    • monty61

      Agree that the concept of a ‘housing ladder’ assumes rising prices which we may not see much of for some time (indeed price reductions would be to the benefit of all but a few down-sizers and those who bought late (post 2006 or so) into the boom.

      I don’t follow the point about registration of tenants though – where is the connection? Tenants have to provide references already, and are credit checked. This is surely adequate.

      • barbie

        I agree, the tenants have to provide references in most cases, or guarrantor for rent. Its bad landlords who try to push up the rents as much as they can, now we have a ceiling on benefit payments rents may stablise a bit, unless they are made homeless. The government should bring back rent controls run by local councils like they provide departments for complaints which the taxpay pays for via the council tax. Which ever way something needs to be done. Foreigners should not be allowed to purchase more thant two properties, as the often do not have the funds to maintain them properly. Which in it’s self is a detriment to tenants.

      • Hornblower

        I fail to see any practical reason why landlords should be registered unless the Inland Revenue feel tax collection would be that much simpler . After all it is the landlords property the tenant rents and not the landlord .The landlord ,irrespective of his calibre must still comply with numerous acts of parliment in relation to the design and maintainance of his let property at the risk of heavy fines or even imprisonment

        On the other hand a prospective tenant can hide behind the Data Protection Act and make it near impossible to establish true backgound checks – talk to any landlord who has suffered the restoration costs following a Police drug raid ,cannibis factory , brothel. violent domestic dispute ,etc .A tenant ID card which revealed any of the above perils would be of immense value and in turn may help in tackling such behaviour

  • nicknuts

    “The most effective thing the Government can do to promote stability is to avoid the need for rapid increases in interest rates”

    So it’s OK to have a fake economy driven by these low rates producing fake house prices and other laws of consequence. FTBs are being conned onto the negative equity ladder. It will all end in tears.
    We need rates up to give decent people a decent deal, and the over indebted can watch out for themselves.
    This situation will not cure itself until rates are back to normal, and the bad debt is flushed out.
    Whatever happened to the Conservatives? Where did they go? We just have another Labour party in government. Thatcher must be looking at this bunch in disbelief.

  • pigou_a

    “right now, house building is higher than it was before the market collapse in 2008″

    Figures from the Minister’s own department suggest otherwise:

    Net additional dwellings (England):

    2002-03 143,680
    2003-04 154,770
    2004-05 169,450
    2005-06 186,380
    2006-07 198,770
    2007-08 207,370
    2008-09 166,570
    2009-10 128,680
    2010-11 121,200
    2011-12 134,900


    Housing starts in England were around 170-180k a year between 2003 and 2007. Last year there were 100,000 housing starts.

    I could go on, for example the latest GDP statistics for construction are catastrophic, but it’s just too depressing.

    It’s interesting that the Minster appears to think that attempting to mislead coffee house readers was a) ever going to work and b) a good idea given the existence of Google.

    I’ve a question for the minster: when they were developing the Localism act which genius thought that the biggest problem holding back the housing market was that local people had too little power to control development in their area? Which bright spark thought it would be a cracking idea to give local Councillors (typically 60 year old male home owners) more power to determine *cough* prevent any *cough* development in their area?

    Was it really too hard to liberalise the planning system? I thought the Tories were all for getting rid of red tape? How about protecting individuals’ rights to use their land as they wish?

    • telemachus

      As usual the Telegraph has this one right

      “Ed Balls has struck first in a battleground which will be crucial to the outcome of the next election. His conference speech promised 100,000 affordable homes, paid for using the windfall from the sale of 4G mobile phone licences. Mr Balls also offered a two-year stamp duty holiday for purchases below £250,000 in value.”

      • Iris Mabel Poster

        You are naive if you think Balls will ever deliver on that.

  • A K

    He is not answering the questions asked.

    -If there is a housing shortage the government should make every effort to get FTB on the ladder instead of supporting BTL landlords. When the market supply is so constrained it is not working efficiently and government has to support tenants and FTB instead of BTL landlords. A house should be for a family to live in and not for someone to profit.

    -He totally ignores the ridiculous house prices/rents and offers as a solution to the FTB/tenants the opportunity to get on the negative equity ladder.

