Baroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Housing and Planning Bill
Baroness Williams of Trafford Excerpts
Lord Cameron of Dillington (CB)
My Lords, I put my name to Amendment 41. I was going to list the range of various abuses that I felt the starter homes regime would be open to, but that has been done with much greater expertise and experience by my colleagues, my noble friends Lord Best and Lord Kerslake, and, indeed, with greater eloquence.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford)
My Lords, I thank the noble Lord for giving way. I just do not want to happen today what happened on Tuesday. Amendment 41 is in the following group, but I am very happen to listen to him and to respond.
Lord Cameron of Dillington
I do apologise; I meant Amendment 41A.
The point that everyone has made, including the noble Lord, Lord Campbell-Savours, who I did not mention just now, is that the moment you falsify a market, there will always be someone looking to make a turn. If the Government are experimenting with a new product, I am certain that financiers and traders will be very quick to find new ways of taking advantage.
To my way of thinking, starter homes do little, in the countryside at any rate, to solve the urgent housing problems of those many families in real need. The other big shortfall of starter homes, when compared with, say, shared equity, is their transiency. Unless we continue to build, let us say, 50,000 starter homes every year in their currently proposed incarnation, not only until 2020 as promised by the Government but ad infinitum, then their very small benefit to society will in each case be lost after only five years.
The lack of affordable housing in this, our very crowded island, is not a short-term problem. I cannot see it diminishing, so we need something more permanently fixed in the affordable sector than starter homes as currently planned. By way of a compromise, to assist starter homes to give a little longer-lasting benefit and to avoid, as has already been said, some of the possible abuses, I believe that Amendment 41A is worth serious consideration by the Government.
Lord McKenzie of Luton
I accept entirely that the recovery could be by the local authority rather than the Government.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Kennedy and Lord Beecham, for Amendments 38 and 39, and the noble Baroness, Lady Bakewell, and the noble Lord, Lord Shipley, for Amendment 46. I will address them together.
I am very clear that starter homes are a new product. They are a manifesto commitment designed to serve a pressing new need. Clause 2 sets out the key parameters: a starter home is available to first-time buyers, under 40—the very gap that the noble Earl, Lord Lytton, referred to—at a minimum discount of 20% of market value and are subject to a price cap.
The proposed amendments would replace the minimum 20% discount on the open-market value with affordability criteria based on average local household income. Any discount would remain in perpetuity. This amendment would remove the 20% discount on local market values. I cannot support that as 20% is a minimum discount and, if they wish, councils would be free to negotiate with developers for a higher discount if that was best for the area. There is evidence that they do that at the moment for affordable housing.
Much was said at Second Reading and on Tuesday about the affordability of starter homes. Research on affordability by Shelter and Savills for the Local Government Association was based on median house prices in each region. I question whether first-time buyers access the market at average house prices, as I pointed out the other day. Starter homes will be valued to align with local house prices for first-time buyers aged under 40. We are working with the sector and professional bodies to ensure that a transparent process is agreed for valuation.
The noble Lord, Lord Kerslake, talked about the Shelter report, which is not out yet—he must be a very important person, as I have not seen it yet. I will be interested to see it when it is published but I must point out that we all agree that London is expensive. I do not think that anybody denies that. In response, I would point out that we estimate that starter homes will be accessible to those with a gross household income of £45,500 in the south-east, as I added up badly yesterday, and of £39,500 in the east of the country.
Lord Campbell-Savours
The noble Lord, Lord Kerslake, challenged the Government’s figures on this question of affordability. I think that he quoted a figure of 68% in one case, which is different from the figures that the Government are giving. The Minister said that she was going to have a look at the report. Will she come back at the next stage, when she has seen that report, and give us an explanation of why there is a difference in the stats?
Baroness Williams of Trafford
I can, my Lords. We can all argue about statistics and, given that I have not seen the report, it is very difficult to make a comparison of the different figures. However, I will do so.
Lord Kennedy of Southwark (Lab)
In her earlier remarks, the Minister said that authorities could negotiate a higher discount on the property with developers. If they can do that, why can they not negotiate a lower discount as well?
Baroness Williams of Trafford
Because the whole point of the starter home is that it will be available at a discounted level to those under the age of 40. I will give the noble Lord the workings out of why that was arrived at. I am guessing that it was derived for a similar reason to that for the affordable homes discount, which has now been going for many years.
Lord Kennedy of Southwark
That is very helpful, thank you. We used to hear from the Benches opposite about how local authorities knew best but it has all gone very quiet now. I am thinking of the Localism Act, which was never mentioned again from the Benches opposite.
Baroness Williams of Trafford
I do not think that anything changes there. Nobody would promote any louder than I the view that local areas know best but local areas also know that government has certain expectations of them, and it has ever been thus.
The noble Lord, Lord Campbell-Savours, asked me for a breakdown of demand. I elected earlier on to provide that in due course and I will write to him. I do not have it at my fingertips at this point.
Baroness Williams of Trafford
I will try for next week and see what is in the art of the possible.
We have examined the affordability of homes to those who are currently in the private rented sector. If they were to buy a new-build property in the lower quartile of the first-time buyer market outside London, up to 60% of households which are currently renting privately would be able to secure a mortgage on a starter home, compared with 45% who could buy a similar property—
Baroness Williams of Trafford
That is the figure being challenged and we will return to it later but in the absence of seeing the report and its figures, I cannot comment on that report at this time.
Lord Beecham
Can I remind the Minister of my request to see a comparison of newly built first-time purchases and any other housing that might be bought by a first-time buyer? I suspect that there is a difference.
Baroness Hollis of Heigham
I take it that the letters will be circulated to all Members taking part in the debate?
Baroness Williams of Trafford
Absolutely, and they will be placed in the Library. I have the implied first-time price of new build—not the demand figures—by region, which might temporarily satisfy noble Lords. In the north-east, it is £138,000; in the north-west, it is £144,000; in Yorkshire and Humberside, it is £144,000; in the east Midlands, it is £152,000; in the West Midlands, it is £148,000; in the east of England, it is £220,000; in London it is £356,000—no surprises there; in the south-east, it is £352,000; in the south-west, it is £179,000; and in the whole of England it is £216,000. I hope that is all right as a starter for ten, but I will endeavour to get those demand figures for next week.
Within London, up to 47% of households that are currently renting privately would be able to secure a mortgage on a new-build starter home—in the lower quartile of the first-time buyer market—compared to 37% who could buy a similar property now, priced at full market value. This demonstrates that starter homes, at a 20% discount, will provide a genuine opportunity for home ownership for many more households and help them to get a lasting foothold on the property ladder. The noble Lord, Lord Best, talked about the equity loan scheme as being a discount; the very nature of its name implies that it is a loan—it has been extended to 40% in London. But the whole of the debate so far has talked about the inaccessibility of the housing market, particularly for first-time buyers, and London is a really hot case in point. Either we want Londoners to access the London market or we do not—I think that all noble Lords do want Londoners, particularly the young ones, to access the London housing market.
