Housing and Planning Bill

Baroness Royall of Blaisdon Excerpts

Tuesday 1st March 2016 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, I am pleased to support my noble friend Lord Tope on these amendments, particularly the provisions that the noble Lords, Lord Best and Lord Kerslake, spoke to. I also have some sympathy for what the noble Lord, Lord Lansley, said about the need to widen the definition of these starter homes so that we look at alternative models of affordable homes that can be approved by the Secretary of State. We will debate later in Committee whether the starter homes initiative will lead to balanced and mixed communities, and the implications of that, about which I have severe doubts. We are also going to discuss the wider issue of the impact on social housing provision, and I declare an interest as chair of Housing & Care 21.

This model of starter homes will not apply to huge areas of the country; people there will not be able to benefit, as the noble Lord, Lord Tope, explained. Although the main aim should be to build more homes, if we genuinely want to increase ownership we must look at more than one size fits all. The Government may find, if they concentrate overly on starter homes—I understand that they are doing that because it is a convenient target to get people moving—that the type of houses we are building in the long term become unsuitable.

There are two aspects of this that are quite an issue. Frankly, too many starter homes in one local market could cause market distortions, both initially, when they are trying to sell these homes, and at the end of the five years, when the purchaser can effectively take advantage of the discount. This concentration of building of starter homes will both put off lenders from lending on those houses in those areas and may well deter developers from developing sufficiently fast, as they would where they were developing more mixed tenures and different forms of owner-occupation. The communities themselves will be very unbalanced.

The amendment is an attempt to achieve greater diversity of products, which may make homes more affordable and achievable, and, by varying the nature of the home ownership, deter what could otherwise lead to quite severe distortions of the market. If we distort the market, we will put off developers and lenders, and end up not building as many homes as we need.

[Baroness Royall of Blaisdon (Lab)]

My Lords, like the noble Lord, Lord Tope, who introduced the lead amendment, I believe that there is enormously wide concern about this aspect of the Bill, and I certainly support this group of amendments.

As we have heard, Chapter 1 refers only to starter homes. The Bill’s demand that starter homes should carry the whole focus of housing provision means that localism and local decision-making is absolutely fettered. The fact that absolute priority is given to home ownership and starter homes is wrong. Of course, there is a place for home ownership, and I want everybody who aspires to own their own home to do so, but, whether we like it or not, many people will never be able to own their own home, and some do not wish to.

The noble Baroness, Lady Redfern, who is not in her place, spoke of the need for people to own their own homes to provide their families with stability. Most families would like a roof over their heads to provide them with stability, and that may well mean affordable rents and affordable homes. They do not necessarily have to own them. Like the rural housing group, I believe that the proposals, with their emphasis on starter homes, will undermine future provision of affordable housing in rural communities.

As we have heard, in many areas, including Cambridgeshire, even starter homes will not be affordable for many people. Shelter tells us that people in only 2% of local authority areas will be able to buy their own homes, even starter homes. In Gloucestershire, where I live, the median income for residents in 2014 was £20,935 per annum. Even with a substantial £20,000 deposit, that would be insufficient to buy a property in most villages, with or without a 20% discount. I understand what median means: for many people who I know, that income is a king’s ransom. The living wage is about £14,000 per annum. There are so many people who will simply not be affected by the Bill.

The noble Lord, Lord Lansley, mentioned that, at Report in the other place, the Minister talked about other forms of home ownership, which is encouraging, because other forms of home ownership can help people who cannot afford to buy their homes outright. Perhaps the Minister can tell us whether the Government intend to make it explicit in the Bill that they are in favour of other forms of home ownership, not just starter homes, because they cannot be the be-all and end-all.

The noble Lords, Lord Best and Lord Kerslake, mentioned the history of starter homes, which were a glorious idea devised by people thinking up innovative policies. That is great, we need innovative policies—but as the noble Lord, Lord Kerslake, said, they must be tried out first. A policy which looks good on paper cannot suddenly become the main focus of a Bill; that is entirely wrong. I hope the Government will recognise that more thought needs to be put into the policy.

