– in the Senedd on 13 December 2017.
We now move on to the UKIP debate on modular housing and I call on David Rowlands to move the motion. David.
Motion NDM6612 Gareth Bennett
To propose that the National Assembly for Wales:
1. Believes that modular housing can be used as an innovative component in addressing Wales’s housing needs.
2. Calls on the Welsh Government to:
a) undertake a review of the planning process to remove red tape and barriers to individuals who wish to build their own modular home;
b) establish a housing development corporation to acquire brownfield sites at existing use value and using compulsory purchase if necessary, where such sites have been undeveloped for three years or more; and
c) develop a register of such sites and give priority on development to small-scale modular housing schemes, to incentivise individuals who wish to build their own home.
Diolch, Dirprwy Lywydd. Given the prevailing situation, I shall deliver the opening part of this debate on behalf of my fellow AM.
Today's debate is on the subject of housing need and how we can use the levers that we have in the Assembly to address those needs. A variety of different kinds of housing is needed to serve the interests of all the population of Wales. We in UKIP are not attempting today to offer any kind of wholesale solution to the housing problem—it is a complicated challenge that will require a multifaceted solution. Today's debate focuses on one aspect of housing, which is modular housing.
Our view is that modular housing does have an important role to play in providing for Wales's present and future housing needs. To be fair, the Welsh Government have recognised that and they have earmarked funds for the provision of this modular housing. So, we have established that this is an area where we can agree with the Welsh Government, to some extent. And today, they haven't, for once, given us an amendment saying, 'Delete all and replace with'. This is what they usually do with UKIP motions. In fact, Ross, our trusty researcher, has a printout on his desk stating, 'Delete all and replace with'. So, today, the Labour Party are not deleting everything we have to say—we are highly amused about that, as you can well imagine.
The main body of our specific proposals Labour has taken issue with. Understandably, the Government wants to draw attention to progress that they have themselves made in the field of modular housing. Our specific proposals were for a review of the planning process to remove red tape and make it easier for people who want to build their own home. We also wanted to encourage brownfield development, and we have proposed setting up a housing development corporation to help acquire these sites and use compulsory purchase orders, if necessary, to stimulate actual house building on those sites. Lastly, we want to establish a register of those sites and give priority to smaller-scale developments.
The Conservatives, in their amendment, appear to agree with the general theme of our motion, but have also diverged from us on some of the specific proposals, notably the need for the housing development corporation. They favour incentivising local councils and other public bodies that already exist, rather than creating something new. I will examine that specific issue later on in the debate.
One thing that we probably can all agree with is the need to build more homes in Wales. On the actual need for housing in Wales, there was some significant recent research by the late Dr Alan Holmans. He was the head of the Cambridge university's Cambridge Centre for Housing and Planning Research, he was a former senior adviser to the UK Government, and he was regarded by many as the pre-eminent expert in projecting future housing needs and demand. A report by Dr Holmans was published just after his death in 2015 stating that Wales could need as many as 12,000 affordable new homes a year. This is due to a variety of factors, including an unexpected increase in the number of single-person households. Just to recap, we have stated a variety of factors, of which immigration is only one. So, although in UKIP we will always point to the effect of uncontrolled mass immigration on the housing market, we by no means say that it is the only one.
I've used the term 'affordable housing', so I better explain what I mean by it. It refers to social housing or housing in the private rented sector that is affordable to people whose needs are not being met by the normal private housing market. The monthly rent of affordable homes should not cost more than 80 per cent of the average local market rent. Dr Holmans's figure was 12,000 new affordable homes a year; the Welsh Government have come up with a target of 20,000 affordable homes, but this is spread over an entire Assembly term. This will effectively mean 4,000 per year, which is a long way short of Dr Holmans's figure; in fact, it's only a third of the projected need.
In 2014-15, just over 6,000 new homes were built in Wales, and we have to put this figure into some context. Fifty years ago, in the 1960s, the construction industry was building around 20,000 homes a year in Wales. So, we are now building much smaller numbers of houses, and the balance between private and council houses has also changed. In 1955, over 70 per cent of all new homes were built by the public sector in the form of council houses. Today, that situation has reversed, and we now have over 80 per cent of new homes being built by private developers.