The noble Lord, Lord Best, also said that Help to Buy distorts prices and drives down supply. A government research report that came out last week stated that, actually, Help to Buy does not distort prices but drives up supply. Government research found that 43% of additional new homes built were as a result of Help to Buy. It has, understandably, been an extremely popular product.
Lord Best
I am not saying that the current 20% Help to Buy support has not been helpful in the marketplace. What I am saying is that the increase from 20% to 40% Help to Buy assistance in London, coupled with a 20% discount—that is where the discount comes in, a cash discount—adds together to 60% of the value of the property. The Minister is right to say that I commented that others have criticised the 20% Help to Buy support—I think we have yet to see it, but we can guess that 60% help to people buying in the form of 40% Help to Buy plus 20% discount really is an extraordinary level of assistance to people, much as we sympathise with their need to move out of rented homes if they can.
Baroness Williams of Trafford
I thought that the noble Lord had said discounts, so I apologise if I misheard him. I think I need to reiterate that point: the 40% Help to Buy loan equity plus the 20% discount do not add up to a 60% subsidy. Effectively, 40% of that 60% is in fact a loan and has to be paid back.
Baroness Hollis of Heigham
In that case, why does the Minister think she needs a 20% discount on top of a 40% equity loan—which is, frankly, an interest-free bridge, if you like—which then gets repaid and recycled on to the next, so that, as the noble Earl, Lord Lytton, said, it is not just a one-off windfall for the lucky first-time accessors to that particular property?
Baroness Williams of Trafford
My Lords, I think I have been over the arguments many times. As I say, this is a new product introduced by the Government, a manifesto commitment to help that demographic which has been so disenfranchised by the buyers’ market, and it will help those people to get on the housing ladder. I know that we disagree, but everyone in this Chamber has talked about the particular difficulties of London, and that is why the equity loan guarantee scheme is being extended to 40% in London.
The restrictions imposed by permanent discount can make it more difficult to sell and to move on—I have gone through that earlier today. If a property can only ever be sold at a discount, can the owner easily move upwards to a larger home or to a new area? We want to ensure that the opportunity of home ownership comes with future choices and mobility, and not with more constraints. This is central to our vision for first-time buyers: a genuine discount that provides a genuine opportunity for the long-term future. As I have said, this is particularly important for young people, and we intend that starter homes will continue to be provided until 2020 and well beyond—obviously, we cannot commit a future Government to the priorities of the current Government, but that is our intention. A new supply of starter homes will become available for future first-time buyers, who will benefit from the same opportunities as the earlier buyers.
I will now turn to Amendment 41A, which introduces an alternative to the Government’s five-year restriction on sales, and the in-perpetuity model put forward under Amendment 46. This proposes that a 20-year taper is attached to starter homes where a buyer secures an uplift in value of 1% for every year of ownership. However, under this amendment, a couple in their mid-30s buying a starter home as their first house would need to stay there until their mid-50s to realise the full uplift in the value of their property. This seems like a significant restriction on their future mobility and does not support our ambitions for starter homes. Such long-term restrictions would make it more difficult to sell and move on. If the property is sold at a discount, can the owner easily move upwards to a larger home or to a new area? If people find it more difficult to move on, I question whether long-term restrictions will benefit future occupiers.
Lord Campbell-Savours
Would not such people still get the benefit of house price inflation, irrespective of the discount?
Baroness Williams of Trafford
My Lords, they would. But the principle behind the Government’s initiative is that within a few years people can start to move up the property ladder, but we want to help them to move on rather more quickly than the noble Lord suggests.
Baroness Blackstone (Lab)
My Lords, I am puzzled by what the Minister is saying. There are hundreds of thousands of young people who have had to buy a small flat early in their lives, at the point when they need to have housing. Very often they have got married and they may have a baby. They then have a second child. They make some savings and move to something larger. They do not have big discounts. So why is the Minister saying that this very small group of people should have such a very large sum of money thrown at them? It really is very difficult to understand.
The Minister has said throughout this debate that she is concerned that other forms of housing and tenure should all be provided with support as well, yet everything she says in response to this debate suggests that starter homes have become of such enormous significance to the Government’s policy that very large sums of money are being promoted to be provided for a relatively small group of people who will, very often, not be the really poor or even middle-income young people but relatively well-off young people. I cannot understand why the Minister thinks that, when it comes to wanting to move to a larger house, this group is not capable of doing what everybody that has been in this group before without a starter home benefit has been able to do. It just does not add up. It is also incredibly inequitable. In fact, the whole scheme is incredibly inequitable. I would have thought that the Government would want to look at the distributional consequences of a scheme of this sort: not just the costs and benefits, as was suggested earlier by the noble Lord, Lord Shipley, but who benefits and who does not benefit. The Committee deserves to know something about this, and we have not been told.
At face value, it looks to me as if a large number of people, including young people who want to buy homes, are going to get nothing out of this while a very small number are going to get a great deal and will continue to get a great deal. The Government and the Minister refuse to see that a perpetuity provision such as that proposed in this group of amendments would help to counter some of the criticisms that Members of the Committee have given in the debate this afternoon.
Baroness Williams of Trafford
My Lords, the noble Baroness asks who will benefit. Young people will benefit, and history shows us that it is young people for whom home ownership has been out of reach.
Lord Kerslake
There is a critical point here, which has perhaps been missed. When a couple or an individual seek to buy, they will make choices about what they can afford and, accordingly, where they can buy. In some situations, they will choose somewhere, as was said earlier, of lower value, because that is what they can access by way of mortgage; in other places they will go for somewhere of higher value but with a discount offered. They will make a choice about their purchase at that point. What they are essentially doing, when you put a second charge on a property, is making a trade-off between the discount—and the length of the discount—and the price they have to pay. That is what they are doing.
If you make it five years, anybody will go for that, whether or not they need it, as that will be the only way they can access the property. If you make it 20 years, it is much more likely to be the people who genuinely cannot access full market value who go for the property. This is a crucial point. If you really want to avoid deadweight squeezing out the people who might be able to purchase only with the discount, you have to have a longer taper than five years.
Baroness Williams of Trafford
My Lords, I think we are going to have to disagree on this. The noble Lord, Lord Campbell-Savours, made the point that owners would get the uplift from house price inflation. However, that could be the other way round, as after five years, a house could be worth less. The housing market is cyclical—prices go down as well as up—so there will not necessarily be an increase in the house price after five years.
Lord Campbell-Savours
So people in this particular group who might be subject to deflation are again picked out to be treated specially: they will have their deflation subsidised by others.
Baroness Williams of Trafford
My Lords, this is all relative. When house prices come down, the next house up on the ladder will also be cheaper. Under the proposal of the noble Lord, Lord Best, after five years the couple in question would benefit from a quarter of the discount. I accept that after 20 years they would benefit from the whole discount. I know there is not agreement in the Committee about this, but we want people who work hard and want to move up the housing ladder to be able to do so.
Lord Kennedy of Southwark
We all want people who work hard to move up the housing ladder, but the problem here is that this is such a small group of people.
