My Lords, I will speak to Amendment 46. I support all the amendments in this group and the comments that were made by the noble Lords, Lord Kerslake and Lord Best. I support the Government’s aim to provide more homes for those who cannot currently afford them, but fear that the time-limited discount of 20% will be seen as unfair by those not able to access it, and will be unlikely to increase the housing supply in the future.
I do not support the discount remaining in place for the limited period of five years. This is a very sizeable discount, as other noble Lords have explained, and it should be enjoyed by others looking to gain access to the housing market in the future. This is a discount which should be available in perpetuity so that the same home can be within the reach of others, despite the inevitable rise that inflation will cause to the price of the property over its lifetime. Have the Government thought about what will happen if a purchaser fails?
Who will get the discount if that initial purchaser defaults? Perhaps there is a bit of a perverse incentive for a lender to repossess after year 4.
Why should the first purchaser receive the discount, live in the dwelling for five years and then sell it, keep the discount and the uplift in the value of the house due to inflation and not pass that discount on to the next person? This discount is to be funded from local taxpayers, via the sale of high-value council homes. I feel certain that those taxpayers would wish their hard-earned money to be used wisely and to be recycled wherever possible.
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The Bill proposes that starter homes can be resold or let at open-market value five years after the initial sale. The restrictions on resales and letting at open-market value should be in perpetuity, as is often the case in many council-run, low-cost home ownership schemes, or extended to a longer period—for example, 20 years—to discourage speculation and enable more households to benefit, generating maximum returns from public investment. Further delivery of starter homes through the planning system will create significant burdens on council planning teams, so they should be fully funded by reforms granting local planning authorities the flexibility to set planning fees locally.
Like others in your Lordships’ House, I have received many briefings from a variety of organisations, all saying more or less the same thing. The 20% discount should not be a one-off. It should attach to the property in perpetuity and it should not be a one-off windfall for the first purchaser. I have heard the Minister’s rationale for the discount being a one-off but I regret that I am not convinced, and neither are those who have contacted me on this issue.
None of those lobbying believes that this policy will help to solve the housing crisis the country is currently undergoing. My preference is for a discount in perpetuity. Failing that, I support the sliding scale proposed by the noble Lords, Lord Best, Lord Kerslake, Lord Cameron and Lord Beecham, in their amendment. I urge the Minister to encourage the Government to reconsider this aspect of the Bill.