Many councils have large waiting lists, and many people would state that this means that we face a housing shortage, perhaps even a housing crisis. Of course, we've had housing shortages before in the UK, and we have come up with innovative means of tackling those shortages. There was a shortage of decent-quality homes immediately after the first world war and again immediately after world war two. On the latter occasion, the solution was prefabricated houses, or, as we all knew them, prefabs.
In the six years after the war, 150,000 prefabs were built. They were only designed as a temporary solution, with an intended lifespan of only 10-15 years. Many of these prefabs lasted a lot longer than their intended life; there are some still standing and still occupied that must be at least 65 years old. Many people who lived in prefabs swore by them and proclaim that they were just as good as any other form of housing.
With these prefabs, there was a move away from brick, using instead timber frames, steel frames and aluminium frames. There are indeed certain similarities between the postwar prefabs and modular homes that are going up, albeit in small numbers, today. Modular homes are built in sections in a factory setting, then transported to the site. There, they are placed on a pre-made foundation, joined and completed by the builder.
With modular housing, a significant percentage are timber framed with a concrete base. They are relatively bespoke, and purchasers can request that additional features be incorporated into the design, such as plaster and glass components. The idea is that the parts can essentially be bolted together. The components come in the back of a lorry and are put together onsite. It's like one big flat-pack house.
Modular homes can be built quickly and efficiently, with the ability to add on to the property later. As the buildings contain embodied energy, which is locked into the fabric as a result of the construction process, they represent a uniquely sustainable form of construction. In the case of traditional buildings, this energy is lost when the house comes to be demolished. In the case of modular builds, though, the embodied energy is preserved when the building is relocated to another site, thereby reducing the impact of landfill.
There are various types of modular homes. They can include, for instance, zero-carbon homes, which are dwellings that have no net carbon emissions from their energy use. This can be achieved through reducing their energy use using renewable energy, or a combination of both. So, features could include solar-panelled roofs and special insulation panels. As I stated earlier, most modular homes are likely to be energy efficient in any case, due to the sustainable materials that are used to construct them. But incorporating some of these other features would mean that you could have modular homes that also qualify as zero-carbon homes. In theory, some of these could actually generate more energy than they use, and could end up exporting energy to the national grid. Some Members here today have seen this in action at the SOLCER house project, constructed by the Welsh School of Architecture, which is Wales's first low-cost smart energy house.
Another relatively new idea is the shipping container home. These can be commissioned very quickly with manufacturers claiming that they can move from receiving their order to delivery in less than four weeks. The units are modular and can be stacked or placed side by side, or back to back, to either extend the living space or to create blocks of units. In Bristol, a project has been under way for about a year to help 40 homeless people through the provision of container homes. Bristol City Council have given them a plot of land to secure the future of the project. The Welsh Government have indicated that they feel the shipping container idea could help with the homeless problem in the short term.
Another type of modular home is a self-build home. A survey conducted by the Building Societies Association in 2011 suggested that 53 per cent of people, more than half the population, would consider building their own home given the opportunity. On one of the UK's leading plot-finding websites, there are currently wanted adverts for 60 self-build homes in Wales. The UK as a whole has had a much lower rate of self-building than other European countries. The sector makes up less than 10 per cent of new builds here, whilst in Austria it is some 80 per cent of housing completions. In France, it is close to 60 per cent, and the same applies in Germany and Ireland. In the USA, it is 45 per cent. The Netherlands is closest to the UK in western Europe, but even in the Netherlands the total is close to 30 per cent.
In England, under the Housing and Planning Act 2016, local councils have to consider how they can best support self-build. There's no such obligation on local councils in Wales currently. In 2013, a report by the University of York identified a series of challenges to self-build projects. These include land supply and procurement, access to finance, the planning process and general regulation and red tape. On the important issue of finance, lenders tend generally to perceive self-build loans as a higher risk. There's currently no Welsh Government grant available to people who want to self-build.
The Welsh Government did relax some planning requirements to enable the development of Lammas, a rural eco-village in north Pembrokeshire, so there has been some flexibility in this field.
We appreciate that the Welsh Government is doing things in the field of innovative housing. We aren't trying to have a go at their endeavours. That isn't the purpose of today's debate; we are just floating the idea of some specific proposals that may help to achieve the aims that we all share of providing more and better affordable houses in Wales.
