Shared Ownership Housing

Hannah Bardell Excerpts

Tuesday 14th July 2015 Westminster Hall

[Hannah Bardell (Livingston) (SNP)]

It is a pleasure to speak under your chairpersonship, Mr Evans. I thank the hon. Member for Milton Keynes South (Iain Stewart) for securing this debate, which has been interesting and informative and has heartened me in the wake of a Conservative Budget that has much in it that worries and saddens me. There seems to be consensus around the Chamber on shared ownership. As Members will be aware, housing is a devolved matter for Scotland, and that has allowed the Scottish Government to create a different story from that in the rest of the UK.

I will draw briefly on some of the interesting points that have been raised. The point on students being hindered by student debt is important. We heard in the Budget that student grants will be ended, so we need to look at the gulf that will develop between those on much higher incomes who have owned homes for a long time and the next generation of homeowners, many of whom are being locked out because of the disparity in house prices and other challenges.

Let me give some information about how we have dealt with the issue in Scotland. The latest figures show that the total of new build completions was up 4% to the end of 2014, and that was driven by a 16% increase for private-led sites. We had 15,541 homes completed in 2014, which was 657 more than in 2013. Total new build starts were up 15% in the past year. The Scottish Government outperform other parts of the UK. In Scotland, we have 63 new build social sector completions per 100,000 of population, compared with 46 in England and 25 in Wales. In the year ending December 2014, the rate per 100,000 of population for private sector completions was higher in Scotland, at 228, compared with 173 in England and 175 in Wales. In the latest year, an additional 30,000 or so private sector homes would have had to be built in England to match the Scottish completion rate. We have put that very much at the heart of what we want to do to provide affordable housing throughout Scotland.

A point was made about rural areas, which are particularly challenging. In some areas, people come from elsewhere in the country to what are considered beautiful parts of Scotland, such as Arisaig, where I have spent a number of summers over many years. I know stories of local people who have either returned to live in the area or tried to get out of social housing and into private housing but cannot because they are priced out by people coming from other parts of the UK and the world.

On shared ownership in Scotland, the SNP and Scottish Government have shown their commitment to supporting home ownership in a balanced, sustainable way by helping people on low and moderate incomes to become homeowners, if it is affordable for them. The low-cost initiative for first-time buyers—LIFT—programme brings together several ways of helping households to access home ownership. The new supply shared equity scheme allows first-time buyers to buy new build properties from housing associations, and the Scottish Government give grants to registered social landlords—normally a housing association or housing co-operative—to help them to build or buy new homes for sale.

In March this year, the SNP Government announced £70 million of funding for the open market shared equity scheme, allowing first-time buyers to buy properties on the open market. Priority access will be given to social renters, disabled people, members of the armed forces, veterans who have left the armed forces in the past two years, and widows, widowers and other partners of service personnel for up to two years after their partner was killed while serving in the armed forces. There is a marked difference in Scotland from the UK Government’s approach to housing. We are looking at investment, not austerity. Nevertheless, the £107 million cut from Scotland’s budget, on top of an overall 9% budget cut since 2010 and a 25% cut to the capital budget, is unacceptable and prevents the investment in housing projects that create jobs, forcing austerity on Scotland.

We have shown in Scotland that investment in affordable housing can keep costs down, create jobs and, importantly, help to give people better lives. Commenting on the Budget measure that will remove automatic housing benefit for those aged 18 to 21, Shelter Scotland called it “shameful…unjustified and cruel”. If we are going to invest in the next generation of homeowners and people, we have to have good housing and good education, and the best start in life is imperative. This Budget is not going to do that.

--- Later in debate ---

[The Minister for Housing and Planning (Brandon Lewis)]

It is a pleasure to serve under your chairmanship, Mr Evans, for, I think, the first time. I congratulate the hon. Member for Milton Keynes South (Iain Stewart) on securing this debate on shared ownership. Towards the end of his speech, he rightly made the point that Parliament is a place for debating these ideas and putting them out there; he has taken great advantage of the opportunity to do so and given a good example of how our debates play through.

It is just over two months since the general election, and we are well on the way to planting the roots that will enable us to meet our manifesto commitment to helping people to meet their aspirations to own their own home. Shared ownership is an important part of that. Let us remember that when the Conservative-led coalition first came to power in 2010, we inherited a situation in which the banks were not lending, the builders were not building and people were denied the opportunity of home ownership. We had a long way to go from what Labour left us with: the lowest level of house building since the 1920s. There was also a top-down planning system, the regional spatial strategies, which produced not houses but that lowest rate of building.

We are now working to ensure that we can meet people’s aspirations to own their own homes by building on improvements in house building and support. Since 2010, more than 260,000 affordable homes have been delivered in England, including 41,000 for shared ownership. Our affordable homes programme has exceeded expectations by delivering nearly 186,000 affordable homes since April 2011—more than originally planned. In the first quarter of this year, house building completions were up by 21% on the same quarter last year. We will deliver 275,000 affordable homes over this Parliament to achieve the fastest build rate in some 20 years.

