Lord True
Main Page: Lord True (Conservative - Life peer)
Baroness Williams of Trafford
My Lords, I apologise for the delay—first day back and all that—but I will now move the amendments. Amendments 2 and 3 require qualifying first-time buyers to be a minimum age of 23 to be able to purchase a starter home.
As I made clear in Committee, the Government want to strongly discourage starter homes from being considered as commercial investment opportunities rather than homes to live in. Many noble Lords expressed concerns about the eligibility criteria for those able to purchase a starter home, including the possibility of such homes being used as an investment vehicle. One area of risk has been identified as parents buying starter homes in the name of young children, or even their young adult children who are not yet in a position to buy because they are not in stable employment but in higher education.
I listened carefully to the debate in Committee, and, as a result, we have tabled the amendment to introduce a minimum-age criterion that would limit the ability to purchase a starter home to those who are aged 23 or over. This would prevent individuals purchasing a starter home in the name of a child or perhaps a student under the age of 23.
We have considered the age that adult children leave education or training to enter the job market so as to become realistic first-time buyers in their own right. We estimate that about four-fifths of higher education students turn 23 either during their final year or after graduation. This minimum age requirement strikes the right balance between providing real opportunities for hard-working young people and families to secure a home and discouraging starter homes from being used as an investment opportunity.
My department’s analysis of Council of Mortgage Lenders data suggests that, in 2015, only 4% of first-time buyers were under 23. I expect that this minimum age requirement would directly impact a relatively low proportion of potential buyers, but would restrict the scope to game the opportunity provided by starter homes. I therefore ask that this amendment be agreed to.
Lord True (Con)
My Lords, I was unable to attend the Committee sitting in question, but I read the report carefully and understand entirely where my noble friend is coming from. She said that it may affect only 4%. I congratulate her on responding to your Lordships in seeking to address the potential abuse that she rightly identifies, but there is always a risk of viewing legislation from a London position and in a world where so many people who write and think about legislation went to university. Many people do not go to university, and in some parts of the country property values are quite low. In that 4%, there will be aspirant young couples—plumbers or mechanics married to teachers—who have the same hope to make a start in life and who should not be excluded from the opportunity for the sake of closing a loophole.
I know how difficult this is, and I will certainly not oppose my noble friend’s amendment, but it will go back to the other place as a Lords amendment, so it will be subject to further consideration. I ask that we have a mind in this great House to that small 4% who may not have been to university, do not live in high-property-value areas but want to be first-time buyers and to benefit from the provision. I congratulate my noble friend on responding to the House, but I hope that, when the Bill goes to another place, my right honourable friend the Secretary of State will give further consideration to twiddling the amendment a little.
Lord True
Before my noble friend sits down, I apologise for not having reminded noble Lords of my interest as leader of a local authority, although the issue that I raised would not apply there. I was disappointed by my noble friend’s response and by the response from the Front Bench opposite. If the Labour Party does not recognise the potential situation of young people in craft or trade, who may be precisely the sort of people who are caught if we have an arbitrary age limit, that is disappointing. This issue may be dealt with in regulations, but regulations cannot solve the problem if there is not primary legislation at the cut-off stage. I ask only that there is some criterion where people under 23 have to show whether they are in full-time employment or have their own income as the basis for securing a loan. It ought to be possible to bring in that other 4% of aspirants and I hope that that will be considered.
Baroness Williams of Trafford
I would not like my noble friend to think that I did not agree with his point about aspirant young people. I totally agree with him. Without closing down the conversation, I pay tribute to what he said, and things may come forward to deal with that age group.
Lord Beecham
My Lords, the amendments in this group deal with the need to broaden the concept that the Government are promoting to ensure that a range of different needs are met, and in particular that affordable homes for rent should be included in the policy as it develops—literally—on the ground. That is the thrust of the amendments to which I and my noble friend Lord Kennedy have added our names, and to which those who tabled them have already spoken.
I can recall a time when the Labour Government’s requirement for regional housing strategies to be prepared was vigorously opposed by the Conservative Party on the grounds that it was an interference with the local decision-making powers of individual authorities. It was a view that overlooked the need to regard the provision of housing as more than just the concern of an individual authority because, of course, some were finding it impossible to make provision for their communities simply because of the dictates of geography. The classic case was that of Stevenage Borough Council, which was literally unable to build within its boundaries and was prevented by its neighbouring authorities from making any further provision for its residents.
Now we have a situation where the Government are apparently to determine what counts as a starter home and are taking, in the views that have quite correctly been put to your Lordships’ this afternoon, a much narrower view than is acceptable, in particular in relation to looking purely at the supply of starter homes for purchase when that cannot meet all the current needs and those that are likely to arise in many parts of the country.
I hope, therefore, that the noble Baroness will feel able to accept the thrust of the amendments. I do not know which of them will be put to the House; I suspect that it will be Amendment 8, tabled by the noble Lord, Lord Kerslake. Although it does not refer explicitly to the provision of affordable rented houses, it places the responsibility where it should lie, which is on the local authority. There is an implicit indication that local housing need will have to reflect the need for rented homes as well as owner-occupied properties.
This does not in any way vitiate the Government’s approach. It will not and does not seek to prevent the building of homes for sale in this context, but it recognises that more than one need must be met. I hope that the Government will look sympathetically at this proposal—and if the noble Lord chooses to test the opinion of the House, the Opposition will certainly support him.
Lord True
My Lords, I, too, should declare an interest as a member of the Leaders’ Committee of London Councils. I should make it clear that London Councils is sympathetic to the amendments in the group, although I do not speak on its behalf.