We want to review the planning process so that we can remove some of the red tape. So, what they have done in north Pembrokeshire we'd like ideally to extend to the whole of Wales. We'd ask for the same obligation on local councils to allocate land for self-build projects that they have in England, so there would be a duty on councils to set aside plots for self-build in their local development plans.
Land banking is a problem that has been acknowledged by the Welsh Government. Finance Minister Mark Drakeford has floated the idea that taxation powers could be used to tackle the problem of land banking in the form of a vacant land tax. Now, that is a tax proposal that might well attract support from UKIP, because we want to ensure that where land has been purchased housing development does take place in a fairly short time period. But, we will await the specific tax proposals from Mark Drakeford and we haven't put anything down in the motion today on that issue.
What we have called for is a housing development corporation so that brownfield sites can be purchased quickly and cost-effectively. We think that an organisation set up with specific expertise in the field of property can help facilitate building on brownfield sites. Compulsory purchase orders, or CPOs, could be used to acquire these sites if there was no development within a period of three years. So, that could be an alternative to the idea of taxing vacant sites, or they could possibly work together.
We need a body to identify these sites in the first place, so our final proposal is for the housing development corporation to also compile a register of relevant brownfield sites that could be developed in Wales. So, those are our proposals and we are eager to hear what other Members think of them, so we avidly await your responses.
Thank you very much. I have selected two amendments to this motion. If amendment 1 is agreed, amendment 2 will be deselected. So, I call on the Minister for Housing and Regeneration to move formally amendment 1, tabled in the name of Julie James.
Amendment 1. Julie James
Delete point 2 and replace with:
Recognises:
a) the Welsh Government’s decision to start building new models of housing in 2017-18 through its Innovative Housing Programme;
b) that, of the 22 schemes approved for funding under the programme this year, 7 will be built using modular techniques with programme support totalling £5.6 million;
c) that a further £71 million will be available between 2018-19 and 2019-20 for the programme to build even more homes;
d) the welcome extension of the Property Development Fund to £40 million which will support SMEs to build more homes including modular housing and help to bring forward housing sites at an increased rate.
Formally.
Thank you. I call on David Melding to move amendment 2, tabled in the name of Paul Davies.
Thank you very much, Deputy Presiding Officer. Can I thank UKIP for bringing this debate forward? I think it's actually a very important subject and is a way of tackling the housing challenge in Wales. I hope that we develop a level of consensus beyond our usual, conventional, traditional house building methods.
I was very pleased, actually, to notice that even the Welsh Government seems to be moving a bit in this area. In the statement in October that introduced the innovative housing programme, one element that was included was modular housing. So, I think we are pushing at an open door, to use an appropriate colloquialism.
In my response to that statement, I did speak about how I hoped the Welsh Government would undertake more modular house building. I'm pleased to see that UKIP have picked up on this also and share a vision for its greater use, particularly in some of the changing circumstances and the urban communities that we're now seeing develop, partly in response to the new type of housing that we do require.
As has already been alluded to—. Overall, I wanted to be as constructive as possible with the motion, so I've just amended it where we absolutely do have a slight issue, and that's the proposal for a housing corporation, aiming to bring in much more brownfield land. I completely share the objective, but I think this is a rather bureaucratic way of going about it and I think there are plenty of levers for Government to do this and they need to get on and achieve better results, I think, in terms of land supply. And it's not just brownfield sites, but they are an important source.
We need to build on—. Obviously, we need to release more land if we're going to see more house building. It really is important that we look around and are creative and look at the public sector. Lots of land is fairly redundant or could be used more innovatively and more economically, therefore releasing land for development. So, that was the reason we amended the motion.
As David said, modular housing, or what we used to call prefabs, has a very noble record. It was a central part of solving the crisis of post-war house building. The challenge they faced was just beyond anything the nation had experienced before because of the destruction in the second world war. Vast numbers, which David outlined, were built. I think that, when we look at the opportunities today, we should reflect on the role it had then. Many of the housing units that were built were innovative for the time, and they were popular—a point David made. I remember campaigning, against Jane Hutt I should say, in a whole street of prefabs that still survived in Barry, and the residents were very happy with that way of living. It was really quite a convenient layout. I was shown around. I'm not sure the person voted for me, but there we are. [Laughter.] I was never successful in either election I fought there. But it does show you that these methods can be absolutely sector-leading, and today even more so in terms of speed of construction and cost—about twice as quick and half as expensive. There are a lot of innovations as well—new materials, less energy-dependent and they can also lead to this incredible SOLCER experiment, where you actually generate energy from the house rather than consuming it. So, there are a lot of opportunities there.
