My Lords, I support Amendment 37, to which my name is attached. I declare at the outset that I am a vice-president of the Local Government Association. I shall also speak to Amendment 47 and, in practice, several others.
The overriding concern in this group of amendments is that the Bill must be about renting as well as home ownership. That is why we have two separate groups—the last group looking at ownership and this one looking at all tenures. The principle is very simple. Renting must still be supported for lower-income households where it is not possible for them to buy their own property. I remind the House that there are some 1.3 million people on social housing waiting lists in this country. So I hope that the Minister will understand and accept that the Bill cannot just be about starter homes for owner occupation but must include social renting.
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I will draw your Lordships’ attention to the Government’s own impact assessment, which admits that there will be fewer social homes for rent. On page 38 in paragraph 1.1.26 headed “House builders” it states:
“Starter Homes are required to be sold at a 20% discount. The Government has supported this by removing the Section 106 affordable housing contribution and through not having to make a payment through the Community Infrastructure Levy and other tariff style payments”.
There is a direct consequence of that decision. Section 106 currently delivers half of all new affordable homes. It matters to the building of new social rented homes because grant funding for these homes has been reduced, funding for affordable rent ends in 2018, and cuts to social rents limit the ability of local housing bodies to build new homes. So, as my noble friend Lord Tope said at the end of his speech in the conclusion of the previous group, the Bill has to be about all forms of tenure and not just about starter homes.
The reason is that Shelter research has found that starter homes are unaffordable to people on low incomes in 98% of the country and unaffordable to those on middle incomes in 58% of the country. As Shelter says, starter homes clearly serve different markets to social
rent, so they should be planned as additional—but if they are to be additional, the resources need to be provided and we cannot simply remove the ability of local housing bodies to build the homes for social rent that are needed.
The Local Government Association and a number of other bodies have produced very similar sets of statistics and the sense of direction in all of them is the same. The million homes by 2020 that the Government talk about very frequently is of course a gross figure and not a net figure and so takes no account of demolitions that may occur in that time—for example, the Prime Minister’s initiative on demolishing some estates. So we need to be much clearer about this because, since household formation on the Government’s own figures is increasing by 200,000 a year, we are not going to be solving the housing crisis by the end of this Parliament. So I hope that the Minister will take away the comments made on this group and on the previous group and think very deeply about how the problem of affordability for so many people who cannot aspire to a starter home can be achieved.
Shelter has estimated that someone seeking to buy a starter home will need a deposit of £40,000 and an income of £50,000 to afford it, and in London a deposit of £98,000 and a salary of £77,000. These are very large sums of money, and this raises questions about whether the Government have thought through the implications of all the different aspects of this Bill, which seem to be a set of silo initiatives which are not properly joined up at a local level.
That takes me to the crucial point on which the noble Lord, Lord Kennedy of Southwark, finished his contribution. It is that you have to give local authorities greater flexibility than they currently have. Will the Minister look at ways of giving local authorities greater flexibility to deliver other forms of affordable housing alongside starter homes, whether for owner occupation in the form of shared ownership, say, or through additional homes for social rent, particularly in view of the fact that in the comprehensive spending review the Chancellor provided additional funding for housing?
In the previous group, the National Planning Policy Framework was raised. Can we be clear about whether we are in fact changing it without admitting to the fact? The NPPF already requires councils to plan for a mix of housing to reflect local demand, so if it continues to say that, presumably it is accepted that it is the duty of local authorities to develop polices which fit the needs of their area.
There have been several problems with this Bill. I pay tribute to the noble Lord, Lord Horam, for identifying one of them, which is that we simply do not have enough information, partly because so much is being restricted to regulations, so that much cannot be explained, even when we attend the technical briefings. It makes it very hard to know exactly what the Government are planning to do. As we have heard, the problem is about supply. I do not think that the Government are going to solve the problem they have unless they address that problem of supply. I hope that the Minister will think carefully about what has been said, because when we get to Report on this matter we will be addressing it all over again.