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 support Amendment 1. For the purposes of Report, I declare my interests as a farmer and landowner, as a rural landlord of domestic property, and as the ultimate landowner of an exception site leased to Hastoe Housing Association.
I wish to make only one point—to re-emphasise what others have hinted at. We are all aware of the shortage of affordable housing in our country. We are also aware that this is not a short-term problem. I expect that most of us will have received the rather bleak report from the National Federation of Property Professionals, predicting that property prices and rents will continue to rise until at least 2025 because of the shortage of housing, particularly affordable housing. Meanwhile, the Government have promised to build 200,000 new starter homes by 2020. This will be the main plank in their policy to deal with the severe shortage of affordable housing. Let us say that it is 50,000 starter homes a year, although I expect that it is even more than that by now. The transience—that is the key word—of these starter homes, which causes them to fall out of the affordable sector currently after only five years, maybe eight, means that we will have to go on building 50,000 starter homes a year for ever.
We are trying to fill the bath with the plug taken out. Amendment 1 is an effort to put the plug back in. Therefore, I strongly support it.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, before I begin, I note that those of us discussing the housing Bill on the last day before recess were the last ones out of this place, and we are the first ones back in to discuss it today. I am very glad to see the noble Lord, Lord Kennedy, back, as well as the noble Baroness, Lady Bakewell—who is much chirpier than she was. I apologise for anything that the housing Bill took out of noble Lords.
Before I turn—or, in some cases, return—to the amendments we are discussing today, noble Lords will have seen that over the recess I wrote giving further detail on how the Government have reflected on the debate so far, and saying that we will amend the Bill as a result. It is worth considering where we have come from. For example, to reflect noble Lords’ concerns about starter homes we introduced a requirement to consult when changing price caps, and have now introduced flexibility on the upper age limit so that more couples and injured service personnel can benefit. Many noble Lords—for example, the noble Lords, Lord Best and Lord Shipley—were also concerned about parents exploiting starter homes for their children. Today, I will move an amendment to address that.
The consultation document we published in March—referred to by the noble Lord, Lord Beecham—has been directly influenced by your Lordships’ House, as have amendments I will move later when we discuss banning orders. Those amendments were inspired by contributions from the noble Lords, Lord Beecham and Lord Campbell-Savours. We are due to debate electrical safety, and I look forward to discussing with the noble Baroness, Lady Hayter—who is not yet in her place—and the noble Lord, Lord Beecham, the steps we can take to make homes as safe as they can be. The amendment I will move later is a direct response to the points raised through your Lordships’ House.
I will continue to reflect as we turn to later parts of the Bill. I know, for example, that there is a lot of concern that noble Lords would not have the opportunity to see how we plan to implement the Bill’s clauses on social rents. I will write this week giving that further detail, so that noble Lords can approach next week’s debate as informed as they can possibly be.
I said before the recess that I trust that, as we discuss this Bill on Report, we can move closer on a number of matters about which we will all agree. I do not think there has ever been any dispute over the need to increase the number of homes built to meet this housing crisis. There is the need to ensure that housing markets and the planning system that enables their growth work as well as they can. I hope that a number of our debates will not divide us, and that we will take to Third Reading a Bill that is practical and improved as a result of the expertise that noble Lords have shown throughout.
Turning to Amendments 1 and 5, I thank the noble Lords, Lord Beecham and Lord Best, for Amendment 1, which would require the repayment of the 20% discount reduced by 1% for each year of occupation for a period of 20 years. I also thank the noble Lords, Lord Shipley, Lord Beecham and Lord Kennedy, for their Amendment 5, which would require the minimum 20% discount on a starter home to be retained permanently with the property. The noble Lord, Lord Beecham, asked for clarification on when the discount might be larger. That would be in the situation where local authorities, for example, negotiated a larger discount. I think it was my noble friend Lord Porter who pointed out how he had done that in Lincolnshire. It is difficult to speculate at this point where this might be done with starter homes. The point is that local authorities can and do negotiate larger discounts.