I think it also allows us to look at the possibility of higher density developments—not high-rise—where there are more shared facilities, for instance. Not everyone wants a garden to maintain. I've often said to people when you go to posh areas in London, like Belgravia, they all have a key for the central garden; they don't have their own garden. It's regarded as a great social advantage to have access to those gardens. So, there are ways of building family-sized homes very efficiently and possibly, potentially, eliminating fuel poverty because you'd actually be getting money back from your home.
Can I just say in conclusion, Deputy Presiding Officer, that SMEs are very well placed to take advantage in this sector? Also, the shortfall we have in some building skills would be addressed more quickly in this sector. There are a lot of opportunities there. I do think they've been unloved for too long, and we should see that it's time for a renaissance in modular building. Again, I thank UKIP.
Putting an end to homelessness is one of the key reasons I entered politics. As recently as Monday night, when I attended an event in Cardiff, I was confronted with the sad situation of two gentlemen, homeless, in need of a cup of coffee. In the twenty-first century, homelessness is morally reprehensible. In the prison service, I saw many young men who committed crimes simply to have a roof over their head and hot meals served to them, while other poor souls had been arrested for vagrancy.
Whilst the causes of homelessness are many, the main contributor is the lack of housing. We simply aren’t building enough new homes, particularly affordable and social housing. Experts predict that we need to build around 12,000 new homes a year, yet less than half that number are being built. This lack of housing has resulted in 2,652 households becoming homeless between April and June of this year, and saw nearly an additional 2,000 threatened with becoming homeless within eight weeks. There are around 2,000 households in temporary accommodation, and over 200 of those are in bed and breakfasts. Thirteen per cent of those in B&Bs were families with children. This is totally unacceptable. These families need homes urgently, yet there isn’t enough social or affordable housing to meet that need.
The Welsh Government has a target to build around 4,000 affordable homes a year, yet only three quarters of that amount were built last year and they are relying on the private sector to build over a third of affordable housing in Wales via section 106 agreements.
Private developers tell us that they are being hampered from building more homes due to red tape and an overly bureaucratic planning system. They also state that there is an inadequate supply of land and additional costs as a result of building regulations and the method of providing affordable housing on new developments. Simply put, Wales is a less desirable place to build houses due to this. This has to change if we are to end homelessness; we have to make it easier to build homes, not harder.
In England, the Government have started looking at using prefabricated housing to meet demand. This has long been a UKIP policy. Prefabricated, modular housing is a quick and cheap solution to addressing housing shortages. It was the use of prefabs that helped address housing shortages following world war two. Many people were critical of post-war prefabs, but I can assure you, as someone who lived in one growing up, they were loved by all of those who called them home.
Modern modular, prefabricated housing is much more advanced than prefabs of the past. They can be constructed from eco-friendly materials and are highly energy efficient, saving home owners money on electricity and heating costs. They are flexible, as they can be completely tailored to the needs of the home owner and some types of modular home can be reconfigured to meet future need. But above all, they are cheaper and faster than traditional construction to erect. A two-bedroomed home can be built for around £50,000 and installed in days—well below the construction costs of a traditional property, which can take up to a year to build.
There are plenty of companies offering modular prefab housing. The barrier is finding land to build upon and the length of time it takes to get planning permission. If we are to address the housing shortage in Wales, then we have to look at flat-pack homes and make it easier to reuse brownfield sites for modular housing.
I urge Members to support the motion before you today and for the Welsh Government to begin a prefab revolution in Wales, where people cannot only own their own home, but also play a role in its design and building. We need solutions that will put an end to the necessity of placing families in temporary accommodation; put an end to children spending Christmas in a cramped B&B.
This is part of that solution and I ask you to support it. Thank you. Diolch yn fawr.