Baroness Hollis of Heigham
Can the Minister explain something? I think most of us would sympathise with trying to find the best way to help people into owner-occupation, particularly given the pressure of house prices. We could argue whether it should be equity loans, starter home discounts of 20% or anything else, but why this sudden fixation with mobility for people who are no longer first-time buyers but second-time buyers and maybe, subsequently, third-time buyers to be free of any discount so that they can enter the market without having had to save, as my noble friend said, in the way that everybody else has? Why do the Government consider it to be part of their responsibility to help people become second-time buyers?
Baroness Williams of Trafford
My Lords, housing is an issue for government and there is a huge demand on housing in this country. This scheme is not to the exclusion of other products—I must stress that it is not as though we have switched off the tap to all other products. Sitting on these Benches, one might think that there were no other products on the market, but there are. This is one way of helping that demographic for whom home ownership has been so out of reach.
Lord Kennedy of Southwark
I asked a Question this week about people on the living wage for whom homes are out of reach—people who are trapped in the private rented sector. This is not helping those people.
Baroness Williams of Trafford
I did not disagree with the noble Lord. I pointed out the various things that were available, such as shared ownership and affordable rented properties.
Baroness Williams of Trafford
There is Section 106, if it is viable for the scheme. There is £20 billion going into the housing market, of which £8 billion is for starter homes. It is one of a number of parts of the jigsaw, but the Government are very keen to promote it. We do not shy away from that: we want people to get on and move up in a reasonable time.
Baroness Williams of Trafford
For all the reasons I have outlined, because of the gap in the market. However, if people find it more difficult to move on, I would question whether long-term restrictions would benefit future occupiers. Allowing first-time buyers to benefit from a genuine discount will increase the vibrancy of the housing market, while the next generation of first-time buyers will benefit from new starter homes coming through the planning system in years to come.
Those homes will provide first-time buyers with the opportunity to move up as their family grows—as the noble Baroness said—or their circumstances change. We are consulting on the five-year restriction for affirmative regulations shortly, and will consider all responses carefully.
Our proposals would prevent starter homes being sold on the open market at full market value for a period of five years after they were first purchased by a first-time buyer. We believe this is important to ensure that starter homes are sold to those who are genuinely committed to living in an area and not to those who would simply wish to sell to secure financial uplift. We want to be clear that a starter home could be sold during the first five years of occupation—that point relates to the question of the noble Lord, Lord McKenzie—but it could be sold on only at 80% of market value to a qualifying first-time buyer. Therefore no money moves anywhere during this period. After that time, the property may be sold at full market value. This proposal will be set out in affirmative regulations following consultation.
Lord Shipley
My Lords, could the Minister please explain who would be responsible for assessing market value?
Baroness Williams of Trafford
My Lords, as I said this morning, we would expect an independent valuation to take place. That would be the fairest way to do things. A number of noble Lords have mentioned that this afternoon.
Our consultation will provide the best opportunity to test our proposals with the sector, including developers and lenders. We need to wait for the outcome to ensure that post-sale restrictions can work well in practice. Introducing tapered discounts over such a long period is complicated and including them in the Bill would limit the flexibility to make adjustments to the way they work in practice if necessary.
On Amendment 40, I assure noble Lords that it is not our intention to allow those people who buy a starter home to become buy-to-let landlords. We will ensure that letting restrictions are included in our regulations. The aim is to provide a place to live in, not a place for absentee landlords to profit from.
Unfortunately, restrictions to any legislation will not prevent gaming at the local level, but I assure noble Lords that we are working with builders, lenders and local government on the best possible mechanism. We will consult on the details for the regulations in a technical consultation to be published shortly.
Baroness Williams of Trafford
The noble Lord makes an extremely valid point and I will ask about what the mechanism would be there. People will be queueing up for these homes anyway because they are going to be appealing for first-time buyers, but I will ask about the precise mechanism by which that would work—whether, effectively, there is competition in the market. That is a valid question.
Lord Kennedy of Southwark
My noble friend indeed makes a valid point. If people went on to do that, it would be fraudulent activity, so I presume that there would be appropriate penalties. People need to know that, if they behaved like that, they would get caught and pay a heavy price.
Baroness Williams of Trafford
I do not disagree. We would not want to introduce a system that was fraught with potential fraud.
Baroness Hollis of Heigham
But the easy way around that is that you pay £20,000 or £25,000 for the white goods and the carpets. There is no problem in doing that; it is easy.
Baroness Williams of Trafford
My Lords, I turn to Amendment 39A, which would enable Rent to Buy products to be considered as starter homes. We know that there is an appetite among housing providers and developers to deliver more home ownership in new and innovative ways. We know that we need a wider range of products to assist young first-time buyers to access home ownership when a generation is increasingly being priced out. The Government are supporting people who cannot afford a discounted purchase outright through the separate schemes that I have mentioned, such as Rent to Buy, Help to Buy and shared ownership.
Our commitments through this spending review will provide households that cannot yet afford a home on the market but aspire to home ownership in the medium term the opportunity to save for a deposit. It is a good product and, like other valuable products that support access to home ownership, affordable Rent to Buy can be considered by councils as part of their wider affordable housing requirements for their area. The clause will not prevent those developments from coming forward.
This is a new product. Our manifesto was clear that we would build 200,000 starter homes and this is central to our housing ambitions. The electorate will expect us to deliver on our commitment. The starter homes policy is a product for outright purchase that gives people the benefit of home ownership and, importantly, helps them to achieve a step up the ladder. I have tried to answer all noble Lords’ questions.
Lord Kerslake
Before the Minister sits down, I understand that Shelter will publish its data very shortly. I was keen to have the latest data for this debate. It would be helpful if the Government could also publish not just their data but the underlying assumptions behind them so that we could have a true like-for-like comparison.
Baroness Williams of Trafford
I can say to the noble Lord that we will certainly request that—he has been teasing us all afternoon. I am looking forward to seeing that report and I am sure that we will debate it in full, comparing those data and the Government’s data. I ask noble Lords not to press their amendments.
Lord Beecham
My Lords, I express the thanks of the House to the noble Baroness. She has had a long, difficult and, if I may say so, lonely day in terms of support. Over the lunch break, I suggested to her that she should have a word with the Whips’ Office to ensure that somebody else could take some of the load of replying to the debate. Perhaps the noble Lord was sent in for that purpose, but I do not know how well he would have been prepared for it. For the rest of our discussions on the Bill, I hope that the noble Baroness receives more visible and audible support. It is unfair for her to have to deal with all these complicated matters on her own. I compliment her for her patience and good nature, if not for the policies that she is supporting.
In speaking to his amendment, the noble Lord, Lord Best, came out with a rather delightful phrase:
“If the cream is too rich, the cat dies”.
It is not quite appropriate in this case because, effectively, the cat is the public purse. The public purse suffers because money is being pumped into this scheme—and it is not just the public purse, but other potential uses for that funding in the housing sector. So it is a rather strange cat that we are looking at.
The noble Lord also referred to the concern of the building industry in that regard. The noble Baroness did not refer to that but seemed to imply that this was a great thing for the industry. However, that is not, apparently, the view of the industry. It would be interesting to see, as we go through the Bill, whether more information comes from that sector.
