Housing and Planning Bill (Fourth sitting)

Teresa Pearce Excerpts

Thursday 19th November 2015 Public Bill Committees

[Dr Blackman-Woods]

My hon. Friend makes an excellent point. It struck me yesterday, as I went through the evidence to the Committee, how many people commented on their concern that such an emphasis on starter homes risks crowding out other sorts of low-cost home ownership. They suggested that perhaps the Government should have looked at other ways of supporting people into home ownership, rather than concentrating on starter homes as much as they have done.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

Is my hon. Friend concerned, like me, that it is not just affordable rent that could be crowded out? The British Property Federation believes that starter homes could kill off the build-to-rent sector, which is one of the fastest-growing in the UK.

[Dr Blackman-Woods]

Yes. That is a very worrying piece of evidence. Interestingly, it is not only the British Property Federation that thinks so. I was looking, as one does, at comments made by the Mayor of London. I notice that the Mayor’s office is concerned that the measure might crowd out other initiatives by the Mayor to support people in moving from renting into home ownership.

Clearly, the issue is not one that we have dreamed up out of nowhere. Out there in the real world, people who are responsible for supporting the delivery of housing and, indeed, producing housing, are concerned about the impact of the Bill, and particularly the clauses in question, on the viability of other products.

--- Later in debate ---

[Brandon Lewis]

I shall keep my comments relatively brief, because I know the Committee is keen to ensure that we finish at least clause 1 before we break at 1 o’clock. We have just spent 45 minutes discussing the first of two amendments to clause 1, a one-line clause. I draw hon. Members’ attention to what clause 1 does: it simply explains what the chapter is about. It states:

“The purpose of this Chapter is to promote the supply of starter homes in England.”

I appreciate that the hon. Lady was having a wider discussion about the housing market more generally, but I will try to deal with the points about the one line of the clause.

As has been said, we should be proud of our record in both the previous Parliament, as a coalition, Conservative-led Government, and this Parliament. We delivered more council homes in five years than the previous Labour Government delivered in 13. In fact, under the Labour Government, the number of affordable homes dropped by 420,000, whereas in five years we increased the number of affordable homes. The hon. Lady outlined what we are doing across all tenures.

Let me focus on the questions that link to this one-line clause. Clause 1 outlines that the purpose of this chapter on starter homes,

“is to promote the supply of starter homes in England.”

Amendment 59 would change the purpose of the chapter to promote the supply of,

“new homes across all tenures”.

The Government are totally committed to increasing housing supply across all tenures. In fact—the hon. Lady and other hon. Members will appreciate this—we do not need legislation to do everything we want and need to do. We should not use legislation to increase housing supply where we do not need to do so. We have got our affordable housing guarantees; the guarantees scheme, with billions of pounds coming through for the private rented sector; the voluntary deal with housing associations, which the chief executive of the National Housing Federation confirmed will increase housing supply; the Help to Buy scheme; the builders finance fund; the planning changes we have made, some of which we will discuss later in this Committee; the fact that we increased local authorities’ headroom to enable them to borrow more—there is still £2 billion-worth of headroom, so local authorities can go further with building—and the work we are doing on custom build. I could go on, but I will stick to the one-line clause that we are discussing.

More than 608,000 new homes have been built since April 2010. That means there are now 795,000 more homes in England than there were in 2009, but we must go further—on that we agree. Housing starts in England are at their highest annual level since 2007. I am proud of that, but we need to go further. In the year to 31 March 2015, the reformed planning system gave planning permission for 261,000 new homes—up more than 64% on the year to March 2010. Starts on new homes in the year to June 2015 totalled 136,320 homes, compared with about 75,000 in the year to 2009. The hon. Lady’s boss, the shadow Housing Minister, is not sitting on the Committee, but when he was Minister he oversaw the lowest levels of house building since about 1923—75,000, 88,000 and 95,000. It is now back up to more than 136,000, but we need to go further.

There were more than 131,000 housing completions in the year to June 2015—15% up on the previous year. That is good; we are on the right trajectory, but we need to go further. We want to do more. The clauses are about something new, something additional—a new approach to addressing the pressing problem of young people and home ownership. We cannot rely on failed past models of housing delivery that, in and of themselves, have not delivered enough. Planning is part of that. If we are to address the current difficulties we need to innovate, and starter homes are innovative.

[Teresa Pearce]

The Bill says that the purpose is,

“to promote the supply of starter homes”,

and the Minister just said that this is an innovative new approach. One of the barriers for people who want to buy their first home is access to finance. Has the Minister had any conversations with mortgage lenders about the way they approach these homes, which will have a strange type of market value that they are not used to?

[Brandon Lewis]

Yes, we have. One point I think I made in the oral evidence session is that when starter homes are linked to Help to Buy, which requires just a 5% deposit—bear in mind that, as we have seen in evidence, there are new build homes in our constituencies for below and just above £100,000—home ownership is made available to people who have been cut out of the market since Labour’s recession. That is also why the Conservative party manifesto included the ambitious target of building 200,000 starter homes for first-time buyers under 40. The Bill sets the framework for delivering on that commitment.

The hon. Member for Greenwich and Woolwich asked on Tuesday, as has been asked today, on what evidence the Government wish to legislate. Over the past 20 years, the proportion of people under 40 who own their home has been on a continuous downward trend: it has fallen by a third, from 62% to 39%. During that same period, there has been a 25 percentage point increase in the proportion of that age group who rent homes in the private sector: from 17% to 42%. By contrast, the proportion of people over 40 who are homeowners has remained above 70% throughout the past 20 years.

The Council of Mortgage Lenders recently looked into the challenges facing first-time buyers. It found that 71% of those born in 1970 were homeowners by the age of 40, but it projects that 51% of those born in 1980 and only 47% of those born in 1990 will be homeowners when they are 40. That is unacceptable and that is why we have included clauses in the Bill that build on our other work on housing supply.

Clause 1 will lay the foundations for 200,000 new starter homes to help young first-time buyers on to the property ladder by 2020. As I said on Tuesday, starter homes are just one part of our package of affordable housing options, which will increase the choices available to those who wish to own their own home.