Lord Campbell-Savours
Main Page: Lord Campbell-Savours (Labour - Life peer)Housing and Planning Bill
Lord Campbell-Savours Excerpts
Lord Beecham (Lab)
My Lords, I shall also speak to Amendments 39, 39A and 40 in this group.
“There is no specific shortage of social housing, or private rented accommodation, or homes for first-time buyers, but an overall shortage of inexpensive housing across all tenures. Government solutions … are all a step in the wrong direction … Boosting homeownership should not be a policy aim in its own right. The government’s aim should be to improve affordability in general”.
These are not my words. They are contained in a briefing which I have just downloaded from my computer from that unregenerate Marxist body, the Institute of Economic Affairs—which tells us something about the peculiarity of the Government’s position.
Amendment 38 addresses the critical issue of affordability. In an earlier debate, I declared that affordability is an elastic concept, and we debated at some length the implications of that condition on Tuesday. Rather than beginning with a figure reflecting current house price averages—unaffordable to a large proportion of the population and varying widely not just between London and the rest of the country but within London and, as we have heard already in some areas, within other parts of the country—the approach comes to the issue from the other end. The criterion for affordability should be the income levels of the potential beneficiaries of the scheme. I am afraid I will cite figures again from my own authority: in Newcastle, the average two-bed property is marketed for £135,000 and the average three-bed for £160,000—those are existing stock. The discounted prices under the starter homes scheme would therefore be £108,000 and £128,000. As we have heard in relation to other figures which have been quoted, new-build properties would presumably cost more than current average prices. In any event, either would be out of reach for the majority of applicants on the city’s housing register and for a sizeable proportion of other people seeking to purchase a property. In the existing areas of what we call lower-quartile properties—flats or terraced houses—the average asking price is around £78,000, or £92,500 for slightly bigger homes.
The scheme we are debating today has little to offer in places such as Newcastle. By contrast, in areas of higher value in the city and elsewhere, its potential would be limited to those with higher incomes, who will in addition benefit of course from the ability to cash in eventually not only on the 20% discount but, as my noble friend Lord Campbell-Savours pointed out in some detail this morning, on any rise in house prices. At the top end, there is clearly the potential for very large windfall gains to arise from the scheme, amounting to well in excess, in some areas, of £100,000—ironically, enough to allow the lucky first-time buyer in London to invest in a buy-to-let property in Newcastle of the kind I have described.
It cannot be fair to facilitate, after only five years, such significant untaxed gains for buyers whose incomes are likely to be substantially higher than those of people buying cheaper properties.
Lord Campbell-Savours (Lab)
Once again I express the need for us to see, at a very early stage today, this document that sets out the Government’s estimate of regional demand, based on the number of people who have applied. We need to see those figures and where they are coming from. If they are available in the Chamber now, why can they not be circulated during this debate?
Lord Beecham
I cannot answer that question, of course. I am not sure the Minister will be able to either, but she will have a little more time—probably quite a lot of time—to perhaps get some information from the Box.
My Amendment 38 indicates that the starter home should be sold at a price not higher than that which would be affordable to a household on the local median income rather than creating an artificial discount irrespective of the means of the buyers. That seems a more sensible approach. Amendment 39 looks at the position in a slightly different way, and deals with the length of time in which the 20% discount applies. The Bill provides for a five-year period, after which the property can be sold and any gain accrues to the original purchaser. Amendment 39 would retain the 20% discounted price in perpetuity, so that the property would always be sold at 20% less than what by that time would be the market price. The benefit of the 20% discount would therefore go to successive purchasers of the property, which would remain at a discounted price, rather than it effectively disappearing into the pockets of the first lucky first-time buyer.
Amendment 39A would extend the categories of properties which might be purchased, by including properties bought under a rent-to-buy agreement as well as those purchased directly. This seeks to cater to buyers who might find it difficult to obtain or service a mortgage by allowing them to participate in the rent-to-buy scheme; it could be extended to shared-equity purchases. The Minister might look into these possibilities before we return to these issues on Report. The thrust of the amendment is that prime consideration needs to be given, in terms of affordability, to the means of the buyer and not simply to the price of the house. That is cardinal to achieving greater access to genuinely affordable houses on the private housing market. Accordingly, I beg to move.
Lord Campbell-Savours
That is an area that confuses me. When we talk about repayment, who is actually being repaid? I cannot work it out.