I made clear in Committee that we want to ensure that starter homes are sold to those genuinely committed to living in an area and not to those who would simply wish to quickly sell to secure financial gain. However, we also want to support mobility. Many noble Lords expressed concerns about the proposed five-year restriction that would enable the owner to sell at full market value after five years of occupation. I listened carefully to the quite extensive debate in Committee and to the views of the sector. As a result, we are seeking views in our consultation on whether a tapered approach should be introduced. This would enable owners of starter homes to sell at an increasing proportion of market value over time, stepping up to 100% after a maximum of eight years. We consider that restrictions beyond eight years would unreasonably limit young people’s ability to move on. That is a similar point to the one made by the noble Lord, Lord Taylor, on the growing family, although I think that we made them for slightly different reasons. We do not want these houses to be restricted in perpetuity as we think that that would make it more difficult for the first-time buyer to move to a new home as their family needs grow and their circumstances change. Starter homes are for young first-time buyers whose needs will change. If you only ever own a proportion of the property, the step to full ownership is a much, much greater challenge. We want to support mobility, not hinder it.
Baroness Williams of Trafford
My Lords, I apologise for the delay—first day back and all that—but I will now move the amendments. Amendments 2 and 3 require qualifying first-time buyers to be a minimum age of 23 to be able to purchase a starter home.
As I made clear in Committee, the Government want to strongly discourage starter homes from being considered as commercial investment opportunities rather than homes to live in. Many noble Lords expressed concerns about the eligibility criteria for those able to purchase a starter home, including the possibility of such homes being used as an investment vehicle. One area of risk has been identified as parents buying starter homes in the name of young children, or even their young adult children who are not yet in a position to buy because they are not in stable employment but in higher education.
I listened carefully to the debate in Committee, and, as a result, we have tabled the amendment to introduce a minimum-age criterion that would limit the ability to purchase a starter home to those who are aged 23 or over. This would prevent individuals purchasing a starter home in the name of a child or perhaps a student under the age of 23.
We have considered the age that adult children leave education or training to enter the job market so as to become realistic first-time buyers in their own right. We estimate that about four-fifths of higher education students turn 23 either during their final year or after graduation. This minimum age requirement strikes the right balance between providing real opportunities for hard-working young people and families to secure a home and discouraging starter homes from being used as an investment opportunity.
My department’s analysis of Council of Mortgage Lenders data suggests that, in 2015, only 4% of first-time buyers were under 23. I expect that this minimum age requirement would directly impact a relatively low proportion of potential buyers, but would restrict the scope to game the opportunity provided by starter homes. I therefore ask that this amendment be agreed to.
Lord True (Con)
My Lords, I was unable to attend the Committee sitting in question, but I read the report carefully and understand entirely where my noble friend is coming from. She said that it may affect only 4%. I congratulate her on responding to your Lordships in seeking to address the potential abuse that she rightly identifies, but there is always a risk of viewing legislation from a London position and in a world where so many people who write and think about legislation went to university. Many people do not go to university, and in some parts of the country property values are quite low. In that 4%, there will be aspirant young couples—plumbers or mechanics married to teachers—who have the same hope to make a start in life and who should not be excluded from the opportunity for the sake of closing a loophole.
I know how difficult this is, and I will certainly not oppose my noble friend’s amendment, but it will go back to the other place as a Lords amendment, so it will be subject to further consideration. I ask that we have a mind in this great House to that small 4% who may not have been to university, do not live in high-property-value areas but want to be first-time buyers and to benefit from the provision. I congratulate my noble friend on responding to the House, but I hope that, when the Bill goes to another place, my right honourable friend the Secretary of State will give further consideration to twiddling the amendment a little.
Lord Beecham
My Lords, the Opposition support the Government’s amendment here. I guess that a line has to be drawn somewhere with regard to age, and the Government are probably right to have drawn it where they have.
I also support the amendment in the name of the noble Lord, Lord Lansley. I hope the Government will take it back in a positive sense because he makes a strong argument for extending the principle to these different forms of ownership—they are quite compatible with the Government’s intentions, after all—and meeting the particular needs that he has so clearly identified. I hope the Minister will feel able to say that she will take that back positively and perhaps return later on Report if she cannot accept it today. It would be ideal if she could accept it today but I guess that she may not have that freedom. Still, a positive response would be very welcome.
I sympathise again with the amendment moved by the noble Lord, Lord Best. I am not sure whether that needs to be in the Bill so long as it is on the record that it is the Government’s intention that the thrust of the amendment would be realised in practice. If the Minister were able to give that assurance, that might avoid the need to amend the legislation. That is a matter for her judgment, but it might be a way forward.
Baroness Williams of Trafford
On the government amendment regarding the minimum age of 23, I take the points made by my two noble friends. The under-23s are of course aspirants too, and in certain parts of the country this policy might really help them. But as the noble Lord, Lord Beecham, says, we have to draw the line somewhere and, given that 96% of 23 to 40 year-olds will benefit, that is where we have chosen to draw it.
