Home-ownership Rates

Lord Brooke of Alverthorpe Excerpts

Wednesday 6th December 2023 Lords Chamber

[Baroness Penn (Con)]

My Lords, the noble Baroness is right that shared ownership represents an important part of our affordable homes programme and is an important part of helping first-time buyers, particularly younger first-time buyers, on to the housing ladder. We conduct extensive evaluations of our affordable homes programme and will always seek to learn what we can do to improve those schemes, including the users’ experience of them and whether their complexity creates problems further down the line. We will always look at improving where we can.

[Lord Brooke of Alverthorpe (Lab)]

My Lords—

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[Baroness Penn (Con)]

My noble friend is absolutely right that planning is key. Many measures in the Levelling-up and Regeneration Act are targeted at supporting the planning system. We also had announcements at the Autumn Statement about improving the efficiency of the planning system and putting more resources into it. My noble friend is also right about small and medium- sized builders; part of the key to supporting them is ensuring that, when we have more difficult market conditions, we continue that supply chain and increase supplies. For example, the affordable homes programme can provide an important role in making sure that builders do not go out of business in tougher conditions.

[Lord Brooke of Alverthorpe (Lab)]

My Lords—

[Lord Best (CB)]

My Lords, in the longer term it would clearly make homes more affordable for first-time buyers if there were enough homes to go round and current acute shortages were eased. In the short term, does the noble Baroness agree that it is ridiculous that so many young people pay more in rent to private landlords than they would pay for a mortgage to secure a home of their own if only they could persuade the banks and building societies to lend more sensibly? If she agrees, will the Government look at extending the new and useful mortgage guarantee scheme to reassure lenders and at the DWP’s support for mortgage interest scheme, which needs to be a benefit and not a loan, to pick up those rare cases where there are serious arrears?

[Baroness Penn (Con)]

My Lords, I have good news for the noble Lord on the first point. The mortgage guarantee scheme has been extended to June 2025 to allow more 95% mortgages to be available to first-time buyers. We have also made changes on support for mortgage interest. Since April, we have allowed those on universal credit to apply for a support for mortgage interest loan after three months rather than nine. However, it is right that it remains a loan rather than a grant in these circumstances.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, may I finally get in with a question? The noble Lord, Lord Naseby, mentioned the benefit of complete full relief on all mortgage interest that many of us had when we were purchasing. Why cannot young people have that?

[Baroness Penn (Con)]

My Lords, we consider all different routes to supporting young people into the housing market. One drawback may be that support is less targeted at those who face the greatest affordability challenges when getting into the housing market. We have sought to refine in our programmes over the years where we can get the biggest impact for the investment that we are making on behalf of the taxpayer.