Lord Best
The Bill and my amendment leave open whether repayment would be to the local authority where the home has been built—which I would support—or to the Homes and Communities Agency, to be used for housing elsewhere.
By making the offer a little less generous—by making the cream a little less rich—the excessive stimulus and distortion of this market is reduced, I hope, and the cost to the nation in losing out on affordable rented homes is made a little easier to bear.
Lord Shipley (LD)
My Lords, I am a signatory to Amendment 46. I want to refer to the report from Generation Rent, which was published earlier this week and found that public subsidies proposed by the Government will help comparatively few people. That is because very few people in the private rented sector will be able to benefit from the scheme, and the 200,000 people who stand to benefit could receive a huge dividend if they sell up after the five-year discount period expires, with the potential for six-figure profits individually. We have heard a great deal about this but these are very large sums of money.
The consequence is that the scheme will increase inequalities between those who own property and those who do not, and there will be a lack of any sense of fairness between those who can afford a subsidised starter home and those who cannot, driving social inequalities wider and deeper. I wonder whether that is really what the Government want to achieve.
I should like to ask the Minister whether the Government are committed to the statement in the Conservative election manifesto that starter homes will be exclusively for first-time buyers. The point is that when the homes are sold on after five years or later, there is no guarantee from the Government that they will be bought by first-time buyers. So these are starter homes for first-time buyers but theoretically only for five years; after that, the benefit that had accrued from defining them as homes for first-time buyers will be lost.
I am still puzzled by the Minister’s statement before the lunch break to the effect that it may well be possible that starter homes will be sold as second homes. I keep thinking about those parts of the country that are short of housing and where starter homes may be important in providing additional opportunities for people. The prospect that they may be sold and lost to the next generation who could take up starter homes I find particularly disturbing.
We need clarity from the Minister. If housing affordability fails to improve, future first-time buyers will find it very difficult to get on to the housing ladder, so having a discount which carried on in perpetuity would help the Government to keep their promise.
Lord Campbell-Savours
I am sorry to intervene but I cannot understand how this would work. I am not trying to be critical in any way; I only want to know how it would work. Can the noble Lord give us an example of a property purchased at a discount under this scheme? What would happen at its first sale? How would the price be determined? What would be the position of the estate agent selling the property? Would a valuer be involved? I am trying to understand the mechanism here. If it worked then it would be reasonable to consider it but, like the noble Lord, Lord Horam, I cannot see any mechanism that would make it work. Can he please explain?
Lord Shipley
I agree with the noble Lord. I am as concerned as he is about these matters. Of course, I had assumed that there would be a role for the valuation system. There may be a role for local authorities, or there may be a role for both. That system exists in relation to council tax valuation, for example, but it seems to me that to prevent market abuse—the noble Lord, absolutely rightly, discussed that before the lunch break—we have to be clear about this, otherwise there could be a problem with how properties are valued. For that reason, in my view there has to be an independent valuer.
This would operate in exactly the same way if there were a taper, going down 1% a year over 20 years, or if the 20% discount applied in perpetuity, but there are ways in which that can be done by using local government and the valuation system. I do not wish to say much more. In this group—
Lord Campbell-Savours
I shall very briefly intervene on this occasion just to say that I only wish that Amendment 89L in my name, a very controversial amendment that comes much later in our proceedings, could have been taken at this stage. It would have provided a very different approach to dealing with this matter. But of course we will not come to my amendment for another three weeks, I understand; it is at the very end, by which time everyone will have made their mind up.
I think that if we are to go down this route, Amendment 41A in the names of the noble Lords, Lord Best, Lord Kerslake, Lord Cameron and Lord Beecham, is the perfect solution. In my view, it deals with the problem of excess profit-taking; it provides for the discount system and, if you are acting honourably, you are not penalised in any way. That is the compromise that Ministers should seriously consider. I know that promises were made in the manifesto, but that amendment does not compromise the commitments that were given. It still provides for the 20% discount system which the British people were promised was on offer. I hope that the amendment is very seriously considered.
The Earl of Lytton (CB)
My Lords, I have sat on my hands for a considerable while since we started in Committee this morning. I speak to an intriguing amendment, Amendment 41A. Before doing that, I will try to peel back some of the skins of the increasingly complex onion that we appear to be dealing with.
