Housing and Planning Bill — House of Lords, 2016-03-03
Topic: Housing
Rosalind Grender (Liberal Democrats, Centre to centre-left): My Lords, Amendment 53, in my name and that of my noble friend Lord Shipley, calls for an annual report by the Secretary of State containing information on the construction and sale of starter homes in the area, and a report on the composition and incomes of people who have purchased starter homes in each area during the relevant period. The amendment has two purposes. The first is to assess progress and the second is to understand who is benefiting from it. I also take this opportunity to say that we support the other amendments in the group. In particular, 50 years on from Shelter being started, the fact that children are still in temporary accommodation reflects a failure for all of us Shelter calculates that the starter homes scheme is a significant public subsidy of £8.4 billion, working on the assumption that starter homes sell at 20% less than the average price paid by first-time buyers in England, and that the subsidy per home will be worth about £42,200. Other noble Lords have raised concerns about starter homes being in place of social housing. The noble Lord, Lord Kerslake, set out in some detail how inaccessible this product may be, particularly to families on low wages currently in the private rented sector. But it is worth reminding ourselves that Shelter calculates that the average starter home will be unaffordable even to families on average earnings in some 58% of the country Given that starter homes will be sold at a discount from the market price and that this discount will be paid for through a reduction in the usual obligations, and with such a large amount of public subsidy going to the buyers of starter homes, it is vital that the Government and regulators such as the National Audit Office have good evidence as to who is benefiting from such subsidy. This will help them and others to assess whether public money is being well spent in the context of the wider housing crisis We have already explored possible abuses of the scheme in some detail. It is critical that the Government take steps to know who is living in them—that is the second part of the amendment—what their incomes are and whether we are reaching the all-important gap in the market that the Minister described today. Given that we already know that 40% of right-to-buy sales are now buy-to-lets, we do not want the same thing to happen with starter homes. I welcome the Minister’s reassurance earlier this afternoon that there will be some kind of mechanism to ensure that that does not happen: I am glad that we have learned that lesson I shall talk very briefly—I know it is getting late—about the market confidence among developers in this area. I promise I shall be brief. We have already heard Jones Lang LaSalle referenced a few times as part of the development sector. It says that the UK housebuilding sector will need to see a near 50% increase in capacity if it is to meet the ambitions of the Government’s 200,000-plus homes per annum. The jury is very much still out for the Council of Mortgage Lenders: while it is working with the Government to try to make this happen, it worries terribly about this being such a distortion of the market There was a very interesting report by Pocket, which is exactly the kind of innovative, private-sector thing that we should be encouraging in London and which produces the kind of homes that starter homes actually look and feel like. It is a highly innovative company, but it says that there is a real danger that this could put off developers such as itself. Its report states: "For lenders, it is virtually impossible to value a product that only has a five-year shelf life. Lenders will, as a result, limit their exposure to developments with Starter Homes, which, without sufficient credit, will fail to grow in number" I am sure we will explore issues of market distortion and how developers are feeling—whether they have full confidence in starter homes—over the next few days, but I felt it important to raise it now because it is one reason we believe in this amendment: there should be some mechanism for annually looking at how this is progressing.