The concentration of starter homes could indeed distort the market, as others have said, and provide an imbalance in our communities. I simply do not think that the focus on starter homes in the Bill provides the solution that we need to the housing crisis in this country. We will come on to many other things in that area later, but starter homes cannot be the be-all and end-all. They can be one part of the recipe to provide a solution to the current crisis, but they cannot be the only answer.

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We get the feeling in this debate that the Government see starter homes as the panacea to deal with the housing crisis. I, along with many of my colleagues, do not believe that this policy will sort out the problem that exists. We need far more innovative thinking, as the noble Lord, Lord Horam, suggested. We need new packages and new ideas. This is an old idea; it is subsidised housing ownership. It will not resolve the problem and I positively support the amendments moved by the noble Lord, Lord Tope, because they seek to address the issue of defining what is actually required.

[Baroness Royall of Blaisdon]

My Lords, I hope I will be forgiven for intervening again. The noble Lord, Lord Horam, mentioned a meeting with the Minister which I regret I was not able to attend. He mentioned some modelling which civil servants were doing on the impact of this policy. Will the Minister say when we are likely to receive further information about that modelling and what the recommendations are? As I have expressed in this House before, I think it is invidious if we are asked to proceed with this Bill without seeing some of the key regulations tabled by the Secretary of State. We cannot be expected to make such important policy which is going to affect the lives and well-being of so many of our citizens if we are not able to see the outcome of the modelling and whether or not this Bill is evidence-based in any way.

[Lord Horam]

Perhaps I can just explain that the Minister was not present at the meeting. She kindly arranged for her civil servants to address technical questions. I asked what modelling had been done on the financial and supply effects of the legislation and the civil servants were kind enough to say that the modelling was not finished because certain decisions had not yet been taken. The definition has not been finalised and therefore they could not give me an answer. I raised the question in the House because I think it is important, as we go through the Bill, that we address these questions if possible.

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[Baroness Williams of Trafford]

If that is what noble Lords would like, that is what we will do. I just wanted all noble Lords to be satisfied that, if they wanted to speak to an amendment, they had the opportunity and I was not just running roughshod. If I miss out any contributions from noble Lords, please have a bit of sympathy with me because this has been quite a significant debate.

I thank my noble friend Lord Lansley, the noble Lords, Lord Best and Lord Tope, and the noble Baroness, Lady Bakewell, for the amendments. I support the intention behind them, which is to highlight that other home ownership products as well as starter homes can serve the needs of first-time buyers. I hope that I can refer to that in my comments on funding and on the Bill, but I hope that noble Lords will feel that the amendments are not necessary, as I will explain.

Amendment 46A from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell, Amendment 47A from my noble friend Lord Lansley, and Amendment 47B from the noble Lord, Lord Best, all seek to extend the duty to promote starter homes under Clause 3 to other forms of home ownership. Amendment 48D and associated amendments from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell, seek to change the starter home requirement under Clause 4 to cover home ownership more broadly.

There was a question from, I think, the noble Baroness, Lady Hollis, about whether everyone aspires to own their own home. There is evidence that the vast majority of people—some 86%—aspire to own their own home. We are determined to extend the opportunity of home ownership to hard-working families by measures aimed at doubling the number of first-time buyers. We believe that shared ownership and other home ownership products have an important role to play as part of the diverse and thriving housing market in helping those who aspire to home ownership but who may be unable to afford it.

[Baroness Royall of Blaisdon]

My Lords, how does the noble Baroness square that circle? It is great that the Government wish to ensure that everybody who aspires to own their own home can do so, but the figures that the noble Baroness gives do not match the figures that we have quoted around the Chamber on the finances that individuals and families have. Even with the 20% discount it is clear that the vast majority of people in this country are unable to buy the starter homes.