Could I say at the outset how appalling UKIP’s comments were yesterday about minority rights? Members of minority groups have an inalienable right to be treated equally, whatever their gender identity or sexual orientation or the colour of their skin or their religion or disability or anything else. I hadn’t ever—[Interruption.]
Sorry, can I—?
Point of order—
Just a moment, can I ask you—? Sorry. I'm speaking.
—expected to hear such a foul opinion in our Senedd.
Sorry. Could I ask you—? You must stay to what's on the order paper for the debate.
It's very relevant.
No, I'm sorry, I'm ruling. I don't need any help from anybody, thank you very much. So, can I ask you to stay on modular housing and not stray away from that, or you will be outwith Standing Orders?
I move on to the subject at issue. The method of providing low-cost, affordable housing is one of the great challenges that face this Government. Certainly, modular housing can be a useful tool in increasing the housing supply in Wales, and brownfield sites are appropriate for housing developments.
But, a word of warning about some aspects of this: historically, modular housing has been seen as poor-quality housing, with restrictive value in terms of resale. This, therefore, can create problems for first-time buyers with low deposits, and problems of having access to funding. The industry is trying to change that perception, but it shows that we need to give full consideration to how we help people to fund the purchase of such homes. There is also concern about the longevity of this kind of housing and, once again, we have to ensure that this has consideration in the funding arrangements.
Secondly, we need to be careful about these housing developments and be careful that not only one kind of house will be built—a house that would be appropriate for only some residents. Mixed communities, where families with variable incomes live together, offer better social outcomes. There is a lot of evidence for that. We need to think about that as we plan new housing estates, as well as the design of those estates. In addition to that, public services, including active travel requirements, must be part of any development, but that’s not what happens very often, and I’m aware of one housing development that is next to a school, and yet that school is already full. So, there is a challenge facing families moving there to live.
Now, modular housing can be part of the jigsaw that will meet the demand for housing, but we must also cover other parts of the jigsaw: to start with, eco-housing, although I’m not sure if a party that denies climate change would share our enthusiasm in Plaid Cymru for eco-homes. Clearly, eco-friendly homes with low energy bills do fit into the category of affordable homes, and also fit into the category of high-quality housing as well as contributing to reducing the carbon footprint. Secondly, we need additional care homes in order to meet social care requirements. There aren’t enough of these homes built, and they are essential to assist those people who have care needs and wish to live independently.
And, finally, we need to recognise what ‘affordable’ truly means and to acknowledge that affordability relates to income. Clearly, instability in terms of working arrangements, as well as low incomes, makes it difficult for households to put funding to one side to purchase a home. What is affordable in one area certainly is very different to what’s affordable in another. I have a member of my own family who lives in Abersoch, where an affordable home is way beyond what would constitute an affordable home in an area of the Nantlle valley or Arfon, and is beyond reach and can’t be described as affordable, if truth be told. The main problem with affordability is the fact that the percentage of young people earning an average national income has reduced, and there won’t be much increase in real-terms salaries, whilst, at the same time, a higher proportion of salaries go towards paying rent.
This leads to my final warning: if we do want to see more modular homes built, we must ensure that they won’t be purchased by buy-to-let landlords. That can also create numerous problems. So, briefly, yes, there is room for this kind of housing, but only as part of a comprehensive package of different kinds of affordable homes.
Thank you. Can I call on the Minister for Housing and Regeneration, Rebecca Evans?
Thank you. I think this debate has been very useful and very positive, and I hope I'm able to respond in similarly useful and positive terms. I'm really glad to have this opportunity to talk about the exciting work that we're doing to find new and creative solutions to Wales's pressing housing needs. Our innovative housing programme is designed to test new ways of increasing the supply of affordable homes and get them built more quickly, whilst also reducing their impact on the environment and lowering their running costs.
In a statement to the Assembly on 24 October, Carl Sargeant announced the 22 schemes to be funded under the first phase of this programme. We know that good-quality, affordable housing is fundamental to people's health and well-being, and we can't accept that people in today's Wales should have to decide whether they heat their homes or eat. Finding new models of housing that significantly reduce heating is a priority, and homes that can also generate income from surplus energy are now a real possibility. And, indeed, some schemes funded this year include the active homes scheme in Neath Port Talbot, which is about using homes as power stations, and that's being delivered in partnership with Pobl housing.
