This briefing is intended to update Northern Housing Consortium (NHC) members on the progress of the Housing and Planning Bill 2016 (henceforth ‘the Bill’) currently undergoing its Committee Stage in the House of Lords. This briefing will be a rolling briefing with updates added on issues relevant to members as and when the House of Lords have considered it in their debate.
About the Bill
Introducing the Bill at Second Reading, Greg Clark MP, said “every Parliament that is elected has a responsibility to the future and to do all that it can to ensure that the lives of the next generation are better than those of past generations. Nowhere is that more important than in ensuring that the next generation have the homes they need.”
Much of the Government’s Bill sets out the commitments made in the Conservative Party manifesto notably the pay to stay measure, the voluntary right to buy extension to housing association tenants, Starter Homes, new regulations in the private rented sector and a rogue landlords database; measures around the sale of vacant high value local authority housing and changes to the planning system in England.
About Committee Stage
The Committee Stage of a Bill is designed to enable a line by line read through of the Bill. The members of a Bill Committee are drawn from across the political parties in the House of Commons but the Government will always have a majority in the Committee. Alternatively, the Bill may be heard by a Committee of the Whole House in which any member can contribute. It serves as an opportunity for the Government and the Opposition to put amendments to the Bill and for the Committee to vote of their inclusion or exclusion.
Timeline of a Bill
First Reading – where the Bill is introduced either in the House of Commons or the House of Lords, but no debate takes place
Second Reading – where the general principles of the Bill are discussed and debated.
Committee Stage – where detailed, line by line examination of the Bill takes place and amendments can be introduced and voted on, usually conducted by a small group of MPs or Lords that are representative of the political make-up of either the House of Lords or the House of Commons, or by a Committee of the Whole House
Report Stage – where a debate is conducted on the floor of either the House of Commons or House of Lords with any MP or Lord allowed contributing to proceedings. Report Stage allows the changes introduced at Committee Stage (amendments) to be reported to the whole House and gives all MPs or Lords the chance to introduce their own amendments to the Bill.
Third Reading – a short debate and final vote on the Bill before it proceeds to either the House of Lords (if the Bill is introduced in the House of Commons) or the House of Commons (if the Bill in introduced in the House of Lords) where the process then begins again in the respective House. Amendments can be introduced and they are often amendments that reflect debates had at Report Stage.
This briefing does not attempt to cover every clause and amendment in the Bill, rather it is intended as a summary of the main clauses and amendments we feel will be of interest to the NHC membership.
Moving his amendment on Starter Homes, Lord Tope noted that the starter homes part of the Bill was causing “widespread concern” and that despite his openness to the need for starter homes, he was concerned that there was only reference to starter homes and little else. He noted that “the present wording imposes a clear duty on local authorities, as planning authorities, to promote starter homes, with no mention of any other tenure” and that his amendment sought “to widen the duty on local authorities to promote home ownership schemes”.
Speaking to Lord Tope’s amendment, Lord Lansley noted that he supported the Government’s position on starter homes. He did express concerns highlighting that, in his view, “the definition of starter homes is narrow” and questioned “whether a local authority should have a duty to promote the supply of a particular form … of the homes that young people might aspire to buy”. He expressed doubts about the wording of the Bill noting “the balance of need in an area may not necessarily correspond with what young people in that area are looking to acquire … if the definition of what a local authority must seek to promote is very narrowly defined”. These are concerns shared across the North where the need for social housing and other products – such as shared ownership – is greater than the need for starter homes.
In his remarks, Lord Best suggested that the beauty of Lord Tope’s amendment was that “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”. Picking up a key theme explored by the Commission for Housing in the North (of which Lord Best is a member) he noted his concern 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”.
Lord Kerslake, illuminating on the history of the starter home idea said that the original idea for starter homes would have been “applicable to what were described as brownfield exception sites—those that had not previously been identified for housing and could therefore be built on with this product. The uplift in values would cover the 20%” He expressed concern that “we have not yet had a property sold as a starter home; we do not yet know in detail what constitutes a starter home. Yet it becomes the centrepiece of this Bill.” He also expressed concerns that starter homes “reward a selective group of people who are able to benefit from them” before adding his encouragement to the Government to “think carefully about putting every bit of their focus on starter homes at the start of this Bill, and to … seek to broaden this section to include other forms of home ownership.”
Baroness Royal, in her remarks, highlighted that “the Bill’s demand that starter homes should carry the whole focus of housing provision means that localism and local decision-making is absolutely fettered. The fact that absolute priority is given to home ownership and starter homes is wrong”. She added that “most families would like a roof over their heads to provide them with stability, and that may well mean affordable rents and affordable homes” as well as home ownership. She also questioned the affordability of such products referring to Shelter’s research that found ‘that people in only 2% of local authority areas will be able to buy their own homes, even starter homes, were they earning the Living Wage’.
Lord Horam, in his contribution, suggested that “we are proceeding in the dark” noting that it is “apparent … that the Government really had not begun to finalise any sort of modelling of the effect of the legislation—not only the financial effect, which is very germane to our discussion, but the social effect and the effects on supply of housing.” Speaking about a meeting on the Bill he attended recently he said “they confessed—and I am grateful for this to the civil servants who were there—that they had not got far enough with their modelling, simply because Ministers had not taken decisions yet.” He also noted the LGA’s research that “should 100,000 starter homes be built through the planning system, between 56,000 and 71,000 social and affordable rented homes would not be built”.