The noble Lord, Lord Kerslake, referred to Help to Buy and the Minister made some reference to it, too. It is not clear whether and to what extent the relationship between the two concepts has been thought through and whether the impact of the one on the other has been assessed as to eventual outcomes. As usual, there is little in the impact assessment to help us. This clearly needs to be addressed. Help to Buy might decline in the light of this arrangement. Of course, Help to Buy is not confined to this particular age group, but it is not at all clear what the impact of the change would be. The noble Baroness gave some figures for the amount that the scheme costs. It may or may not be cost-effective. On balance, it looks to be a sensible proposition.
Amendment 39A, tabled by the noble Lord, Lord Lansley, who is not in his place, has a good deal to commend it. I hope that the noble Baroness will look at it slightly more sympathetically than she appeared to be doing, although I am not sure if I have read her intentions correctly. The amendment seems a sensible proposition.
The noble Lord, Lord True, referred to distortions in the market. Of course there are distortions in the market, particularly in the capital, with a vast amount of investment flowing into very expensive properties and buildings, many of them apparently for the benefit of overseas citizens who want to park their money somewhere safe. That must have a distorting effect on the whole housing market in the capital. Nothing in the Bill, or anywhere else, appears to address that issue, but the issue surely needs to be addressed—not necessarily in the Bill—as it is a factor in the huge price rises in the capital. It also uses the resources of the industry, which could be building more affordable homes elsewhere but, for obvious reasons, is investing heavily in these hugely expensive and unwanted developments. As the noble Lord rightly says, or implies, this distorts the market.
The amendments to which my noble friend and I have subscribed our names have two potential ways of dealing with the discount. We have signed up to both of them because they are both potential runners and we need to discuss them in further detail, perhaps before we get to Report. One is that the discount should be regarded as being there in perpetuity, which would hold the price down in perpetuity, while the other would taper the discount. They would not necessarily lead to money being paid by a seller as opposed to the price having to be retained at the discounted level—while of course allowing for the house inflation to which my noble friend Lord Campbell-Savours has referred more than once.
This is a hugely complicated area. We all need time to reflect and I hope that that period of reflection will be materially aided by as many answers as the noble Baroness and her team can provide and by advice from those in the industry and those concerned with the problem nationally, bearing in mind that there will be different approaches in different parts of the country, which we very much need to take into account. Having said that, I beg leave to withdraw the amendment in my name.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Kennedy, Lord Beecham and Lord Kerslake, and the noble Baroness, Lady Doocey, for their amendments. They give me an opportunity to explain our key parameters for the delivery of starter homes, particularly in relation to unviable and underused brownfield land and housing regeneration schemes.
Perhaps I may start by addressing Amendment 41, which seeks to restrict starter homes to underused and unviable brownfield land in line with our original starter homes exception site policy, as the noble Lord, Lord Kennedy, has said. Let me be clear that we still expect exception sites to make a significant contribution to starter home delivery, and the first planning applications have been submitted under the exception site policy which has been in place since March 2015. We expect these to deliver a substantial number of starter homes, boosting the overall housing supply, and we have consulted on planning policy changes to extend and strengthen this policy, as well as bringing forward more land for starter homes, building on the exception site policy. We want to ensure that sufficient appropriate land is brought forward to meet housing need.
This planning reform will be further strengthened by the £1.2 billion starter home land fund which was announced by the Prime Minister in January. The fund forms a significant part of the £2.3 billion allocated to deliver more starter homes in the spending review and will support further brownfield site preparation, delivering at least 30,000 starter homes. It builds upon £36 million made available this year to secure and prepare more land for a first wave of starter homes, and it includes £8 million offered to councils to support starter homes on 27 underused or vacant brownfield sites across England. The HCA is using the remaining funding to acquire further suitable brownfield sites to drive up housing delivery.
But we also need to deliver starter homes on more conventional housing sites so that first-time buyers across the country can benefit from discounted home ownership. Limiting this would limit the opportunity for home ownership. It will also bring the benefit of a new mix of housing types on site: discounted properties for first-time buyers alongside wider market housing and any shared ownership or rented housing secured on the site. It is our view that the opportunities for first-time buyers have too often been neglected. Starter homes provide for a new model which should be delivered alongside other housing types. My department will be consulting on proposals for starter homes requirement on conventional sites in a technical consultation to be launched in the near future, and we want to look carefully at the proportion of starter homes required.
Lord Kerslake
I apologise for intervening again, but there is a critical point to be made here. When you consider the viability of a regeneration scheme, you can juggle the mix between market, sale, affordable rent and shared ownership, but in the case of the proposals for starter homes, we will have a number dictated by central government that in effect will be required to be delivered. That will have an impact, whether we like it or not, on the viability of a scheme. The issue is the ability to deliver a scheme and the flexibility required to make it viable. That will be significantly impacted by an absolute requirement to deliver starter homes regardless of the other requirements.
Baroness Williams of Trafford
I take the noble Lord’s point that the requirement to deliver starter homes might affect the viability of a site. That would be absolutely counterproductive, but it will often be the case that not only will the starter homes requirement be able to be met, but the council, in consultation with the developer, may well be able to provide other types of housing. I particular refer to houses for affordable rent, because they are quite often the grant-funded houses that effectively act as a pump-prime for the construction of homes.
Turning to my noble friend Lord Deben’s point on the green belt, we are very committed to protecting the green belt, despite what noble Lords might read in the newspapers, and we are maintaining the strong safeguards that are set out in national planning policy, which allow for development only where special circumstances exist. I agree with my noble friend that once it is gone it can never be got back.
Lord Deben
I just hope that my noble friend will remember that it is not just the green belt that I wish to defend: it is green fields and it is the need to build on land that is already built on, or has been built on, in order to get the homes we need. This is very important part of it; I do not want to restrict our building.
Baroness Williams of Trafford
Yes, I understand my noble friend’s point. Under our proposals in the NPPF national planning policy consultation, small-scale development in the green belt for starter homes could take place, but only where it is endorsed by the local community. I take my noble friend’s point, certainly in light of recent flooding, about the need to have this very finely balanced and for green belt not to be used as a sloppy method for builders to be able to build willy-nilly.
Lord Kennedy of Southwark
On that point, the idea for this policy was originally to build on brownfield sites and get them back into use, but the policy has now been widened. As the noble Lord, Lord Deben, said, people will opt for the easier options. I am worried that we will end up with a situation where we will still have the old brownfield sites, because no one wants to build on them, and other options, in our towns and elsewhere, will become more attractive for people to build on.
Baroness Williams of Trafford
I am in total agreement with the noble Lord and with my noble friend. One thing we are testing is whether there should be more flexibility on developing brownfield that is in the green belt—that exists, of course, but it is 0.1% of all green belt. It has been suggested that there should be a bit more flexibility on that, but not on the green belt itself. The noble Lord and my noble friend are absolutely right that these will become go-to sites for developers unless we are very careful.
