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03/03/2016

Housing and Planning Bill: What did the House of Lords say about starter homes?

Words: Laura Edgar
Housing / iStock

Starter homes came under scrutiny when the House of Lords met for the second session of the committee stage review of the Housing and Planning Bill on Tuesday 1 March.

Wording imposes duty to promote starter homes and no other tenure

 

Lord Tope, Liberal Democrat, discussed the amendments he had put forward regarding starter homes, specifically around the promotion of more than just starter homes.

He had no objections to starter homes because in the right circumstances and the right places they could “make a useful addition to housing provision for some people”.

But he did express concern that the present wording on starter homes “imposes a clear duty on local authorities, as planning authorities, to promote starter homes, with no mention of any other tenures”.

Referring to Section 106 discussions, local authorities may say, or at least feel, he continued, that they have to deliver a certain number of starter homes and therefore cannot specify other forms of affordable ownership provision.

“I am sure we will hear from the minister that that is not the government’s intention, but I fear it is very much likely to be the effect,” said Tope.

The role of the local authority, planning authority and sometimes housing authority, he said, is to meet all types of housing need in order “to be in the best position to judge what the local needs are” – the type of tenure, volume, place and other circumstances appropriate to a given area.

Definition of starter homes narrow

 

Lord Lansley, Conservative, after expressing his support for the initiative, conceded that the “definition of starter homes is narrow”.

Citing the area in which he lives, Cambridge, Lansley said it is very difficult for many young people to be able to afford a new home, likewise across the country. With deposits “perhaps doubling” in the last decade, “they are very often not only looking for a substantial deposit, but for family help”.

“If starter homes are properly defined, I am all for that; if starter homes are narrowly defined, a local authority must have the discretion to pursue other mechanisms for promoting home ownership and to help young people buy their own homes.”

Lansley’s amendments would put a duty on local authorities to promote starter homes or alternative affordable home ownership products. They would not, however, prevent the secretary of state setting a starter home requirement.

Initiative ‘got star billing without consultation’

 

Crossbencher Lord Best said the amendments that he had proposed with Lord Kerslake, Lord Kennedy, Lord Beecham and Lord Stoneham provide other home ownership products, rather than the “one-club approach” of 20 per cent discounted starter homes.

“The bright ideas of policy advisers,” he explained, “may not always represent the only or the best approach and the starter homes initiative got its star billing without consultation with key practitioners or other politicians.”

After acknowledging the amendments would not benefit build to rent, Best said shared ownership has been a “valuable” option for many buyers. “It can help people on the lowest rung of the home ownership ladder and reach households for whom the 80 per cent purchase price for starter homes is still too high.” He also cited rent-to-buy schemes as an option.

It went from an innovative idea to main source of supply

 

Crossbencher Lord Kerslake explained how the origins of the starter homes policy lie with the 2010-2015 coalition government.

“It came forward as an interesting idea that would be genuinely additional to other new sources of supply,” said Kerslake. “It would be applicable to what were described as brownfield exception sites – those that had not previously been identified for housing and could therefore be built on with this product. The uplift in values would cover the 20 per cent.”

But between the idea coming forward and the election in May 2015, “it moved from being an interesting, innovative idea to being the main source of new supply”.

Such ideas, he said, are usually trialled first. Instead, “we don’t yet know in detail what constitutes a starter home. Yet it becomes the centrepiece of the bill”.

Essential to increasing housing supply

 

Baroness Redfern, Conservative, said the rate of home ownership has been “falling since its peak in 2003, despite the aspiration to home ownership remaining very strong”. Younger households in particular are less likely to own their homes than a decade ago, she said.

Her view was that starter homes are essential to increasing housing supply and that they would “encourage younger couples who wish to start a family to get on the property ladder and provide security for their future families”.

“Embedding” starter homes in the planning system would make it “easier and faster” for planning permission… to be granted and make interventions in the local planning process smarter.” She added that she hoped the minister would say how the government would assist councils in meeting these “important duties”.

100,000 starter homes only scratching the service

 

Baroness Bakewell of Hardington Mandeville said the government’s target of delivering 100,000 starter homes in five years would “only scratch the service of the homes that are needed”.

What is needed, she said, is a mix of housing, including home ownership outside of starter homes.


The full transcript of the session can be found on the UK Parliament website.


A round-up of the report stage of the bill in the House of Commons, held on 5 January, can be found here. 

A round-up of the second reading in the House of Commons, held in November 2015, can be found here.

Image credit | iStock

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