Housing and Planning Bill

Lord Lansley Excerpts

Monday 11th April 2016 Lords Chamber

[Lord Lansley (Con)]

My Lords, I wanted to say a few words, including in relation to Amendment 4 in my name, which is in this group but does not relate to the age restrictions or requirements. I share with my noble friend Lord True an appreciation that our noble friend the Minister listened exhaustively and exhaustingly throughout Committee, and has taken the trouble to bring back amendments that are the basis of that reflection on some of the issues raised—and rightly so.

Amendment 4 relates to the definition of a starter home. I have always started with the plain English definition that a starter home is a new dwelling built expressly for the purpose of being available to first-time buyers. That, of course, is what the Bill says, but it puts a number of additional caveats on that definition, expressed in Clause 2, including the specific age requirements that the group relates to. But the Bill also, under the purchase provision in subsection (5), makes it clear that this will happen through purchase. What does “purchase” mean for the purposes of the Bill? Does it include or exclude when somebody buys with a mortgage? I think that clearly, by definition, we must assume that it includes buying with a mortgage and that it does not just mean buying outright. But what about if somebody buys through a shared equity arrangement, or staircases to purchase through a rent-to-buy arrangement? My understanding from the prior discussions on the Bill is that they are not included, but my submission in the amendment is that they should be. From the standpoint of first-time buyers, those are routes to home ownership, which is what we are looking to promote.

One figure that we have not referred to yet on Report but which has been instrumental to our debate is that 86% of young people looking to go into the property market want to own their own home. Of that 86%, a significant proportion currently cannot do so. The manifesto commitment is absolutely right and admirable, and appeals to them for that reason, but there will be a proportion for whom, even at the discount to the market value, as Savills’ work for the Local Government Association demonstrated, finding the deposit—because we know that deposits have at least doubled in the past decade or so—will be very difficult in some parts of the country. So maximising the mechanisms by which young people can buy a starter home, including other mechanisms for buying a starter home, seems a reasonable approach.

There is a good argument against this proposal, which is—very straightforwardly—that the starter home is a distinct product and separate and different from shared ownership or indeed rent to buy, and if we were to conflate these things we would make it much less clear what the starter home requirement relates to. But the Government should look at the technical consultation; the calculations on the back show the Government’s estimate of the proportion of affordable homes that would be available for the starter home requirement at the average subsidy through developer contributions on sites in excess of 10 units. The answer was that 22% as a starter home requirement could be delivered on the average as already assessed on the viability of those sites. The Government are now consulting on a 20% starter home requirement, with the implication that the overwhelming majority of that affordable housing contribution will be consumed by the starter home requirement. It therefore seems that the starter home requirement should include more of those affordable housing requirements and mechanisms. Otherwise, a significant proportion of young people might be left out of the opportunity, through affordable housing contributions, to own their own homes. If you were to take the 20% requirement down to, say, 15%, which is one of the options discussed in the technical consultation, the net result is that at 200,000 homes a year over five years, you do not get 200,000 starter homes. It is only at 20% that you get 200,000 starter homes over five years so, in that sense, we are between a rock and a hard place. One of the mechanisms for dealing with that—and I continue to commend it to the Minister in her further thoughtful approach to the Bill—is to think about whether the definition of starter homes is unnecessarily narrow. A slightly wider definition, to embrace some of the other products that enable young people to buy their own home, would allow us to meet the starter home requirement more readily and ensure that a larger proportion of young people are able to access a home of their own through these proposals.