Amendment 42 seeks to prevent housing regeneration schemes from incorporating starter homes. In January the Prime Minister announced an ambitious new programme to regenerate public sector estates, to tackle deprivation and build more homes. As I announced at this Dispatch Box a couple of weeks ago, £140 million of loan support funding has been made available to support regeneration and encourage investment from the private sector. My noble friend Lord Heseltine has appointed his estates regeneration advisory panel and its first meeting was held in February. Clause 2 is very clear on the definition of a starter home, which we need to ensure our reforms are widely understood. Clause 4 sets out the requirement for the provision of starter homes for residential development. My department will be bringing forward a technical consultation on the requirement so that we get it right.
The consultation will recognise that there are some developments where the inclusion of starter homes could help to secure a diversity of tenures and support mixed communities, but that compulsory inclusion could alter the viability, as my noble friend Lord True pointed out. But as my noble friend Lord Horam said, we should not exclude it at the outset—I think that that is absolutely right. I reassure noble Lords that our consultation will invite views on whether these schemes should be subject to the minimum starter homes requirement. As my noble friend Lord Horam absolutely rightly pointed out, engagement with tenants is crucial.
My noble friend Lord Heseltine was very keen to make sure that this is a truly genuine engagement with tenants, as well as other people involved in the scheme. So we need to wait for the outcome of the consultation to enable us to take into account the views and expertise of the sector. We need to work with those who will make this work on the ground to ensure that we get it right. Setting the requirement through regulations will help us to keep this operation under review and give more flexibility in the future.
Given my comments, I hope that the noble Lord will feel content to withdraw his amendment.
(a) ”
“( ) Before making regulations under subsection (8) the Secretary of State must consult—(a) each local planning authority in England,(b) the Mayor of London, and(c) any other person the Secretary of State thinks appropriate.”
The Duke of Somerset (CB)
My Lords, I support both these amendments and declare my interest as a rural landowner. Although the idea of encouraging home ownership through starter homes is a very laudable aim, I do not believe that these clauses will be successful in the wider context of rural home provision without the promotion of other tenure models, such as those we heard about in the earlier groups, which remain in perpetuity. This is the point with the discount.
One of the aims of the Bill should be to keep a balanced mix of tenures, particularly in rural areas, with both rented and owned—partially or entirely—properties. I think the Government have confirmed this is their intention. Despite what the Minister said in an earlier group, the Bill does threaten the future success of rural exception sites, which have delivered many lower-cost homes in communities where local families, often already employed nearby, and supported by the wishes of the community, can find a more affordable house. Such sites make the group with these two amendments different from the earlier ones, but many of the same principles apply.
As we have heard, these sites are provided through the altruism of the landowners selling them. Various figures have been suggested, but this is normally at 10% of the development value. Very few landowners will want to continue to offer this, if after five years the house can be sold on in the open market, perhaps to an incoming second-home owner. If I understood the Minister correctly, we have had slightly contrary answers to this question. In one reply I think she said that the Government were going to take measures to stop purchases by second-home owners, although perhaps I have got that wrong.
The Duke of Somerset
I was under the impression that we had had two contrary replies. On one occasion the Minister said that the Government accepted that second-home owners would be able to purchase such houses eventually, while on another occasion she said that the Government were going to take measures to stop that from happening.
Baroness Williams of Trafford
My Lords, I think the noble Duke is referring to when I talked about second-home owners purchasing starter homes.
The Duke of Somerset
I thank the Minister. Surely it must be sensible to protect the 20% discount in perpetuity, as the amendment suggests, or to use a tapering mechanism; or else to exclude starter homes from rural exception sites. They should also be kept for first-time buyers after the five years.
We have heard various statistics, particularly from Shelter. One published piece of research shows that in order to buy in the countryside, an applicant would need a salary of at least £50,000, with a deposit of £40,000. Those figures are after tax, which is a point that has not been made very much; so they are very high and would probably have to apply to two people in the household. Self-evidently, that is not widely affordable.
The old Section 106 affordable home requirement would be made largely redundant. Perhaps that would mean higher profits for developers, because they would not need to provide a percentage of affordable housing. In the past, that has often been 30% to 50% of the total. This is also going to mean less rental accommodation. Will the council tax banding be based on the open market value, or on the discounted value?
It is important to point out that prospective owners must consider the extra cost of the maintenance of their new houses. That is often included in the rent, and can amount to a large sum. I also want to take the opportunity to suggest that in the past so many new houses have been built to an abysmal standard of appearance and greening. Perhaps this Bill allows a chance for planners to have more say over that. Low-cost and efficiency are not mutually exclusive.
Rural villages need organic, holistic and good-quality growth. Vital assets of infrastructure—transport and medical—pubs and shops all need to be planned together, as I proposed in my Second Reading speech. I may be anticipating a slightly later grouping, but that issue is important.
Let me return to where I started. The main problem is the contention that government funding, especially in rural areas, should be spread equitably between shared ownership, starter homes and renting—that is, mixed tenures. That is why in perpetuity is such an important concept. I support both these amendments.
Lord Campbell-Savours
My Lords, I wonder if I might intervene again. In some ways I find myself at odds with much of this debate. I do not think that people understand what happens with Section 52 agreements. The noble Lord, Lord Deben, understands them, but I think he was in the department when they were brought in. The effect of a Section 52 agreement is that the smaller the locality that applies to a particular planning permission, the lower the demand for the property, which affects the price. Therefore you can have a house in a village which is free of any restriction that is identical to a house which is covered by a Section 52 agreement, where the locals-only agreement is so containing that it might cover only a few hundred yards, depending on the parish, and one house might be half the price of the other.
I thought that the objective of the people behind this amendment was to ensure that local people were provided for long term in property within their community. I would be a little concerned if we concentrated on development in villages which was simply about rental. I have no problem at all with people buying in villages as long as they do not come in as outsiders and inflate the market, driving up the price. However, if you can create an arrangement whereby, because of Section 52-type agreements, the price is contained within very restricted localities, you can then contain the price and stop huge price inflation bringing in the very people to which some Members of the Committee have taken exception during this debate.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Best, Lord Cameron, Lord Kennedy, and Lord Stoneham, and thank all noble Lords who have spoken in this debate. They give me the opportunity to set out how we think starter homes can contribute to the important rural housing agenda.
Noble Lords have articulated very well how rural areas have a series of challenges, including being dominated by perhaps a certain age group or second-home owners, and seasonally dominated—I can think of one place in Cornwall, Mousehole, which I am sure the noble Lord, Lord Cameron, knows well, which is almost deserted in the winter and packed so full in the summer that you can hardly move. Further challenges are how the few people that live there sustain themselves during other times of the year and how key workers can be brought in to fulfil certain essential jobs, and so on.
Amendments 50A and 50C are both concerned with rural exception sites. Young first-time buyers face significant affordability pressures in many rural areas, so we want the development of starter homes to make a significant contribution to housebuilding in these areas. The use of rural exception sites is an established means for supporting sensitive housing growth where it is locally supported and meeting local needs. It is very important to underline that. We do not want to undermine the operation of rural exception sites.
