Housing: New-build Homes

Lord Forsyth of Drumlean Excerpts

Thursday 31st October 2013 Lords Chamber

[Baroness Stowell of Beeston]

As we made clear yesterday, and as was always the case, we are already reviewing the new homes bonus scheme; that report will be published next Easter. The most important thing to say to the noble Lord is that we are disappointed in the NAO’s report because it seems to miss the point of the new homes bonus. It is there to do what is says on the tin: to reward councils that help to build more new houses. That is what we are trying to do. We want to make sure that those local areas that build more houses attract and receive the benefit of doing so in their area.

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend make sure that for those taking part in Help to Buy, particularly young people, strict criteria are applied on the affordability of the mortgages? When interest rates go up to their normal level, there is a chance not only that the value of properties will fall but that payments will rise spectacularly. Is she sure that the scheme is being run in a way that will not force youngsters into negative equity, with mortgages that they cannot pay?

[Baroness Stowell of Beeston]

I am very sure, as the arrangements in place are very rigorous. As my noble friend will be aware, the Bank of England will monitor the scheme and, importantly, the criteria used to judge whether somebody can afford their mortgage will be as robust as they need to be. This is an opportunity presented to people who do not have access to the bank of their parents or family and who, if they could have more help putting down a deposit, would be able to own their own homes. That is a good thing.