I thank my noble friend Lord Lansley for his Amendment 4. As noble Lords will know, we are committed to delivering the 135,000 shared-ownership and 10,000 rent-to-buy products. Each has its place, and these products can and do complement each other. They can be considered by councils as part of their wider affordable-housing requirements for their area, and the starter homes clauses will not prevent these developments coming forward. We will be touching on this later on Report.
However, trying to blend them would create complexity and lose the distinctive characteristics of each, and it could put at risk our starter homes manifesto commitment. For example, if a young person entered a right-to-buy arrangement, at what point in their occupation of the property would they be committed to purchase? After how many years of occupation would they be entitled to sell at an increased market value? That could be difficult to justify when we need to deliver as many new homes as possible.
Still, we recognise that there may be different routes to purchase, and over time there may be different opportunities to consider how these will fit within the overall starter home model. Much of the detail on the model will sit in secondary legislation, and the definition of purchase in the Bill is broad enough to allow different purchase mechanisms to be used. As the starter home model rolls out, we will keep it under review.
I also thank the noble Lords, Lord Best and Lord Beecham, and the noble Baronesses, Lady Andrews—who is not in her place—and Lady Bakewell, for Amendment 10. Our consultation on the starter homes regulations sets out potential flexibility on the on-site starter homes requirement. We recognise that some developments, including age-restricted schemes, do not easily lend themselves to an on-site provision, and we do not want to render those schemes unviable or undeliverable.
Lord True
Before my noble friend sits down, I apologise for not having reminded noble Lords of my interest as leader of a local authority, although the issue that I raised would not apply there. I was disappointed by my noble friend’s response and by the response from the Front Bench opposite. If the Labour Party does not recognise the potential situation of young people in craft or trade, who may be precisely the sort of people who are caught if we have an arbitrary age limit, that is disappointing. This issue may be dealt with in regulations, but regulations cannot solve the problem if there is not primary legislation at the cut-off stage. I ask only that there is some criterion where people under 23 have to show whether they are in full-time employment or have their own income as the basis for securing a loan. It ought to be possible to bring in that other 4% of aspirants and I hope that that will be considered.
Baroness Williams of Trafford
I would not like my noble friend to think that I did not agree with his point about aspirant young people. I totally agree with him. Without closing down the conversation, I pay tribute to what he said, and things may come forward to deal with that age group.
Lord True
My Lords, I, too, should declare an interest as a member of the Leaders’ Committee of London Councils. I should make it clear that London Councils is sympathetic to the amendments in the group, although I do not speak on its behalf.
I hope very much that my noble friend, in summing up, will show the same understanding she had in Committee for the issues raised in the amendments. There is certainly a concern about the hierarchy of need and the difficulty in some areas of providing affordable housing, and the potential problems, particularly in high-income areas in my case, of starter homes squeezing out. I know that it is not the intention of my noble friend Lord Kerslake, or anybody else, but I do not want to see us getting to the point where we make it less likely that a government initiative, which was a manifesto initiative, and has been supported, will be implemented across the board. It is an extremely difficult balance to strike.
I am seeking something that is not necessarily on the face of the Bill but which shows a real display of understanding by the Government of some of the tensions and difficulties. I think that I heard in Committee—and I am sure that I will hear again today—about the difficulties of providing for the gamut of different types of housing needs in an area. That will certainly include affordable for rent, starter homes where we can do them, and other things of a different nature. So I would be nervous of putting something in the Bill that might inhibit or be used to inhibit—it could be the basis of legal challenge, or whatever—the delivery of starter homes, but I hope that my noble friend will show very much that she has heard and understands the spirit of the amendments.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, for their amendment, which would require local planning authorities to promote the supply of other types of social and affordable housing in addition to starter homes. I thank, too, the noble Earl, Lord Listowel, for his amendment to require key-worker housing and temporary accommodation to be included. I also thank the noble Lord, Lord Beecham, and the noble Baroness, Lady Bakewell, for the amendment requiring local planning authorities to promote the supply of other home-ownership products and affordable homes to rent, as well as starter homes.
As I said in Committee, we want to address a specific gap in the market for young, first-time buyers. An additional product is therefore required to help a generation into home ownership. A recent report by NatCen Social Research found that home ownership continues to be one of the most important milestones in life for young people. For example, 77% of respondents said that longer term, they would prefer to own their own home. Just over two-thirds of respondents reported that owning their own home was essential to feeling that they had actually succeeded in life.