Our rural productivity plan, which was published last August, set out priorities for growing the rural economy and the need to increase the availability of housing in rural towns and villages to help them thrive. In our consultation on changes to the NPPF we have consulted on amending the policy on rural exception sites to allow starter homes to be included. The current policy allows for some market housing on rural exception sites to enable some cross-subsidy of affordable housing, and we have tested at consultation whether this mix should include starter homes.
We also consulted on allowing local planning authorities to have the flexibility to require a local connection test on rural exception sites. This reflects the particular needs of rural areas, where local connections can be important and access to the housing market for working people can be difficult, as a number of noble Lords have pointed out. It would also reflect the current local connection tests on rural exception sites.
My noble friends Lord Deben and Lord Young talked about philanthropic landowners; the question of whether they will continue to bring forward their land for the best-intentioned purposes needs to be addressed. We have absolutely no wish to switch off the operation of these sites. They can provide a really good mix of tenures, including private housing for cross-subsidy, and starter homes might be another tenure type.
I would like to make several points here. First, many of the sites that come forward in rural areas are small. When we start to deliberate about the site size for starter homes, it may well be that many sites will not be relevant.
Baroness Hollis of Heigham
Does the Minister have any idea yet whether she is talking about sites accommodating 12 or 20 homes?
Baroness Williams of Trafford
I do not know but, as I said either earlier today or on Tuesday—the days are rolling together—I expect that the size of the sites will be roughly what we see now in terms of affordable housing. However, that is my guess rather than something that I have been informed about.
Lord Kennedy of Southwark
I thank the noble Baroness for giving way—she has been very kind in that respect. Part of the problem is that you may agree a certain size for a site but then a rumour goes round that that is not the case. Although it may not be the intention, people will fear that these sites will be lost, in which case they will not bring the land forward for use.
Baroness Williams of Trafford
Perhaps I may make another point about covenants, which many philanthropic landlords attach to their sites. We appreciate their benefits. Sometimes sites are donated to the local community and, if the donor wants to put a covenant on the land prohibiting its use for starter homes, that is within their gift. Although, again, we stress the benefits of starter homes in communities that are looking to create homes, we also appreciate the other factors that are in play.
We want to see policies working together. My noble friend Lord Young of Cookham highlighted how well-intentioned policies working together can in fact conflict with each other. We know that we need growth in rural areas to allow young people to stay in the communities in which they grew up. However, we also want neighbourhood planning to play a role in identifying the sites on which starter homes should be built so that there is collaboration between the landowners, the developers and the communities that they serve. That is an important point. One of the benefits of neighbourhood planning has been its collaborative nature, and that must be a factor in the doubling of acceptability of housebuilding that we have seen. Local people feel far more in control in terms of what is put in their community than perhaps they did 10 or 20 years ago. That is not a political point; it is something that we have all learned over the years.
However, we do not agree that starter homes on rural exception sites should be in perpetuity rather than having the five-year restriction that we are proposing. We believe that there should be a consistent model for first-time buyers. Why should rural workers not have the same opportunities as workers in towns and cities? They, too, need to move and grow.
We are currently considering all representations and will issue our formal response to the planning consultation in due course. Any changes to national planning policy will be a material consideration which a local planning authority must take into account when making planning decisions and developing planning policy. If changes are made, starter homes will be an additional, not a replacement, type of affordable housing which can be delivered on these sites following consultation with the local community.
Amendment 50C would allow local councils to ensure that the requirement for starter homes did not have to be met on rural exception sites. We will consult separately on the starter homes requirement for suitable, reasonably-sized sites for the regulations. We will also test in the consultation any exemptions from the requirement. Again, it is right that we discuss this with the housing industry and ensure that we achieve the best outcome.
I want to be clear that the consultation will include a minimum site size for the starter homes requirement. Any sites, urban or rural, below the size threshold will not, as I have said, be subject to the starter homes requirement. Starter homes can be delivered on sites below the threshold but this will not be a compulsory requirement; it will be a matter for local determination.
Baroness Hollis of Heigham
Forgive me for interrupting, but can the Minister tell us when we will know what the minimum size is? Will it be measured in hectares or by planning density? Can the Minister give us a feel for this? Are we talking about an acre?
Baroness Williams of Trafford
My Lords, I would strongly imagine that we are talking about numbers of units.
Baroness Hollis of Heigham
Does the Minister have any idea what sort of numbers she is talking about?
Baroness Williams of Trafford
I do not. What I have said is that I strongly expect—although I do not know—that it would be very much in line with what was expected through the affordable housing duty. However, that is just a guess from me at this point.
Lord Kennedy of Southwark
The Minister said that people living in rural communities should have the right to benefit from the starter homes policy. I am absolutely fine with that, but the whole issue is about how much people earn and whether they would be able to afford these starter homes. My noble friend Lady Hollis has mentioned a number of times that these homes may be unaffordable. During the debate a couple of days ago my noble friend talked about an area in Norfolk where building two or three bungalows in the village would free up some of the family homes in order to get people to go there. It is regrettable that that is going to be the case here. If we stick with this policy, we are not looking at the wider implication that, actually, it is unaffordable for most people in rural areas.
Baroness Williams of Trafford
I do not agree with much of what the noble Lord said. Obviously, the mix of tenures is essential, whether it is starter home level, shared ownership, affordable rents or social rents, and a number of funding streams are available for the different types of tenure. I think that the noble Lord and I may be saying the same thing but in a different way. I hope that the noble Lord will feel happy to withdraw the amendment.
Lord Greaves
Before the noble Lord does that, and I have no doubt that he will, the Minister made some interesting remarks about the importance of neighbourhood planning in relation to starter homes. At some stage in Committee, she said that there are now 1,600 neighbourhood plans at some stage of gestation. A few of these have been adopted but none of them will be busying themselves at the moment with starter homes, because starter homes are still being discussed in this Committee. What will be the process of neighbourhood planning in relation to starter homes? Will starter homes be put into the mix of that large number of neighbourhood plans that are still being worked out and will go to inspection and referendum, et cetera? Or will it require a process of amendment and change in adopted neighbourhood plans to cater for starter homes, which is, of course, a time-consuming and bureaucratic process? Will there be a presumption that in areas with neighbourhood plans, which are strongly biased towards rural areas and places with parish councils, there will be no starter homes until the neighbourhood planning process has dealt with how many there should be and where they should be?
Baroness Williams of Trafford
My Lords, I think it will be done through amended neighbourhood plans. It also may be done through the NPPF. I will need to come back to the noble Lord on that, because the mechanism is important. I probably would have known the answer about six hours ago but, at this time of the day, I do not know.
Lord Campbell-Savours
Under the starter home arrangements, I envisage in a village half a dozen or a dozen terraced houses sold under this principle, subject to strict locals-only Section 52-type arrangements, whereby there is no great market when you sell at the end of five years and where people have the right of ownership. That enables young families to stay in villages in properties that they own, rather than having to rent.
Baroness Williams of Trafford
My Lords, six terraced houses would be quite a small site size. It is important for noble Lords to know in due course what the site sizes will mean, and I will let the noble Lord know. I am guessing at this point, but six sounds like a very small site size, and therefore probably exempt.
