My Lords, Amendment 47B and 53B follow on from the amendment in the name of the noble Lord, Lord Lansley, whose comments I much appreciated, and support the 12 amendments in the name of the noble Lord, Lord Tope. They would change the duty on local planning authorities from that of promoting starter homes exclusively to that of also promoting alternative home ownership schemes, with the added ingredient, in these amendments, that these extra home ownership products should be approved by the Secretary of State. The amendments in my name and the names of the noble Lords, Lord Kerslake, Lord Kennedy, Lord Beecham and Lord Stoneham, provide the opportunity for other—equally if not more desirable—home ownership products to be permitted in place of the one-club approach, the single option of 20% discounted starter homes.
The bright ideas of policy advisers 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. In the event that a more creative, more beneficial route to home ownership already exists—or may be invented in the future—it seems wise for the Secretary of State to allow for alternatives.
My amendments would not help, sadly, the fledgling new sector of build to rent, where institutional investors are putting in long-term money to build decent market rental housing. This amendment is only about alternative home ownership products, and I am concerned that, as the British Property Federation has warned, the gradually evolving institutional rented sector is likely to lose out to its new rival of subsidised starter homes. Build to rent also addresses the demand from younger people who cannot raise sufficient deposits and/or a large enough mortgage. The sector helpfully draws in new resources from pension funds and other institutional investors, and several build-to-rent developers are now offering good-quality and longer-term security than is common in the PRS at large. But this newly emerging sector will not be able to take advantage of the grant of many thousands of pounds going to each first-time buyer of a starter home.
I am sorry these amendments will not be useful to the build-to-rent proponents. However, they seek to recognise the Government’s ambition that home ownership should take precedence over renting. Within the open market, this government priority is understandable.
By extending the range of home ownership products to embrace schemes that may well prove more desirable than starter homes, these amendments and those in the name of the noble Lord, Lord Lansley, would assist the Government’s overarching aim.
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Shared ownership has been a valuable option for many buyers, as the noble Lord, Lord Tope, has remarked. Despite the impending loss of social housing grant, funding for this tenure has been sustained. It can help people on the lowest rung of the home ownership ladder and reach households for whom the 80% purchase price for starter homes is still too high. Other examples of alternative home ownership models are the rent-to-buy schemes, such as Gentoo housing group’s Genie house purchase scheme and the Rentplus product, which enables households to save for a deposit while in a rented home and to buy that property after a set number of years. Such schemes extend home ownership to people whom starter homes cannot reach but who can become home owners when they have saved prudently for a number of years.
The Housing Minister has indicated in the other place strong support for a range of different products to help access to home ownership and, since the starter homes model has many imperfections—as we will explore later in Committee—the Government would regret a one-size-fits-all approach. Indeed it seems odd to endow one particular model with this level of support and enshrine it in legislation. The Government will not regret giving themselves and local planning authorities a bit more flexibility in the promotion of low-cost home ownership. I support these amendments.