That is why we are legislating for starter homes to ensure that delivery will be supported across all areas. Support is available through our Help to Buy ISA to help purchasers to save for a deposit. Starter homes will offer an affordable step on to the property ladder, with lower costs and the benefit of immediate ownership, helping people to achieve the step up to their second property in due course.
Clause 3 expects councils to actively support starter homes as a new product in their housing mix. But it does not remove their ability to deliver other affordable housing and home-ownership products alongside starter homes, and we fully expect them to continue in this vein. Nor does it remove their local plan policy. Local authorities already have legal duties to house the most vulnerable in society and to consider housing needs in their areas.
We are helping people to access homes that they can afford in a number of different ways, and the Bill should not be seen in isolation. Our spending review commitments represent the largest affordable housebuilding programme by a Government since at least 1979. We believe that affordable shared ownership and other home-ownership products have an important role to play as part of the diverse and thriving housing market in helping those who aspire to home ownership but may otherwise be unable to afford it.
The spending review has committed £8 billion to deliver a further 400,000 new affordable housing starts, including the £1.6 billion to deliver 100,000 affordable homes for rent and £4.1 billion to deliver 135,000 shared-ownership homes. It builds on our strong track record of affordable housing delivery. We have delivered 277,000 affordable homes since 2010, including nearly 200,000 to rent. In the last year we have added more than 50,000 social and affordable rent homes, and twice as much council housing has been built since 2010 than in the previous 13 years.
We fully believe that local planning authorities know their area. We would expect them to seek other forms of affordable housing such as social rent where it would be viable, and we are currently consulting on the starter-homes requirement for the regulations to seek wider views so that we get this right. Local planning authorities have the option to release more land for housing of all tenures, as needed, in their local areas. They are very aware of their commitments to meet local housing needs and they will strive to meet these needs.
Amendment 7A, in the name of the noble Earl, Lord Listowel, specifically refers to families requiring temporary accommodation and to key workers. As I have already outlined, there are a range of tenures available that could help accommodate key workers. Councils can promote affordable housing schemes for key workers if they want to prioritise this. As I explained in Committee, they are also required to consider homelessness under the Homelessness Act 2002. But our aim with this legislation is to drive a focus on delivering starter homes—a new product that is much needed to address a growing problem among the under-40s. Our legislation focuses on this product to ensure that it has the necessary attention to secure delivery, but not to divert attention away from other products. We know that local authorities will continue to look to provide other forms of housing tenures. We do not need to promote these as part of this duty.
I now turn to Amendments 8 and 9, which I thank the noble Lord, Lord Kerslake, for. They would allow a local planning authority to have regard to the provision of starter homes, based on its own assessment of local housing need and viability. I have heard the arguments that planning for starter homes should be devolved to the local level. I will explain the Government’s proposals and why we are taking forward our requirement.
The English housing survey, published in February, found that 19% of all households live in the private rented sector and 17% in the social rented sector. This amounts to 8.2 million households. We know that aspiration for home ownership is high. This requires a new approach. Starter homes are a manifesto commitment and a national priority, so all local authorities must play their part in delivery. Therefore, we are currently consulting on a starter homes requirement to be set out in regulations.
We are seeking views on a 20% starter homes requirement on sites of 10 units or more, or larger than half a hectare. We accept entirely that this may not be appropriate for all residential schemes and a number of exemptions are being proposed, such as: a general viability exemption for those residential developments where it can be clearly demonstrated that the starter homes requirement would make the site unviable; and potential exemptions for specific housing types, such as estate regeneration schemes and developments led by affordable housing. We are also suggesting that there are particular cases, such as private rented sector developments and older people’s housing, where an off-site commuted sum in lieu of on-site provision would be more appropriate. This amendment would bring considerable delay to starter home delivery. Noble Lords are very aware of the difficulties in some councils of bringing forward local plan policies: many years of delay in some cases, and 30% of councils have not adopted a post-2004 plan. The Bill includes measures to accelerate the process but we cannot risk these delays for starter home delivery.
Baroness Williams of Trafford
My Lords, I thank noble Lords, particularly the noble Lords, Lord Cameron and Lord Best, for the persuasive arguments they put forward in Committee. We would not want to create some of the effects they talked about, such as benevolent landowners putting forward sites that are then slapped with a starter home policy. I ask the noble Lord, Lord Cameron, to allow me to take this issue away and return to it at Third Reading. I hope that that will help him and other noble Lords who plan to speak on this amendment.