The first thing to realise is that the housing market is potentially a very volatile animal, and has an enormous number of different subset markets—as we have heard, different parts of the country operate in very different situations. I know that your Lordships’ Select Committee on National Policy for the Built Environment heard evidence that, in certain parts of the country—not the north-east or the north-west— the market simply has not returned to anywhere near pre-peak levels of value. However, I leave that to one side.
Earlier, the Minister cited a gap in the market. I question which market we are referring to. Apart from believing that the gap is vanishingly small—we have heard some reasons why other products would effectively fill it anyway; and apart from the means being adopted to plug it in the Bill being vanishingly transient; and, furthermore that the limited category of people whom this type of starter home would actually benefit is, to my way of thinking, irrelevantly small in the overall scale of things, I have to wonder where we are trying to get to.
We need to be clear about whether society will provide lasting sectoral benefit to that proportion of the population that any social society is bound to try to assist. In that, I include people who may have been property owners at some stage, have fallen on hard times and, for whatever reason, have to depend on the state. When you are dealing with free markets, that sort of thing happens. There will always be a proportion of people—I do not pass judgment on how significant or insignificant—who cannot afford to buy and almost certainly cannot afford to pay a market rent. Are we going to assist those people, or to provide an increasing focus on a windfall gain for the few, without reference to the needs or actual means of the few who will benefit? I question what we are doing here.
In introducing Amendment 41A, the noble Lord, Lord Best, identified that the discount and loan assistance taken together is a huge transfer of asset. It is much bigger than the headline 20% figure that we are led to believe applies under starter homes. As the noble Lord, Lord Young, observed on Tuesday, developers are keen on this. Yes, indeed— they would be. Who would not be as an alternative to the affordable housing regime under Section 106, with the uncertain outcomes and unpredictability that that involves? I am not in the least surprised about that. Purchasers of starter homes would also be keen. Who would not be, offered a windfall gain for the asking? I wonder whether we should be devoting quite so much time and effort to this ephemeral social benefit.
When dealing with the question of housing and the impecunious, I am reminded of a gentleman who once said to me, in connection with council house sales, “If I had that sort of cash, I would put it to a better use than buying this place”. I hope that we do not build the sort of place that he was referring to, but I wonder whether, in circumstances of strapped resources in the public domain, we should be funding the ephemeral and assisting those who have access to a deposit that enables them to gain this discount in the first place. There is certainly no gain to the social budget on the sale of a starter home. The mortgage gets paid off, presumably, and the balance of it goes off down the road with someone to their next home. Or, if they have succeeded in being parted from their money, it goes to someone else—some financier who may have come in on the back of this scheme. It was mentioned earlier today that there is absolutely no end to the ingenuity of financiers of all sorts, regular and irregular, who would jump on this bandwagon and might usefully talk people round into doing business with them on the basis that they would share in some of the largesse being provided by society at large.
I believe that doing more here includes retaining a significant element of social benefit of some sort, and it is a matter for debate how much that should be, for society at large—unless of course you believe that the market will do everything, which of course it will not and cannot. History shows us that it does not.
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.
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.
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.
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.
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.
Lord Campbell-Savours
I ask the Minister to imagine a sale where a house is being sold on the second occasion. After the valuer has said, “This is the value of the property and that is the discount, so you have to sell it at this price”, a person buying finds that he is one of eight people who all want that property. Is there not a danger that one of them will come along and say, “I’ll give you an extra £3,000 but don’t tell anyone about it”? Are those not the conditions that are going to exist in reality? Estate agents will be party to it, too. They will say, “Yes, that’s the price, but I understand that Joe Bloggs is prepared to pay you a few extra bob round the back to make sure that he gets the deal as against the other seven in the queue”.
Lord Campbell-Savours
I want to intervene very briefly. In the old days—certainly when the noble Lord, Lord Deben, was a Minister in the Department of the Environment, if I remember rightly—in the Lake District we had what were called Section 52 agreements, whereby the planning authority placed a requirement on planning permission that people had to live within either a parish or some other defined area. In so far as Amendment 50A deals with,
“affordable homes to meet local needs, including those for rent”,
surely locals-only agreements could apply in the case of starter homes in small rural communities. Rather than planning authorities simply saying, “We will not have them. We will exclude them in particular areas”, could they not exist within those areas but subject to locals-only agreements?
Lord Deben
They certainly could; the noble Lord is absolutely right. But they would have to exist in a way which meant that they were not lost when the next tenant comes forward. You would have to have them in perpetuity as well. As long as that is the case, I do not mind two hoots.
