My Lords, we have debated with some intensity in Committee so far the need to build more homes, covering a range of tenures. There can be no doubt about the Government’s commitment. Promoting and supporting self-build and custom housebuilding is important in delivering that commitment. Doubling the amount of self-build and custom housebuilding by 2020 will not only result in more homes, but provide much-needed business for the smaller householder and housebuilder. More custom build housing will help drive innovation in alternative building techniques, and support and create new jobs.
We have made a positive start. The Self-Build and Custom Housebuilding Act 2015, which was guided through this House by the noble Lord, Lord Best, will come into force on 1 April this year, when local planning authorities must hold a local register of people seeking land for self-build and custom housebuilding, and have regard to that register when carrying out their housing, planning, land disposal and regeneration functions. This Bill is the next step: its self-build and custom housebuilding provisions will provide a much-needed definition, establishing that the essential criteria of all self-build and custom housebuilding is that the individuals have a significant input into and choice over their finished home, and intend to live in it as their main or sole property.
I know that one of the most significant barriers preventing more people building or commissioning their own home is access to land. As the noble Lord, Lord Taylor, pointed out, this is very much an issue. We appreciate his general support for this part of the Bill. These provisions will place a new duty on local authorities, requiring them to give development permission—suitable for self-build and custom housebuilding—for enough serviced plots of land to match the demand on their register. But I recognise that there may be some areas where the demand for self-build and custom housebuilding will far outstrip the available land supply. So, to ensure that we continue to protect the environment and build only sustainable developments, we must be able to exempt relevant authorities that are simply unable to permission sufficient land to meet demand for self-build and custom housebuilding.
As a result, Clause 10 will insert a new section into the Self-Build and Custom Housebuilding Act 2015, which will enable relevant authorities to apply to the Secretary of State for an exemption from the duty to permission sufficient land to match demand for self-build and custom housebuilding in their areas. The detail of the exemption will be set out in regulation.
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I thank the noble Lords, Lord Kennedy and Lord Beecham, for the opportunity to discuss the financial implications of the self-build and custom housebuilding policy. I agree with them that it is important that local authorities are protected from disproportionate or unreasonable burdens. The reason the Bill requires local authorities to permission suitable serviced land is that people wanting to build or commission their own home usually want to be able to start building as soon as they have purchased their plot of land. It is therefore important that the plot of land they buy is ready, or can quickly be made ready, for development.
The price paid for the land by the prospective self-builder or custom builder will, of course, reflect the actual cost of servicing that land. Hence, the landowner should be able to recoup what they have spent servicing the land at the point of sale. Land where the cost to put in basic services would be greater than its final market value would not be considered as suitable land and the local authority should seek alternative sites to permission in order to comply with their duty. A local authority should never feel that it has to permission land with very high service costs simply because there are insufficient areas more suitable for development. I draw attention to Clause 10, whereby we intend to create an exemption system for areas with a high demand for self-build and custom housebuilding and very limited land for development.
The Bill does not require the local authority itself to service the land. In many cases, including where it is the authority’s own land, we would expect the authority to work with a developer to put in the services, with the cost reflected in the sale price of the land. I hope that this will reassure the noble Baroness, Lady Bakewell. I know that my noble friend Lord O’Shaughnessy recognised this in his short intervention. Our £150 million serviced plots loan fund is available to builders, contractors, developers, registered providers, community land trusts and community organisations. Local authorities can also bid for funding, provided that they partner with a third party which can comply with the eligibility criteria. I strongly encourage local authorities to work proactively with such organisations in their areas in order to take advantage of this loan.
We believe that the amendment is unnecessary because the Government are providing local authorities with money to cover any new burdens in order to ensure that they can comply with the new duty. We are also enabling authorities to charge those on the register a fee which will cover the genuine costs incurred by the authority. The noble Lord, Lord Beecham, asked whether the Section 106 agreements will apply. I can confirm that they will, as long as they do not undermine the viability of the scheme. He also asked about a potential exemption relating to community infrastructure. I can confirm that that is the case.
I was struck by the speech of the noble Baroness, Lady Bakewell, and the example she gave of Exmoor. I have some sympathy; it is very much for the local areas to look at such an area of great beauty and work our between them which sites would be suitable, or unsuitable, for development on that basis. She also raised concerns about how self-build is financed.
My noble friend Lord O’Shaughnessy raised the issue of the timetable. Until the registers are in place and we can really understand the level of demand, it is hard to predict the impact of this legislation on the ground. We therefore need to wait until the registers are in place and as such, it is entirely appropriate that the detail is in the secondary legislation, so that it can be changed if necessary. Much of that regulation, including on fees and the time given to authorities, will be debated in both Houses so there will be further opportunities for input.
The noble Lord, Lord Beecham, raised the interesting and important question of whether servicing will include broadband. The Secretary of State has a regulation-making power to amend the definition of a “serviced plot of land” to add other services. At the moment, he has restricted the definition to electricity, water, waste water and highways, because we do not want to be prohibitively burdensome. The aim, after all, is to encourage more plots of land to be found. However, if broadband ought to be added in the future, we can certainly return to that issue. I believe I have covered the questions that were asked and I therefore ask noble Lords to withdraw their amendment.