I hope very much that my noble friend, in summing up, will show the same understanding she had in Committee for the issues raised in the amendments. There is certainly a concern about the hierarchy of need and the difficulty in some areas of providing affordable housing, and the potential problems, particularly in high-income areas in my case, of starter homes squeezing out. I know that it is not the intention of my noble friend Lord Kerslake, or anybody else, but I do not want to see us getting to the point where we make it less likely that a government initiative, which was a manifesto initiative, and has been supported, will be implemented across the board. It is an extremely difficult balance to strike.
I am seeking something that is not necessarily on the face of the Bill but which shows a real display of understanding by the Government of some of the tensions and difficulties. I think that I heard in Committee—and I am sure that I will hear again today—about the difficulties of providing for the gamut of different types of housing needs in an area. That will certainly include affordable for rent, starter homes where we can do them, and other things of a different nature. So I would be nervous of putting something in the Bill that might inhibit or be used to inhibit—it could be the basis of legal challenge, or whatever—the delivery of starter homes, but I hope that my noble friend will show very much that she has heard and understands the spirit of the amendments.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord Shipley, and the noble Baroness, Lady Bakewell, for their amendment, which would require local planning authorities to promote the supply of other types of social and affordable housing in addition to starter homes. I thank, too, the noble Earl, Lord Listowel, for his amendment to require key-worker housing and temporary accommodation to be included. I also thank the noble Lord, Lord Beecham, and the noble Baroness, Lady Bakewell, for the amendment requiring local planning authorities to promote the supply of other home-ownership products and affordable homes to rent, as well as starter homes.
As I said in Committee, we want to address a specific gap in the market for young, first-time buyers. An additional product is therefore required to help a generation into home ownership. A recent report by NatCen Social Research found that home ownership continues to be one of the most important milestones in life for young people. For example, 77% of respondents said that longer term, they would prefer to own their own home. Just over two-thirds of respondents reported that owning their own home was essential to feeling that they had actually succeeded in life.
That is why we are legislating for starter homes to ensure that delivery will be supported across all areas. Support is available through our Help to Buy ISA to help purchasers to save for a deposit. Starter homes will offer an affordable step on to the property ladder, with lower costs and the benefit of immediate ownership, helping people to achieve the step up to their second property in due course.
Clause 3 expects councils to actively support starter homes as a new product in their housing mix. But it does not remove their ability to deliver other affordable housing and home-ownership products alongside starter homes, and we fully expect them to continue in this vein. Nor does it remove their local plan policy. Local authorities already have legal duties to house the most vulnerable in society and to consider housing needs in their areas.
We are helping people to access homes that they can afford in a number of different ways, and the Bill should not be seen in isolation. Our spending review commitments represent the largest affordable housebuilding programme by a Government since at least 1979. We believe that affordable shared ownership and other home-ownership products have an important role to play as part of the diverse and thriving housing market in helping those who aspire to home ownership but may otherwise be unable to afford it.
The spending review has committed £8 billion to deliver a further 400,000 new affordable housing starts, including the £1.6 billion to deliver 100,000 affordable homes for rent and £4.1 billion to deliver 135,000 shared-ownership homes. It builds on our strong track record of affordable housing delivery. We have delivered 277,000 affordable homes since 2010, including nearly 200,000 to rent. In the last year we have added more than 50,000 social and affordable rent homes, and twice as much council housing has been built since 2010 than in the previous 13 years.
We fully believe that local planning authorities know their area. We would expect them to seek other forms of affordable housing such as social rent where it would be viable, and we are currently consulting on the starter-homes requirement for the regulations to seek wider views so that we get this right. Local planning authorities have the option to release more land for housing of all tenures, as needed, in their local areas. They are very aware of their commitments to meet local housing needs and they will strive to meet these needs.
Amendment 7A, in the name of the noble Earl, Lord Listowel, specifically refers to families requiring temporary accommodation and to key workers. As I have already outlined, there are a range of tenures available that could help accommodate key workers. Councils can promote affordable housing schemes for key workers if they want to prioritise this. As I explained in Committee, they are also required to consider homelessness under the Homelessness Act 2002. But our aim with this legislation is to drive a focus on delivering starter homes—a new product that is much needed to address a growing problem among the under-40s. Our legislation focuses on this product to ensure that it has the necessary attention to secure delivery, but not to divert attention away from other products. We know that local authorities will continue to look to provide other forms of housing tenures. We do not need to promote these as part of this duty.
I now turn to Amendments 8 and 9, which I thank the noble Lord, Lord Kerslake, for. They would allow a local planning authority to have regard to the provision of starter homes, based on its own assessment of local housing need and viability. I have heard the arguments that planning for starter homes should be devolved to the local level. I will explain the Government’s proposals and why we are taking forward our requirement.
The English housing survey, published in February, found that 19% of all households live in the private rented sector and 17% in the social rented sector. This amounts to 8.2 million households. We know that aspiration for home ownership is high. This requires a new approach. Starter homes are a manifesto commitment and a national priority, so all local authorities must play their part in delivery. Therefore, we are currently consulting on a starter homes requirement to be set out in regulations.
We are seeking views on a 20% starter homes requirement on sites of 10 units or more, or larger than half a hectare. We accept entirely that this may not be appropriate for all residential schemes and a number of exemptions are being proposed, such as: a general viability exemption for those residential developments where it can be clearly demonstrated that the starter homes requirement would make the site unviable; and potential exemptions for specific housing types, such as estate regeneration schemes and developments led by affordable housing. We are also suggesting that there are particular cases, such as private rented sector developments and older people’s housing, where an off-site commuted sum in lieu of on-site provision would be more appropriate. This amendment would bring considerable delay to starter home delivery. Noble Lords are very aware of the difficulties in some councils of bringing forward local plan policies: many years of delay in some cases, and 30% of councils have not adopted a post-2004 plan. The Bill includes measures to accelerate the process but we cannot risk these delays for starter home delivery.