Lord Campbell-Savours
If I remember rightly, under Section 52 agreements, that was precisely the case: the permission attached to the property was carried forward to subsequent buyers. In this mix of debate whereby it is being suggested that we should be more careful about their inclusion in these rural communities, if you have that kind of restriction in place, I cannot see that there is such a great problem.
Lord Stoneham of Droxford (LD)
My Lords, I remind the Committee of my interests as chair of Housing & Care 21. The noble Lord, Lord Cameron, has moved this amendment very fully. I will just mention a local example that illustrates the issue to which the Minister has to respond.
It is a village near where I live in Hampshire on the edge of the South Downs National Park called Wickham—the birthplace of William of Wykeham, the famous Lord Chancellor in the reign of Edward III. It is a nice rural village. A friend of mine who is a local landowner and farmer decided, in the interests of the village, to donate some land as an exception site for approximately 11 properties and a doctors’ surgery on the edge of the village. That was done, and the houses were divided between a housing association and a community land trust. When he heard about the right to buy, he was incandescent, because he had given this land in good faith. Despite remaining a substantial landowner in the area, he vowed that it would be the last piece of land he would give up for an exception site.
This is the issue that needs addressing, and that is why I support the amendment. We will come on to other aspects of this particular site when we get to the amendments on community land trusts, but I raise this as an example of why the issue needs to be addressed. That is what the Minister needs to respond to and why it is so important.
Baroness Hollis of Heigham
My Lords, I also support these amendments. As a child and as a teenager, I was brought up in a village in south Devon of what we used to call “150 souls”. For some time in the 1970s and 1980s I was a parliamentary candidate in a constituency with a large number of rural villages. As we went round from village to village, there were half a dozen council houses here and half a dozen there—hopefully and usually, but not always, having Labour stickers in their windows. Every one of them has gone. What is left are housing association villages. Obviously housing associations are on a voluntary basis but, as the noble Baroness will know, we are going to have a somewhat similar debate over the problems of rural exception sites with right to buy. There will then be the question of whether there is a portable discount, as opposed to the sale of those particular houses, because government recognises that stripping out affordable rented housing from villages or ensuring that new housing is not of that sort will kill those villages.
It is worth reminding ourselves of how poor, how low and how modest some incomes are in such areas. In much of the parts of rural Norfolk that are not occupied by retirees from Essex, by second home owners from Islington or by reasonably new purchasers on the outskirts of Norwich, incomes are exceedingly low. As the noble Lord, Lord Deben, said, many of the people connected to the agricultural and food processing industries, some manual public sector and building and construction workers—and they are mostly men here—will be lucky if they are taking home £20,000 a year before tax. What about their wives and partners? I was checking when we were doing amendments on previous Bills and found that women in those situations, because they did not have a car, were dependent on their locality and were lucky to piece together an income of £5,000 a year. From what? They cleaned caravans, boats and houses. They picked mushrooms and, occasionally, in summer, they might pick fruit. They amplified that with bar work in the local pub on a weekend. If they could take home £5,000 or £6,000 in total in the course of the year, they regarded themselves as fortunate.
Such people will never buy. What they would like to do is to enjoy an attractive home in which they can keep their roots; where the children can go to the local schools and all of the community virtues, values and emphases that the noble Lord, Lord Cameron and the noble Lord, Deben, have expressed so well are continued. The Government seem to have a conflict of issues here. I am sure that they respect and support the need for communities—particularly viable communities—in more rural areas. The Government also support the philanthropy of landowners, as we all do. At the same time, the Government are also calling for social mobility—for people who actually want to stay, put down roots and make their community thrive. This is inconsistent with the philosophy of starter homes, where you keep your discounts, sell on and make those houses unaffordable to the local community, but you are none the less allowed to buy your next home up the ladder.
I think the Government have to accept that small rural communities are different from the cities, where you have a choice of housing, a choice of occupation and can, to some extent, construct your income. If the Minister does not understand—which I am sure she does—the physical and social immobility and, to some extent, the mental immobility by virtue of family connection, then those villages will die. Certainly, in Norfolk, they are already dying. If all new developments are increasingly monopolised by starter homes and we find, as a result, landowners drying up their donations, particularly to housing associations, then this Government will have the honour of seeing the death of so many of our villages.
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 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.