[Baroness Williams of Trafford]

I was going to come on to that later, but I will deal with it now. Excluding London—I absolutely appreciate that London is a different case—the average price of an affordable home will be £145,000. A couple on the mean wage in this country, £26,000, would be well able to afford a starter home or an affordable home. The point I am trying to get at—and I appreciate that not everyone is on the mean wage, because by definition there will be a lot of people under it—is that there are other products available, such as shared ownership. Outside London, it is estimated that the deposit required for a shared-ownership home is approximately £1,400, but there may be people unable to access even the shared-ownership home market. We have announced £1.6 billion to put into 100,000 affordable homes for rent. They are examples of what products are available within the various affordability brackets.

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[Baroness Williams of Trafford]

That is fine. I just thought I would set that out now. I know we will be talking about it later.

The noble Baroness, Lady Bakewell, talked about Clause 2(3) and the Secretary of State specifying in the regulations further characteristics of first-time buyers. She asked when the characteristics will be agreed. We have taken a power to specify additional criteria in regulations to provide the Government with some flexibility as to who should be eligible and we intend to consult shortly on what criteria should be applied. This forms part of a wider consultation on the aspects of starter home regulations to be introduced later this year.

Starter homes are a new product and, although we have debated the merits and demerits of them being so prominent, we want to ensure that councils are delivering on the key manifesto commitment. The electorate will expect us to deliver on this commitment, and for this reason we want the starter homes clauses to focus on starter home delivery, as I have pointed out.

The noble Lord, Lord Horam, asked about the impact on other forms of housing. We will be consulting on the starter homes requirement under Clause 4 shortly. I want to reassure noble Lords that councils will still be able to seek other forms of home ownership from new development, as I have previously stated, once this requirement is in place. These clauses do not switch off the abilities of councils, as I have pointed out, to secure other forms of alternative home ownership products, just as previously the affordable housing duty did not switch off other housing home ownership products. We expect them to actively support starter homes, but it does not remove their ability to deliver home ownership products, as I have pointed out.

The noble Baroness, Lady Bakewell, asked how people will get mortgages. In January, house prices increased by 2.5% in England and Wales, with annual house price inflation increasing from 6.4% in December to 7.1% recently. The number of mortgage approvals has actually grown by 42% since April 2010. Noble Lords will recall that last week I was asked about the decline in home ownership. Actually, for the first time in seven years, home ownership is in fact increasing, so that probably demonstrates that people are buying and lenders are lending.

The noble Lord, Lord Greaves, asked about the target for owner occupation. As I stated previously, we want to double the number of first-time buyers within this Parliament.

I will now talk to Amendment 50G, on the monitoring arrangements, and why I think it is unnecessary. We need to ensure that the monitoring arrangements reflect the delivery of starter homes for first-time buyers so that there is a transparency about delivery and that first-time buyers are aware of the measures which have been taken at the local level to deliver on supply. Councils already have to report on market and affordable housing supply through their authority monitoring reports, so I do not think that the amendment would serve any useful purpose.

That is also true of Amendments 53A, 53B and 53ZA, which all seek to amend the compliance direction. The compliance direction is only intended to be used in extremely limited circumstances. To keep its scope narrow by focusing on starter homes provides a clear sanction for the circumstances where the local planning authority is in breach of its starter home duties. We envisage that it would be rarely used but would act as a strong incentive to deliver starter homes in accordance with the provisions in the Bill.

It has been a long debate, and I hope that it has provided—

[Baroness Royall of Blaisdon]

I am terribly sorry—I know that it is dinner time and people are anxious to move away from this debate—but my frustration in terms of regulation and consultation is mighty. I do not blame the Minister because this is a blight on many Governments. The noble Baroness mentioned twice the consultation that is about to begin on starter homes. Why start the consultation now? We will finish this Bill, I presume, around Easter, by which time we will not have had the results of the consultation and the Government will not have been able to shape their policies in relation to the consultation. Either it is a sham consultation—that does sometimes happen—or, what is the point?

[Baroness Williams of Trafford]

I understand the frustrations of noble Lords, and I feel a degree of frustration myself. It is not a sham consultation, I can assure the noble Baroness. In terms of regulations generally, I have on numerous occasions elected to provide to the House details on regulations as soon as I could. I hope that the noble Baroness is somewhat reassured by that and that noble Lords will feel free to withdraw their amendments.