I want to develop new methods of building that increase supply and speed up delivery. I want to see excellent-quality, affordable homes that are less damaging to the environment—and, listening to the debate here today, I think that we share that vision. I agree that modular homes do look very promising, and appear to offer the sort of benefits that we're all looking for. There are seven modular schemes being funded in the first year of the programme, providing 91 homes, and we'll continue to fund a range of new models in 2018-19 and 2019-20.
The motion today focuses on the potential use of modular housing by individuals building their own homes. That may be one aspect of its potential, but concentrating on that alone ignores the need for scale and the wider opportunities in harnessing this approach. Modular building is particularly cost-effective when it is produced in large volumes, and could, when combined with our investment in new social housing, provide an opportunity to develop a flourishing new industry with a series of manufacturing facilities and new jobs across Wales. This is an opportunity to refresh the housing supply chain in a strategic way, and that's why I want to test out a large number of different modular build types over the next couple of years—so that we can be sure that we find the right solutions for Wales. I'm therefore very pleased to say that the innovative housing programme's budget is now £90 million for the three years between 2017-18 and 2019-20—£70 million more than initially announced in February.
Raw materials are also a key part of the supply chain, and I'm really keen to look at how we might use more Welsh timber and steel in modular housing. We have a lot of both materials, so there are real opportunities here for us in Wales. Reflecting on the debate we had earlier this afternoon, I do sense that there is also a real appetite for this.
Please be assured that the Welsh Government is certainly keen to help to bring forward land for housing and find ways of enabling small developers and self-builders to do more. But we do not accept the specific prescriptions contained in the UKIP motion. The Conservative amendment calls for incentives for identification of sustainable brownfield sites. I'm actively looking at how we can help to bring forward stalled sites across Wales, and I hope to make an announcement on this very soon.
The Development Bank for Wales can play a key role in both unlocking stalled sites and also bringing Welsh SMEs back into the market. These are two particular areas that I've taken a strong interest in early on in my time in this portfolio. So, I've therefore allocated an additional £30 million of loan funding to the bank through the property development fund. Alongside our initial investment of £10 million, we will recycle and reinvest this funding over 15 years, meaning a total value of £310 million can be achieved.
We have a co-ordinated approach to land sites and their use to help address housing need. We're developing a register of all public land in Wales and some local authorities are already compiling lists of brownfield sites suitable for self-builders. So, we're looking at all options. We are, for example, looking at sites where the land is pre-prepared for development, with planning consent in place. This approach can allow people to choose the type, style and cost of homes that they want by selecting from the pre-agreed designs. This is just one of a number of ideas being explored, and it is still at a formative stage, but I do think it illustrates the serious thought and creativity that we are bringing to this challenge.
I'm very pleased that, despite the obvious differences between our approaches, there is nonetheless a very clear shared recognition of the need to use fresh approaches to tackling our housing needs. Welsh Government is funding the exploration of a broad range of methods. I don't believe that now is the time to single out one technique or identify self-build alone as the way forward. We have to be bolder than that, and more open to a range of new ideas, learning from innovation and refining our approach as we move forward. Thank you.
Thank you very much. I call on Neil Hamilton to reply to the debate.
Thank you, Deputy Presiding Officer. I'm pleased to reply to the debate and to welcome the speeches of David Melding, Siân Gwenllian—95 per cent of it, at any rate—and Caroline Jones, and indeed the positive speech from the Minister. Because we do accept that the Government is doing some useful things to help to solve the housing shortage, but, given that on present population trends the United Kingdom will have another 15 million people within the next 35 years, clearly there is going to be a massive problem if we don't substantially increase the number of houses built all over the country, and that applies to Wales as much as anywhere else.
When I was a very small boy my parents and I did live in a prefab, and my mother always said, to the end of her life, that actually it was the favourite of all the houses that she lived in. So, I think that, as David Melding pointed out, the future, in a sense, lies in the past on this. And I think that the note of consensus that we had during the course of the debate is much to be welcomed—not something that is always associated with my party. But I'm pleased that Gareth Bennett did actually open the debate in words, although the voice wasn't his. It was his speech.
Thank you very much. The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Thank you. Therefore, we will vote on this item in voting time. I propose to move to voting time unless three Members wish for the bell to be rung. Everybody happy? Fine.