I turn now specifically to shared ownership. As hon. Members have rightly outlined, full home ownership can be a challenge for first-time buyers. Shared ownership offers a route through that via the part-buy, part-rent model. Purchasers buy a minimum 25% share in a new build property at market value, generally provided by a housing association, and pay a controlled rent on the remainder. Further shares may be bought until the property is owned outright. Shared ownership has proven over recent decades to be popular and it is clearly effective. Households that are otherwise priced out of the housing market get a chance to get a foot on the property ladder at a lower initial cost. For many people, shared ownership is a stepping stone to full home ownership, which is why it is such an integral part of the affordable homes programme. Some 41,000 shared ownership homes have been delivered since 2010.

We need to look for more ways to help identify and lift the other barriers to extending shared ownership. Following the autumn statement, the Government took a number of steps. We consulted on a range of proposals to streamline the process for selling on shared ownership properties and to increase mobility. We also held discussions with housing associations and lenders. The Homes and Communities Agency now has amended guidance and model leases to remove the pre-emption right for shared ownership properties that have staircased to outright ownership, making it easier for those who have met their aspiration for full home ownership through shared ownership to move on. I am happy to take up the challenge of my hon. Friend the Member for Peterborough (Mr Jackson) to ensure that the Government and the HCA look at the guidance to see what more can be done. We can always try to be better.

[Hannah Bardell]

Will the Minister give way?

[Brandon Lewis]

I will not because of the time.

The change came in to effect across England at the end of April and the Greater London Authority confirmed that it would mirror the changes in May.

I thank my hon. Friend the Member for Milton Keynes South for his ideas, and I am keen to finish in time to allow him to say a few more words. Some of the issues that he raised were mentioned in discussions earlier this year with providers and in the good work done by a range of people looking at extending shared ownership. His speech today included some interesting and new, but challenging, ideas that we will take away and consider. I hope that he will accept my invitation to come and talk to us in the Department for Communities and Local Government. We remain committed to considering suggestions that can enhance the contribution that shared ownership can make to extending home ownership.

My hon. Friend the Member for South Suffolk (James Cartlidge) rightly outlined the benefits of shared ownership. I have seen it for myself on tours around the country, during which I have seen shared ownership properties, not least here in London, with the great examples at the Olympic park that show how it allows people to get into home ownership in a place where they want to be. We have a complicated housing market, and it is absolutely right that the Government ensure that there is a framework that offers a menu of options, so that someone on the demand side looking to get into a home of their own can look across the menu to find the product that is right for them. It could be shared ownership, Help to Buy, right to buy, starter homes or one of the other products out there.

My hon. Friend the Member for Peterborough is right that we must remember that there is a market outside London. We might talk of a housing bubble, but some people around the country will be living in negative equity and will wonder what we are talking about. We must be conscious of that, and my hon. Friend was correct to mention right to buy.

My hon. Friend the Member for Milton Keynes South noted that it is right to do all that we can to support those who want to own a home of their own. We believe in helping people’s aspirations, which is why we will offer more than a million housing association tenants the option to buy their home in the same way that generations of local authority tenants have. Until now, those housing association tenants have received little or no assistance. That is unfair. Aspiration should not be determined or limited by the organisation that manages someone’s home, especially if it was ultimately funded by the taxpayer. That is why we will ensure that housing association tenants have the same rights to buy a home. Housing associations can play a key part in that, and I hope to see them build on the fantastic work that others have already done to develop the shared ownership model further and to help their tenants staircase to home ownership.

The Government are also committed to building 200,000 starter homes during this Parliament to be offered to young first-time buyers at a 20% discount on their open market value. The productivity plan published last Friday announced that we will introduce an ambitious package of planning reforms and proposals to help deliver starter homes and to show commitment through national planning policy changes, and with the housing Bill later this year, we will deliver the homes that we want to see built across our country.

Hon. Members were right to refer to large and small developers. Many large developers started off as small developers, but I would argue that the planning restrictions and the regional spatial strategies and regulations that were brought in under the previous Labour Government actually made it more difficult for small builders to become the larger builders of tomorrow. I suspect that even the larger builders would admit that they would like to see more competition coming through. That is why we want to create a simplified, faster and more efficient planning system that still reflects the loud voice of local people having their say. It is absolutely right that more small and medium-sized businesses come in and that we create an environment where they might be attracted to the shared equity or ownership model. My hon. Friend the Member for Milton Keynes South made an interesting proposal that could lead us that way and we can consider it.

I am proud to have been a part of the previous Government, the Conservative-led coalition, because we were the first since the 1980s to end a term with a larger stock of affordable housing, and we are committed to go much further. We will deliver an additional 275,000 affordable homes by 2020, with billions of pounds of public and private investment. We will support the housing association tenant who aspires to buy their home, which was not possible before. We want to support and help the young family who sign up for a starter home—tens of thousands of people have already expressed an interest—and the couple who have always dreamed of owning their own home. Help to Buy can make the difference in their ability to move up the ladder. We will support their aspirations. We will build more homes in every part of the country, while ensuring that we build the homes that we need for the people who need them in the places where they are needed. Importantly, they must also be of the quality that we all want to see. Shared ownership has a hugely important part to play in that. I support my hon. Friend the Member for Milton Keynes South in his desire to make that point loud and clear.