My Lords, I speak in favour of the amendments in this group—in particular Amendment 48C in my name and Amendments 48A and 48F which I have supported. This group of amendments addresses two issues which concern me most about this section of the Bill. The first is that starter homes will come ahead of and instead of affordable rented accommodation. There is no doubt about that in the way this will play out. Secondly, the Government will dictate to a level I have never seen before the proportion of starter homes that are built, down to individual schemes. This is quite extraordinary.
The Bill gives local authorities a duty to promote starter homes. As the noble Lord, Lord Young, said, this is a manifesto policy. I acknowledge and accept that point, but it gives them an absolute duty. It does not say, “Promote starter homes as part of your wider housing plans”. Had it said that, we would now be in a different conversation. It simply says, “You will promote starter homes”. It does not say anything about any other tenure. So, yes, the manifesto does say that the Government can ask and indeed require local authorities to promote starter homes, but they should be asked to do it in the context of their primary role, which is to assess housing need and provide for it. That is the first point I really care about in this Bill.
The second point, as the noble Lord, Lord Best, has made very clear, is that we have now a well-established process through the NPPF of housing market assessment followed by a local plan and the identification of the necessary land. It is not an easy process. Local authorities go through a lot of heart-searching before they come up with their local plan. Crucially, they think about the local needs in their area before they agree that plan. What we have here is the superimposition of a government view about one tenure or even one product—it is not even a tenure—ahead of other products. It makes much more sense, as the amendment seeks to put forward, that they consider their local plan and have a duty to promote starter homes but that they do it in the context of a plan that they have already developed and are seeking to promote. If starter homes are such a popular and well-regarded product, it would be very surprising if local authorities do not rush to put it in.
I touched earlier on the requirement for starter homes in individual applications. One thing we do know is that we have massively different housing markets in this country. I will say a few words about, and declare my interest in, the London Housing Commission in a minute. Where housing markets can vary literally over two or three miles, never mind between the north and south of the country, having the Secretary of
State judging the proportion of housing that needs to be starter homes in each application before that application is approved is asking for trouble. The one thing that we can be sure of is that he will get the number wrong for some part of the country. He may get it wrong for every part of the country, but he will definitely not get it right everywhere. It is in many ways the worst kind of centralism.
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I will illustrate that with the results of the London Housing Commission, on which we will report on 7 March. Our interim report was published in December. We found that the prices of houses in London were now 50% above the pre-crash levels. In the rest of the country, they were 5% above pre-crash levels. In London, 80% of what is being built at the moment is unaffordable to 80% of Londoners. That is the situation we now face in London. The average house price is more than £500,000, which is 12 times the average salary. In other words, we have an absolute crisis in London. We should ask ourselves the question: do we think starter homes will help address the scale of the challenge that London faces? We know for certain that they will not address the scale of the challenge in areas with poor housing markets. It is imperative that we do not go down the road of imposing a requirement on every single authority about the level of starter homes that they must have.
We touched on the issue of whether they will be a substitute for affordable rented housing. The Minister has spoken of the £1.6 billion going into affordable rented accommodation—affordable rented and shared ownership, I should say. What is not said is that the £1.6 billion is in fact the completion of a programme started under the coalition Government. It is the 2015 to 2018 programme being completed, and the reason it is being carried through is that allocations have been made and money committed. If we look at the programme post-2018, we will see that it drastically falls and remains only for specialist housing. So we must not get any sense of this being a determined policy. It is a consequence of a policy agreed in the previous coalition Government that is being followed through in the current one because allocations have been made.
We should always ask the question in any policy: who gains and who loses? In this policy the people who will gain will be people under 40 who are close to being able to buy a property—maybe actually able to buy a property, because there is no income test on this, but who take advantage of the starter homes scheme. In other words, it will be people at least in the upper half of income and in London in the upper 10% of income. Who loses are the people who are the most desperate in their need for affordable rented accommodation. That is the equation we are being asked to agree in this part of the Bill. When starter homes were genuinely additional, I could see the point of them. When they replace desperately needed affordable rented accommodation, it is wrong, to be frank.
We should look very seriously at these amendments, and the Government should look very seriously at them. This policy will not work across the country and we should leave the decision for these choices where it should properly lie—with individual local authorities.