Lord Lansley
Main Page: Lord Lansley (Conservative - Life peer)
Lord Lansley (Con)
My Lords, I will speak to Amendment 36B, just moved, and refer to Amendments 47A and 53A in my name. I draw attention in the register of interests to my unremunerated position as chair of the Cambridgeshire Development Forum, which is a group bringing together those people who wish to support development in the area in which I live—an area which exhibits many of the characteristics that are most at the heart of this debate: a very high level of demand for new homes and a relatively high and accelerating price for new homes in and around Cambridge.
By virtue of the order of consideration, we are having this discussion ahead of what I would have preferred, which is a discussion about the definition of a starter home. We will come to that in a later group and I will talk to that later, if I may. If we had the clarification of the definition of a starter home that I am personally seeking—not least in an amendment I have in a later group—the requirement for amendments to Clauses 3 and 5 would fall away. I very much support the Government’s intention to promote starter homes and give young people the opportunity to buy their own home. I mean it as simply as that: building new homes with the objective of giving young people an opportunity to own their own home. The question is how we go about that and whether we should have not only a general duty but specific requirements for it. I am in favour of that and support the Government.
However, the definition of starter homes is narrow. In the context of this group of amendments, the issue is that in places such as Cambridge and the surrounding area, where I live, it is extremely difficult for many young people to afford a new home. Across the country generally, we have seen the amounts that young people have to acquire for deposits accelerating—perhaps doubling—in the last decade. We know that to buy a house outright with a mortgage, they are very often looking not only for a substantial deposit but for family help. The Council of Mortgage Lenders suggests that more than half of young people buying their own home now need family help to make that happen. Almost by definition, therefore, it is exceedingly difficult for young people seeking to buy their own home rather than rely on other forms of tenure to succeed in doing so if they do not have family income to support them or, certainly in my area, incomes in excess of some £70,000 for a couple trying to buy a home together. That is one of the reasons why the Government have made it very clear, as they did on Report in the other place, that they,
“strongly support the need for a range of products to improve access to homeownership”.—[Official Report, Commons, 5/1/16; col. 151.]
I completely support the Government in this. However, the noble Lord, in moving his amendment, was clear that there are other schemes and significant government financial support to promote other means of securing home ownership. We should not dismiss those.
However, the issue in this legislation, especially in Clause 3, is whether a local authority should have a duty to promote the supply of a particular form—a subset as it were—of the homes that young people might aspire to buy, through various routes. We instantly get into difficulty there. The Government are clear, through the structure of Clause 3, that this does not impede the local authority from making its local plan in terms of permission in principle. However, once these local plans are in place and give access to sufficient land for housing need generally in an area, if local authorities, as a consequence of this additional duty, have a preferential or discriminatory duty in favour of planning applications being made available only for certain types of new housing, that will entail an opportunity cost for the provision of other housing. The balance of need in an area may not necessarily correspond with what young people in that area are looking to acquire, especially young people with local connections trying to access what I would regard as starter homes with particular support, if the definition of what a local authority must seek to promote is very narrowly defined and does not enable some of those additional products to be available to them.
That is rather a long-winded way of saying that in Clause 3, the Government are looking for local authorities to have a general duty to promote starter homes. If starter homes are properly defined, I am all for that; if starter homes are narrowly defined, a local authority must have the discretion to pursue other mechanisms for promoting home ownership and to help young people buy their own homes. Amendments 47A and 53A, which I have put down, bear on Clauses 3 and 5 but not on Clause 4, which we are going on to debate. There would be a duty on local authorities to promote starter homes or alternative affordable home ownership products, but that would not prevent the Secretary of State setting a starter home requirement. Local authorities would not be without a degree of specific requirements to meet the Government’s manifesto objective. I support the manifesto objective, and want us to achieve it, but starter homes, which we shall come to debate, are too narrowly defined in the Bill at present in the context of that requirement.
That said, the Government have a manifesto commitment and must, I think, have the right—which Clause 4 would continue to give the Secretary of State —to pursue it by setting specific requirements for local authorities. But the Government should do it in a more permissive context for local authorities, so that they could at the same time recognise that they have to be able to accommodate other schemes, which we all support, through the planning system—for example shared ownership and rent-to-buy schemes. That is why these amendments are there. I hope in a later group to be able to explain a better way of dealing with this, which is for starter homes to be differently defined.
Lord Best
My Lords, Amendments 47B and 53B follow on from the amendment in the name of the noble Lord, Lord Lansley, whose comments I much appreciated, and support the 12 amendments in the name of the noble Lord, Lord Tope. They would change the duty on local planning authorities from that of promoting starter homes exclusively to that of also promoting alternative home ownership schemes, with the added ingredient, in these amendments, that these extra home ownership products should be approved by the Secretary of State. The amendments in my name and the names of the noble Lords, Lord Kerslake, Lord Kennedy, Lord Beecham and Lord Stoneham, provide the opportunity for other—equally if not more desirable—home ownership products to be permitted in place of the one-club approach, the single option of 20% discounted starter homes.
The bright ideas of policy advisers may not always represent the only or the best approach and the starter homes initiative got its star billing without consultation with key practitioners or other politicians. In the event that a more creative, more beneficial route to home ownership already exists—or may be invented in the future—it seems wise for the Secretary of State to allow for alternatives.
My amendments would not help, sadly, the fledgling new sector of build to rent, where institutional investors are putting in long-term money to build decent market rental housing. This amendment is only about alternative home ownership products, and I am concerned that, as the British Property Federation has warned, the gradually evolving institutional rented sector is likely to lose out to its new rival of subsidised starter homes. Build to rent also addresses the demand from younger people who cannot raise sufficient deposits and/or a large enough mortgage. The sector helpfully draws in new resources from pension funds and other institutional investors, and several build-to-rent developers are now offering good-quality and longer-term security than is common in the PRS at large. But this newly emerging sector will not be able to take advantage of the grant of many thousands of pounds going to each first-time buyer of a starter home.
I am sorry these amendments will not be useful to the build-to-rent proponents. However, they seek to recognise the Government’s ambition that home ownership should take precedence over renting. Within the open market, this government priority is understandable. By extending the range of home ownership products to embrace schemes that may well prove more desirable than starter homes, these amendments and those in the name of the noble Lord, Lord Lansley, would assist the Government’s overarching aim.
Baroness Williams of Trafford
My Lords, the example I gave was a couple on a mean wage of £26,000, not one person on £26,000. Four times one wage would be under £150,000. To clarify, I am talking about a couple on £26,000 each. It is the mean wage so I just gave it as an average example, if the noble Lord could accept that in the context in which it was given. It was an average example of an average couple.
The noble Lord, Lord Tope, asked when we will get the details of the review of shared ownership. It was a commitment made by the previous Government. This Government carried out an internal review which resulted in the announcement of 135,000 shared ownership units in the spending review of 2015. The prospectus for the shared ownership programme is due in the spring.
My noble friend Lord Lansley talked about the definition of the starter home. Clause 2 talks about the criterion for a starter home being a new dwelling available to qualifying first-time buyers aged under 40. We will specify more criteria in the regulations. It is sold at a discount of at least 20% of market value. It is sold for less than £250,000 outside London and £450,000 within Greater London. It is subject to sale and letting restrictions to be specified in the regulations and we will consult.
Lord Lansley
I am grateful to my noble friend the Minister but, as I expressly said in my contribution, I am looking forward to debating the definition of a starter home in Clause 2 on a later group.