Lord Kennedy of Southwark
Just one final point. I was pleased to hear that we may be agreeing after all; I am not sure that we are, but that would be great. The point about rural areas is not just what happens in 10 years—the important issue is the people who are living there.
Baroness Williams of Trafford
I think I addressed quite a lot of my remarks to the local test.
Lord Cameron of Dillington
My Lords, I thank all noble Lords for their participation in the debate and for their nearly universal support—especially the noble Lords, Lord Young and Lord Deben, who are both old hands in this area—even if they only assisted in the birth of the site, not being the rightful daddy, as the noble Lord, Lord Best, said.
I was reminded when the noble Lord, Lord Deben, was speaking of a phrase that I believe he did conceive when he was Secretary of State at the DoE, “executive ghettos”, which is what we are all trying to avoid. I have heard another phrase recently in planning philosophy, which is “place making”. What we are trying to do here is place saving, because I hope that, mostly, we already have reasonably good places in the countryside.
The noble Lord, Lord Campbell-Savours, talked about Section 52 agreements. I am not too concerned how we organise the exception sites or homes for locals; the real point about the exception sites is that they are outside the planning system: the land would not normally get planning permission of any sort. It is the cheapness of the land and the way that the house can be built by the housing association which enables houses to be very good value for locals, not only the control of the marketplace, as the noble Lord rightly says, which the Section 52 agreement dictates. They start off being of very low value. I would be very keen on trying to maintain the houses being owned by a housing association; in that way, no one owns them outright so that they can sell them, whether at a low value or not.
I repeat that 45% of all rural affordable houses built in the past year are on exception sites. Without the amendments, the supply of exception sites will dry up; neither landowners nor parishes will accept them. The noble Baroness, Lady Hollis, said that, without them, we could easily kill the village. It depends what your definition of village is, but it would definitely kill the community, which is perhaps the major point, as they very possibly revert to the said executive ghettos.
I am glad that the Minister supported the sentiment behind the amendments, even if she did not totally accept them, but I was very dismayed when she said that starter homes could be allowed on exception sites, and would also still fall out after five years and be sold as homes. That very statement will kill exception sites stone dead. I cannot see parishes or landowners agreeing to continue on that basis. It is all very well saying that the landowner can place a condition of sale, but conditions of sale are very difficult and expensive to enforce, particularly after the first sale.
I hope that we can continue to discuss the arrangements between now and Report so that these executive sites will be able to continue to come forward, but at the moment I do not think they will.
Lord Deben
I support the noble Baroness opposite. This is not a sensible amendment and I am sure that my noble friend will not accept it. It is not sensible for the reasons that the noble Lord, Lord Greaves, put forward. It also reminds us that we are going to come on to the whole question of infrastructure. Again, this is a Bill that does not say what I hoped it would about greenfield sites. It has also not faced a number of infrastructure issues. It is, therefore, going to have this kind of amendment—whether good or bad—because these issues have to be faced. For example, I do not see how we can go forward with the starter homes concept—which I agree with; I am very supportive of my noble friend on it—if we go on having a situation where, whenever anybody gets a planning permission, not only does the local water authority not have the right to be consulted but it has to connect any new property to the sewage system even if that causes a flooding risk. We have not faced that issue and yet we have a Bill which is about all of that.
It seems that there is quite a lot of work to do between now and the point where we get to that issue. I feel that I ought to warn my noble friend that we will have to discuss those issues in detail if we are to give her the support which many of us would like to give, because they are not yet in the Bill and we need to have them there.
Baroness Williams of Trafford
My Lords, this has been an interesting debate and I thank all of your Lordships who have taken part. Perhaps I may start by addressing Amendments 51 and 52. Clause 5(4) already makes provision that an authority must make these reports “available to the public”. The clause also provides that the Secretary of State may make regulations “about their timing” and whether they should be combined with the local authority’s authority monitoring report. The authority monitoring report is an existing requirement, which must be published on at least an annual basis. We do not want to introduce unnecessary burdens and it would be sensible to combine starter-home reporting with this existing requirement. We will be consulting on the monitoring requirements associated with starter homes shortly. We want to understand wider views on what the reports should contain and their arrangements for publication.
Furthermore, local planning authorities are already required to report on affordable housing delivery. They must report on the extent to which their planning policies are being achieved through their authority monitoring reports. This is a statutory requirement in Regulation 34 of the Town and Country Planning (Local Planning) (England) Regulations 2012. Measures under this amendment are already covered by the legal framework.
Amendment 52 would require all local planning authorities to demonstrate that these sites were not otherwise needed for employment, retail, leisure, industrial or distribution use. Our planning policies look to encourage the productive use of brownfield land. Our starter homes exception site policy has a crucial role in delivering starter homes by providing new and cheaper land to be used for housing—and, because the land tends to have a lower value, this helps to improve the viability of starter home developments. This is why we have consulted on extending and strengthening this policy as part of our national planning policy consultation. Let me be clear: this is not about building houses at the expense of all other types of use but about releasing land where there is no reasonable prospect of it being used for its original purpose.
As part of the consultation, we invited comments on evidence to be used to justify the retention of land for commercial or similar uses and on whether there should be a fixed time limit on land retained for commercial uses. We expect local authorities to be proactive in identifying and publicising these exception sites and, where applications for starter homes come forward, in being prepared to give planning permission. The intention behind the new duty to promote starter homes in Clause 3 is to encourage local authorities to do this. Before they grant that permission, of course, local authorities will need to assure themselves that this brownfield land is an exception site and, in particular, that it is underused and unviable in its current land use. I believe that local authorities are capable of taking this decision using our guidance without the Government monitoring them. For this reason, Amendment 52, which would require all local planning authorities to report in detail about the appropriateness of sites, is unnecessary and bureaucratic.
Amendment 53 would require the Secretary of State to prepare a report on an annual basis containing information on the construction and sale of starter homes in the area of each local authority. As part of this, the report should contain information about the household composition and incomes of persons who have purchased a starter home in each area. As the noble Lord, Lord Greaves, put it rather articulately, this would not be a particularly proportionate approach to reporting on the operation of the policy. Any monitoring requirements should not be overly onerous or waste precious resources. I believe that reports should be published at local level, to ensure that first-time buyers can access them easily and that local councils can be accountable.
Baroness Grender
My noble friend Lord Greaves was actually talking about the main Labour amendment and not Amendment 53, just to be clear.
Baroness Williams of Trafford
I do apologise—I was trying to give him credit because I disagree with him on quite a lot of things. But he knows what I mean.
Lord Greaves
I think that the Minister was trying to stir up trouble on these Benches—I would not dare to contradict my noble friend Lady Grender.
Baroness Williams of Trafford
I was not trying to stir up trouble—honestly, my Lords, it is getting a bit late for that. Amendment 50F is, I think, the appropriate one, which the noble Lord articulated very well. It would seem to be quite strange for the Secretary of State to produce an infrastructure plan as part of the starter-homes programme.
