Housing and Planning Bill

Lord Stoneham of Droxford Excerpts

Tuesday 1st March 2016 Lords Chamber

[Lord Campbell-Savours (Lab)]

My Lords, most of the relevant points have been made and I do not want to repeat what other noble Lords have said, but I have a simple question for the Minister.

Amendment 48A, tabled by the noble Lord, Lord Best, refers to the need to take into account,

“those over pension age, … those on below average incomes, and … those to whom it owes a statutory housing duty”.

Amendment 50, tabled by my noble friend Lord Kennedy of Southwark, refers to an exemption requirement for housing for,

“younger people; … older people; … people with special needs; or …people with disabilities”,

or where there is a proposal to build,

“a homeless hostel; … refuge accommodation; or … specialist housing”.

We have, this evening, repeatedly heard the case that starter homes are to be given priority over everything else. How will those that I have just listed be protected in the new regime which the Government are promoting? In other words, how can we be assured that the groups referred to and embodied in those two amendments will be provided for under a system which gives priority to starter homes? If the Minister can answer that question, she will be able to answer most of the issues raised in this debate.

[Lord Stoneham of Droxford (LD)]

My Lords, we have had a long debate. Though I am reluctant to detain the Committee for too long, I want to speak in favour of these amendments, particularly Amendments 48A, 50B and 50D, to which I put my name. I again draw the Committee’s attention to my interest as chair of Housing & Care 21.

We have to ask the Government: are we in this together on housing? The need to build more homes is something we all agree on but I contest the point made by the noble Lord, Lord Young. I accept that a commitment has been made in the Conservative Party manifesto; I respect that, although I do not think it is right and I have some suspicions as to how that figure was snatched out of the ether and arrived at. The question is whether we will build more homes than we would have without this extra policy initiative.

I think the Government have—certainly the Conservative Party has—a problem with social housing and affordable housing for rent. That is why we have had a setback. We had a problem in the early years of the coalition in getting the Government to put more money into social housing investment. It happened only when the Chancellor became worried about the state of the economy, as far as I could see. At that point, we at last saw some initiatives that encouraged the building of social housing.

As has been admitted in this debate, we have now gone backwards. If we were really setting out to build more houses we would be building more for private ownership and more for social housing. We had begun to make progress on that at the end of the coalition Government—not enough, I accept, but we had made some. Frankly, we are now going to hit the buffers because of all the initiatives and impetuses behind starter homes and the promotion of home ownership. As the noble Lord, Lord Kerslake, said, starter homes will be at the expense of other forms of housing, and that will include social housing. The consequence is that we will build fewer houses than if we had really been in this together and planned to increase home ownership while maintaining a balance by being committed to social housing as well. As a consequence, there will be problems in terms of the design of homes and the communities we build, which will be lopsided and unbalanced. Future generations will come to regret that.

It has been made quite clear by the noble Lord, Lord Best, that there are other areas of need which the Government seem to be ignoring. We know that the retired population is increasing and we want to have more rightsizing. What initiatives will the Government use to encourage that process? Only this week, we have seen initiatives from the National Health Service, which recognises the importance of housing in health policy. I do not see where the Government will get the extra housing for the retired population.

It remains the case that homelessness is getting worse. I am sad to admit that it increased during the last years of the coalition. Which of these initiatives address that? Local communities should surely be given the flexibility to address some of those problems rather than go down a route that puts all the emphasis on home ownership. The other consequence will be that the people in real need will be driven into the private rented sector, which will compound our problem with the housing benefit bill because we will be paying out more.

I would also like to draw attention to the rural area, which the noble Lord, Lord Cameron, covered in his remarks. I cannot think of a more critical area where community needs have to be very carefully planned and provided for if we are going to have balanced communities which feed into the social life of those communities. We have to give more attention to providing affordable homes to local people—we need to make that distinction. As he says—and this is another argument that we are not actually going to increase the number of homes that are going to be built—I know that landlords in my area will be very reluctant to give up their land at a reduced price if they think that in the future people will have the opportunity to make a profit out of that, rather than what they thought, that these homes were going to be used for local people in perpetuity for their social needs and those of the communities in which they live.

Everybody agrees that there is a problem with supply. If we are going to build more homes that actually meet the demand we have, we need more diversity, mix and balance. As well as helping private ownership, we have to give more attention to social housing. If we do not, we will have all the problems I have mentioned in terms of increasing pressure on homelessness and the encouragement to older people to rightsize being diminished, and therefore we will end up with a worse and unbalanced housing situation, when there was a real opportunity for all of us to be in this together.

[Lord Beecham (Lab)]

My Lords, we are all familiar with the concept of the starter homes project, which the Government launched with a great fanfare. It will, as we are now very familiar with, provide 200,000 affordable homes—I think that is the Government’s target—for first-time buyers aged under 40 who will benefit from a discount of 20%, which will not be repayable on a subsequent sale after five years. That is the basic concept.

Of course, the only criterion for obtaining the assistance and the discount to buy these starter homes will be age, not income. In London, for example, this could lead effectively to a handout on resale of more than £100,000 to the buyers of starter homes bought for the capped price of £450,000 after the discount—an untaxed £100,000 gain for the fortunate under-40s who secure a starter home. The Government fund all this with £2.3 billion, which represents just a part, as I mentioned before, of the housing benefit savings from the imposition of the 1% increase on social housing rents. The damage that that does to the social housing stock is, of course, studiously ignored.

Section 106 currently delivers half of all new affordable homes. Shelter describes it as being,

“especially vital to the delivery of new social rented homes, as grant funding for these homes was removed in the last Parliament”—

by, I remind your Lordships, a coalition Government—

“and funding for Affordable Rent ends in 2018”.

Of course, in the mean time we will have cuts to social rents, limiting housing associations’ ability to build new homes. Shelter research found, as we have heard, that starter homes are unaffordable to people on low incomes in 98% of the country and unaffordable to those on middle incomes in 58% of the country.

The claim is that affordable homes will thereby become available for purchase but clearly affordability is an elastic concept. The coalition Government drove up council rents, deeming an affordable rent in that context to be 80% of private sector rent levels. But given the chronic housing shortage and the boom in buy to let, which dramatically drove up prices and rents in the private sector, that definition of affordability is fundamentally flawed. Affordability must surely relate to what the would-be owner-occupier or tenant can reasonably be expected to pay, having regard to his or her income, not an artificial comparison to the market rate.

Prices, as we know, will be capped at £450,000 in London and £250,000 elsewhere after the 20% discount, representing, in effect, full market prices for these new properties of £562,500 in London and £312,500 elsewhere. However, the Government claim that the average price of starter homes for first-time buyers would, after the discount, be £291,000 in London and £169,000 elsewhere. Even at those levels—which are highly questionable, especially for London—starter homes will not be affordable for a huge number of people. In fact, the Government’s figures appear to be based on the average cost of houses bought by first-time buyers, not the average price of new houses, which would be higher.