Housing and Planning Bill — House of Lords, 2016-05-04
Topic: Housing
Robert Kerslake (Crossbench, Unknown): My Lords, I shall speak to Motion B1. In doing so, I declare my interests as chair of Peabody and president of the Local Government Association I welcome the Government’s movement on the taper, which I believe to be an entirely sensible way to reframe the starter homes product. However, there remains an outstanding issue that needs to be addressed, and I hope the Government will listen again and make changes. The amendment before us does not seek to insist on Amendments 9 and 10, which have previously been considered, but instead adds an additional clause to the Government’s own Amendment 10A. This gives the local authority the opportunity, if it can demonstrate a need, to meet part or all of the so-called starter homes requirement through alternative forms of affordable home ownership. It will do so within the general duty set out in the Bill to promote starter homes as part of its planning functions. This does not go as far as my previous amendment, which gave complete flexibility to local authorities across both affordable home ownership and affordable rents in making their planning decisions. In a genuinely localist world, this remains the right approach. However, in keeping with the spirit that this House does not simply seek to reverse the decisions of the other place at this stage of the Bill, I have proposed an alternative, more restricted amendment, and I shall briefly outline my reasons for doing so First, the Bill gives the Secretary of State quite unprecedented power: namely, to prevent a local authority granting permission on an individual planning permission unless that planning application contains a specified proportion of a particular type of housing—starter homes. This is a degree of centralist imposition that has never before been contemplated and its consequences are completely unknown. Moreover, we are imposing a product that is entirely new and indeed, as we have just heard, is still being designed. Not one starter home has yet been sold. It has gone from being an interesting and positive prototype to the main type of provision of sub-market housing without going through any of the essential stages of product development in between. Allowing alternative types of affordable home ownership products, such as shared ownership and rent to buy, within the starter homes requirement would provide vital local flexibility while we learn how the starter homes product works My second reason is that, as a result of the starter homes requirement, other forms of affordable housing will be squeezed out of Section 106 planning agreements. There will be far less opportunity to include social or affordable rented housing as part of the planning approval. This will, in turn, reduce the supply of such properties at a time when they are desperately needed, especially as affordable housing grant will largely cease from 2018. To be clear, the issue with starter homes has never been about providing a new offer to young first-time buyers; it has been that we should not do so at the expense of those on lower incomes who are in even greater need. We do not know precisely what the impact of the Government’s proposals will be. However, the draft regulations, which have just been referred to, propose a figure of 20% starter homes in each application On the Government’s own assessment, the average cash value of affordable housing in planning agreements is 22%. It does not take a great mathematician to see that, even if the average cost of starter homes is less than that for other types of affordable housing, there will be little or no remaining flexibility left for local authorities. The starter homes requirement will consume almost all the available value. I have no doubt that starter homes will work well in some parts of the country; I am equally clear that in other areas they may not. In London, we know that Shelter has calculated that it will be possible to buy a starter home only with an income of £77,000 and a deposit of £97,000. At best, this applies to no more than 20% of those in London who currently rent. In other higher-value areas, such as the south-east, Shelter has calculated that more than half of those currently renting will be unable to take advantage without parental help. This disparity is why many local authorities are saying to me—and, I suspect, to the Government—that they must have the flexibility to do local deals and develop the low-cost home ownership products that meet their local needs. One size does not fit all, yet this is what the Government are seeking to impose. The amendment would provide local authorities with a greater ability to get the mix right in their area My third and final reason is that giving greater local flexibility will work better to deliver what should be our overriding ambition—to build more housing of all types and tenures. It will give a much greater incentive to local authorities to approve planning applications quickly if they can secure the type of affordable housing that they believe will generally meet the needs of their local area. There would be less dependency on straight market sale and more scope to adjust the mix if market conditions should change.