We particularly want to see local authorities and infrastructure providers planning positively for the broad infrastructure needs of their areas as part of local plan-making, and our starter homes reforms will not change this. In particular, local planning authorities will still be able to secure Section 106 contributions—which we spoke about earlier—for site-specific infrastructure improvements required for development, including new roads or financial contributions to local schools. Finally, we have announced a £1.2 billion fund to ensure that sites are prepared and have suitable infrastructure on site. This will support delivery of starter homes on brownfield land.
A couple of noble Lords talked about design, and I wholeheartedly agree about innovative and energy-efficient design. The Government have a design panel looking specifically at avoiding, I suppose, some of the mistakes of the past and providing far more innovative designs for the huge number of houses that we are expecting to deliver.
I thank the noble Lords, Lord Kennedy, Lord Beecham, Lord Kerslake, and Lord Best—in fact, the noble Lord, Lord Beecham, has gone so I will not thank him—for explaining why they have concerns about Clause 6. This direction would state that the incompatible policy must not be taken into account when certain planning decisions are taken. The remaining local development documents would not be affected and the local planning authority may still have regard to these in its decision-making in the usual way. The compliance direction would not apply to policies forming part of neighbourhood plans and the local plan. Communities would continue to shape development in the area. This is a reasonable and balanced approach.
The compliance direction must set out the Secretary of State’s reasoning for making the direction and must be published. A copy must be given to the local planning authority and the compliance direction would remain in force until revoked by a further direction given by the Secretary of State. We will set out very clear guidance on the operation of the duties so that all local planning authorities are fully aware of what they need to do to comply with them. I will reassure noble Lords at this point that the compliance direction is a backstop provision. It will only be used in limited circumstances where the local planning authority is in breach of its starter-home duties and we envisage that it would be rarely used
The Secretary of State will decide whether to issue the compliance direction based on information within the monitoring reports that local planning authorities are required to produce under Clause 5. There will be the opportunity for councils to submit further evidence to the Secretary of State and any exceptional circumstances could be considered at this point. It will only be revoked by a further direction if the Secretary of State is satisfied that the local planning authority has taken adequate steps to meet its duty.
Turning now to the amendment to Clause 7, Amendment 53D seeks to place a duty on the Secretary of State to publish a strategy that includes targets for reducing the number of children living in temporary accommodation with their families. Under the Homelessness Act 2002, all local housing authorities must have in place a homelessness strategy and must consult public or local authorities, voluntary organisations or other persons, as they consider appropriate.
Each housing authority records information pertaining to its statutory homelessness activities under Part 7 of the Housing Act 1996. This includes the number of households and children in different types of temporary accommodation on a quarterly basis. The data are published on the GOV.UK website and allow comparison at a local authority, regional and national level. I think that it is unnecessary. Local housing authorities already record the number of children in temporary accommodation. They have clear duties to secure settled accommodation for them and must produce a homelessness strategy setting out how they will tackle the issue.
To conclude, I think that the Government’s current proposals strike the right balance. At this stage, I hope that the noble Lord will be happy to withdraw his amendment.
Lord Greaves
Before the noble Lord speaks, I have a question for the Minister. I am trying to work out how the compliance directions will work. Are they intended to apply to future development plan documents, including the core strategy or whatever and site allocations, or retrospectively to development plan documents that have already been historically agreed and which have things in them that conflict with the concept of starter homes?
Baroness Williams of Trafford
My Lords, I think that they will be for future plans, because they will include starter homes, but I will correct that if I am wrong.
Lord Greaves
In that case, why is it necessary to do this? Why cannot any defect in relation to starter homes be dealt with during the inspection?
Baroness Williams of Trafford
My Lords, that is a very good question. Can I come back to the noble Lord on that?
Lord Kennedy of Southwark
My Lords, I thank everyone who has spoken in the debate this evening. My amendment was only a probing amendment, although I fully accept that it is not the best that I have ever proposed from this Bench or elsewhere in the House. It is important that we had a debate on infrastructure, and we will discuss that further in the days ahead. It is very likely that it will come back to us on Report.
I very much agree with the noble Baroness, Lady Grender, on her concerns about developers having these proposals. I am also grateful to the noble Earl, Lord Lytton, for his support, as well as my noble friends Lady Hollis of Heigham and Lady Young. With that, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, I will be as brief as I can. This amendment is in my name and that of my noble friend Lord Beecham. No one can deny that the sections of the Bill on starter homes are not without their critics. They include an interesting policy idea for building homes on brownfield sites that had not previously been considered for housing, having transformed overnight into the main housing policy for the Government to the exclusion of all others. This has been done without a Green Paper, without a White Paper, without any pre-legislative scrutiny or proper consultation and without any testing to see if this is the right way forward to deliver the homes that we all agree need to be built. I hope that noble Lords, whatever their view, can all agree that it is a bit risky and not the way to roll out a new policy. The saying “Act in haste, repent at leisure” could not refer to a more suitable policy.
On top of that, we must not forget that we have not seen a regulation yet, and we are not going to see the regulations perhaps until the autumn—which, when we consider the implications of this Bill, is nothing short of outrageous.
To try to bring some order to the whole process, we put down Amendment 53E for consideration by your Lordships’ House. It would provide for a sunset clause to bring an end to the programme unless the Secretary of State makes regulations for these clauses not to be repealed. That statutory instrument would have to be laid and approved by both Houses of Parliament. The period of three years was selected because we are in a fixed-term Parliament, so the Government can accept this amendment in the full knowledge that they will be able to get the regulations through Parliament without the risk of a general election getting in the way—unless of course some unforeseen circumstances arise. This is a useful device for the Government to consider, and I hope the noble Baroness will look at it carefully. I beg to move.
Baroness Williams of Trafford
My Lords, the noble Lord has just left me with a very horrible thought, but I thank him and the noble Lord, Lord Beecham, in his absence, for their amendment to introduce a sunset clause to the starter homes provisions. The effect would be that the starter homes provisions would be repealed unless affirmative regulations permitted them to continue.
I am sure the noble Lord will not be surprised that I strongly resist this amendment. This Government made a manifesto commitment to deliver 200,000 starter homes. The electorate supported the manifesto and expect the Government to deliver. We intend starter homes to be a new but enduring aspect of housing delivery. We have heard how first-time buyers are increasingly unable to access the housing market, and we want to ensure there are new opportunities for home ownership and to support young people into home ownership.
A sunset clause would introduce uncertainty to delivery. It would cause developers to pause as the sunset period approached and would be unhelpful not only in starter home delivery but in overall housing supply. If we want to achieve the uplift in housing supply we need, we must give clarity about the future rather than uncertain messages.
I accept that starter homes are new and we are embarking on a new journey in affordable housing delivery. We have made provision in regulations that give us flexibility for the future in setting the starter home requirement, the minimum site threshold and any exemptions to the requirement. With that assurance, I hope that the noble Lord will withdraw the amendment.
Lord Kennedy of Southwark
I am very happy to withdraw my amendment, but want to place on the record our thanks from these Benches, and from the whole Committee, to the noble Baroness. She has handled the debate today and all the questions from around the Committee with great skill. We appreciate that she has been very kind to us all and thank her very much for that. With that, I beg leave to withdraw the amendment.