Lord Beecham
My Lords, I have a good deal of sympathy with what the noble Lord has just said. In particular, I very much commend his implicit view that we should not really be talking about individual developments or about just catering for a particular group of people but should be concerned with communities with a range of interests, ages and people of different backgrounds—not simply a group, important though it is, seeking to purchase homes for the first time.
It also seems to me that this part of the Bill cannot be read just on its own terms, as if it is unrelated to some of the material that follows. In the planning section of the Bill, there is of course the issue of PIP—permission in principle—and the Government’s ability to effectively prescribe what is to happen on brownfield and other sites. The two things seem linked to me, and the suggestion in these amendments is one that the Government should consider very carefully. We have heard a good deal about local aspects—the Minister herself was saying just a few minutes ago that the Bill would make provision for local people—but what is meant by local in this context? For example, you could have sites in London, in hard-pressed boroughs with their own housing needs, which would no doubt become available for starter homes, potentially at the expense of people from that particular borough, unless the Government are able to say that they could be limited to the residents of that borough—which I think is a bit unlikely, although it would be interesting to see whether the Government would contemplate that.
We have of course seen considerable changes in the make-up of communities in inner London and in other cities, and the danger seems to me to be that without Section 106 agreements, and without looking rather carefully at who might benefit from the desirable provision of starter homes, and from where they might be coming, we could simply be importing people into the area at the expense of those already living there. Perhaps the Minister could indicate whether such a consideration has been taken on board and the extent to which it might be reflected in the implementation of this part of the Bill. Otherwise, the concerns expressed by the noble Lord, Lord Foster, will resonate even more profoundly. There has to be a way of securing a balance in all these aspects, and at the moment there does not seem to be, within the Bill, an adequate provision to achieve that purpose.
I hope that the Minister will respond constructively rather than—if I may say so, with all due respect—complacently. I do not mean she would be complacent in her own right, as it were, but that it would reflect complacency in the Government about the impact of what they are providing here, unintended though it may be.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord Foster, and the noble Baroness, Lady Bakewell, for the amendments and the noble Lord, Lord Beecham, for speaking to them. I need to be clear right from the outset that there is nothing in Clauses 3 and 4 that prevents the use of Section 106 with starter home developments, and local authorities will still be able to seek on-site Section 106 infrastructure contributions. Section 106 agreements are crucial for securing the supporting infrastructure. Indeed, our starter home requirement will be secured on sites using Section 106 agreements. We are working with the sector on draft model Section 106 clauses to help local authorities and applicants with the process. As such, we expect authorities to continue to have regard to the need to secure Section 106 agreements on starter home developments, as they would do on any other development.
The noble Lord, Lord Foster, asked about the new burden assessment. I can assure the House that the new burdens on local authorities arising from starter home duties, such as that of providing monitoring information, will be considered in the usual way that new burdens are.
Planning decisions for all developments, including those that contain starter homes, will still need to be made in accordance with local planning policy, subject to the starter homes requirement and other material considerations. Infrastructure considerations will clearly need to be issued.
Yes, we are going to reaffirm in national planning policy that affordable housing contributions should not be sought for starter homes and that we need to exempt starter homes from community infrastructure levy contributions. I make it absolutely clear that this will align with existing practice on affordable housing and that local authorities will continue to be able to seek site-specific infrastructure improvements, if they are necessary to make the development acceptable in planning terms. They will also continue to be able to seek additional on-site affordable housing, including housing for social rent and shared ownership, where it is viable to do so.
I have listened carefully to the debate and hope that the reassurance that local authorities will continue to be able to use Section 106 agreements to secure infrastructure on sites means there is no need to divide your Lordships’ House and that the amendment will be withdrawn.
Lord Foster of Bath
My Lords, I am grateful to the noble Lord, Lord Beecham, for his support for the amendment. I entirely agree with him about the importance of developing mixed, sustainable communities and of ensuring that there are a range of different tenures within them. I also say to him that I have never, so far in my time in the House, found the Minister complacent. I thank her for the very generous way in which she has given of her time to talk to many noble Lords and know she has listened to many of the concerns that have been expressed by Members of your Lordships’ House.
However, I am not entirely convinced by the arguments that she has made this evening. We are in difficulty because we know that, as with so many things, the Government are still consulting. We do not know what the outcome will be in relation to the percentage of starter homes that will be imposed on particular sites and we have not seen the model Section 106 agreements that the Government are currently developing. This puts us in a very difficult place but there will be further opportunities for discussion and to come back to these issues so, at this stage, I beg leave to withdraw.