In her response to the debate on the first group of amendments, Baroness Williams said that “Starter homes are a new product and, although we have debated the merits and demerits of them being so prominent, [the Government] want to ensure that councils are delivering on the key manifesto commitment. The electorate will expect us to deliver on this commitment, and for this reason we want the starter homes clauses to focus on starter home delivery”. She sought to reassure those Lords who expressed concern regarding council’s obligations to promote Starter Homes saying “councils will still be able to seek other forms of home ownership from new development, as I have previously stated, once this requirement is in place. These clauses do not switch off the abilities of councils … to secure other forms of alternative home ownership products, just as previously the affordable housing duty did not switch off other housing home ownership products. We expect them to actively support starter homes, but it does not remove their ability to deliver home ownership products”
In the second group of amendments on starter homes, it was highlighted by Lord Shipley that “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.” He continued “you have to give local authorities greater flexibility than they currently have”
Lord Best, in his remarks on the second group of amendments, highlighted that “that there is now a conflict between the NPPF guidance and the new requirement for a proportion of starter homes to be given the highest priority in future local plans” reminding the House that the NPPF gave “local planning authorities the job of preparing a strategic housing market assessment” that took into account all housing need. Lord Best also spoke of the iniquity of starter homes being aimed at under-40s, saying that “housing for older people also helps the younger generation, the people whom those starter homes seek to help, because when we older people downsize to help ourselves, to enjoy somewhere easier to manage, cheaper to heat, without steep steps and outdated facilities —when we help ourselves by rightsizing—we help the next generation in a chain reaction that achieves, on average, more than three other moves”.
In his remarks, Lord Young said he sought to “redress the balance” of the remarks made before him, suggesting that “basically, what [the Government] are trying to do is move the dial of housing policy away from renting towards home ownership. We are not moving the dial nearly as far as some noble Lords have suggested, in that there remains a substantial commitment to investment in social housing for rent.” He highlighted that 86% of people aspired to own their own homes and reflected his own view that “I would like to see the starter homes initiative initially targeted on existing social tenants and housing association tenants who, for whatever reason, do not have the right to buy—they might not have been there for 10 years—so that the initiative would enable a social tenancy by moving somebody out. Alternatively, the starter homes initiative could be targeted at those on the waiting list so that they are removed from it, enabling others to move ahead.”
Lord Kerslake noted his concerns about housing market variation – both in London and in the North and South – saying that “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”. He added that there were clear winners and losers from this policy: “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” and “the people who are the most desperate in their need for affordable rented accommodation”. He concluded his remarks warning “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”.
Earl Listowel sagely noted that “we have a historical deficit of investment in social housing” in the UK adding that he was “concerned … that in 2018, the Government will invest £2.3 billion in starter homes, self-build homes and other areas. However, from 2018 the funding for … social housing … will be declining.” These comments were echoed by Lord Stoneham who noted “we are now going to hit the buffers [on building adequate homes of different types and tenures] because of all the initiatives and impetuses behind starter homes and the promotion of home ownership.”
Responding for the Government, Baroness Trafford made clear that “together these amendments give me the opportunity to make clear that the Government are committed to increasing housing supply across all tenures”. Intervening on an exchange between Baroness Trafford and Lord Campbell-Savours about affordability, Lord Kerslake noted that “it is not good enough simply to look at national averages” on the issue of starter home, adding “you absolutely need to see the figures broken down by region.” She took exception with figures quoted by several Lords from Savills and Shelter noting that the methodology used relied on regional averages whereas the starter home policy would be based on average prices in a local area.
Addressing concerns raised by some Lords that the commitment to promote starter homes would result in an erosion of local oversight of housing needs, she said “Government are committed to investing further in the delivery of affordable houses, and local authorities will still be expected to plan their housing development around the needs of their communities” but that the Bill would “provide for a starter home requirement to be set for new developments”
In response to concerns around regional variability in housing markets, she remarked that “I understand that housing markets and needs differ across the country but the aspiration to own a new home does not. Every first-time buyer under the age of 40 should have the same opportunity to buy a starter home.”
An amendment tabled by Lord Beecham and Lord Shipley which sought to add a sunset clause to the Starter Homes policy generally – with affirmative action needed by the House of Commons for it to continue – was strongly opposed by Baroness Trafford who alluded to the manifesto commitment made by the Conservative Party to deliver 200,000 new starter homes. She also noted that such a sunset clause would affect the sustainability of delivery. With this, Lord Beecham withdrew his amendment.
The next stage of the Bill is Third Reading whereby MPs from all parties can debate the changes (if any) made to a Bill at Committee Stage and propose further amendments. This stage is not due until May owing to the scope and complexity of the Bill requiring a longer time for Lords scrutiny.
If you have any questions or feedback about this briefing, or would like to work with NHC on the Housing and Planning Bill 2016 as it progresses through the House of Commons, please email email@example.com.