    -He is in favour of low interest rates which have caused FTB/Tenants so much suffer with lower interest rates which since they do not allow our savings/deposit to grow and has released rampant inflation for the last 5 years. Obviously this is not enough for this government so they also want to subsidize the BLT landlords by stupid schemes like FLS.

    He is no more different than his predecessor and really he should be not participating in this interview if he cannot answer the questions. By not addressing these issues they have banked our economy into the ponzi scheme that UK property is and have allowed non-residents to buy all the property.

  • Tom Tom

    “Over the next year, England’s councils will share a cash payout of £661
    million for delivering 142,000 new homes ” which is why they are stuffing new housing onto green belt here when there are loads of empty houses which take years to sell……they build new houses at £400,000+ because the Government has decided inner city immigrants need bigger rabbit hutches yet the houses are built to feed developers love of Yuppies with big car and small condo disguised as a detached shoe box

  • Tom Tom

    Why do you think BTL is bought with “Mortgages” ? It can just as well be bought with Private Equity Funds when both KKR and TPG are moving into Residential Property in London. There are enough REITS and Funds which do not need “mortgages” so your 12% figure is specious

  • barbie

    I’m not satisfied what he says about bad landlords properties falling down round the tenants ears. In Councils now we have ‘private sector rented properties section’ where complaints are dealt with. Its costing taxpayers millions to run this departments. Why should we pay on our Council Tax for bad landlords. A register should be introduced and a licence given to be able to rent. Bad housing could then be denied the right to let until the houses are of rentable standard. Which would protect the tenants and the taxpayers, and fund this new departments cost. We do have laws in place, but they are rarely used, and the people living in these properties or those unfortunate to live next door, have to endure the problem each day. Landlords, often foreign ones will do anything to not keep houses up to standard, and the problem goes on and on. The property owner next door loses value and there’s nothing they can do. Who can afford to take people to court these days. It seems people have to lose value on their properties and pay the extra council tax to meet the costs.

    • monty61

      Spot on. But this is just parroting Cameron’s non-answer at PMQs this week. Was interesting he had nothing whatever to say when confronted with landlord regulation at PMQs, despite:

      1) Bad behaviour by landlords/tenant complaints going through the roof. That hilarious list of tenant T&Cs that went viral last week is a symptom of a widespread problem of arrogant amateurs out of control, no registration to help identify and control the bad boys. Dealing with this would bring much kudos, tenants outnumber the new ‘arrogant amateur’ Rachmann class by a huge margin. Barring politicians and tabloid hacks, BTL speculators are perhaps the most hated group in society (and with good reason taking into account the highly negative social consequences of their activities).

      2) Widespread tax avoidance by landlords – I know someone who works in compliance at HMRC, she says they have no process for identifying who should be paying tax on rental income, no list of landlords exists at all, they depend on tip-offs, hardly satisfactory and easily cured by a register. She reckons 10 to 20 per cent of landlords are on the fiddle, that’s a huge amount of uncollected tax probably in the many tens or even hundreds of millions, considering getting on for half the population now rent. Don’t they need the money?

      3) There’s a growing consensus on the inadequacies of the 30 year old short term assured tenancy arrangements which aren’t fit for purpose with twice as many tenants, the new phenomenon of HMOs, and an entirely different profile of landlord springing up compared to days gone by. Some of these people vote Tory you know (or could be persuaded to).

      Altogether something of a FAIL for the new housing minister whose prescription seems to be utterly lacking in either strategic thought or imagination.

      What I fail to understand is why come on Coffee House at all if the answers were always going to be so inadequate (sad, but predictable)? Volunteering was commendable, but the outcome has been utterly disappointing. Not such a bright idea after all.

      • Tom Tom

        Try McCarthy & Stone properties and the lousy T&Cs they have. People living in Static Caravans have better protection

  • Paul Turnbull

    So straight into the lies by Prisk then – that house building is higher than pre-bust 2008. I believe the only house building type that has increased since is that of council housing – and even the numbers are outrageously low. Overall house building levels (the figure that matters) actually collapsed under the coalition to the lowest levels in modern history.

  • Youbian

    What about why this is a problem to begin with? Immigration and too much demand.

    • Tom Tom

      Yes it is Public Subsidy of BTL through Mortgage Tax Relief plus Housing Benefit

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