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Government faces major defeats by the Lords on Starter Homes

Week in Westminster

Published: 15 April 2016 | Author: Michelle Vosper

This week the government suffered three major defeats in the House of Lords during report stage of the Housing and Planning Bill. Peers voted to:

  • To introduce a period of 20 years where the 20% discount on starter homes must be repaid if the property is sold. The percentage repaid will reduce by 5% each year.
  • To give local councils the power to set the threshold of Starter Homes locally based on an assessment of local need – government had planned to impose a 20% threshold nationwide.
  • To require parliamentary approval before government can make any changes to rules forcing local authorities to give the proceeds of high-value council house sales to the Treasury.
  • The government has also conceded to consider a proposal to ensure one-for-one and like-for-like replacements of council homes sold.

During the second reading debate of the Finance Bill the financial secretary to the Treasury David Gauke confirmed that the 3% stamp duty surcharge for second and buy-to-let homes would not apply to main houses with ‘granny’ annexes. The government will amend the Bill to rectify this. In answer to a written question by Laurence Robinson MP, Mr Gauke confirmed the government’s position in more detail:

“The Government is amending the Finance Bill to exempt annexes from the higher rates of SDLT when purchased in the same transaction as a main residence. In this case, the transaction will be treated as only involving one dwelling and SDLT at the standard rates will apply. An annex will be defined via objective criteria. It must be within the grounds of the main home and worth no more than a third of the total transaction value.”

Staying with the the new stamp duty surcharge, answering written question by Kevin Hollinrake MP on the 36 month grace period, Mr Gauke replied:

“The Government appreciates that there may be circumstances where an individual sells a property which was a main residence and then experiences a delay before purchasing a new main residence. Where an individual is replacing a main residence, the higher rates of Stamp Duty Land Tax should not apply to the purchase of a new main residence within 36 months of the disposal of a previous main residence. In addition to this, the 36 month time period will commence from 25 November 2015 for those who had sold a previous main residence prior to the Spending Review and Autumn Statement 2015, in order to provide additional transitional support.”

Economic secretary Harriet Baldwin gave a speech on the Financial Advice Market Review. Ms Baldwin confirm that the Money Advice Service would be replaced with “a new, slimmed down money guidance body that will identify gaps in the financial guidance market, and commission targeted debt advice, money guidance and financial capability projects to fill these gaps.”. She went on to say that the new body will have no brand and will not engage in direct delivery. “Instead it will focus purely on commissioning services and will seek significant input from the financial services sector. Money will no longer be spent on marketing “.

In a critical report, the National Audit Office has concluded that the Department of Energy and Climate Change’s Green Deal has not achieved value for money. Amyas Morse, head of the National Audit Office, said: “In practice, [the government’s] Green Deal design not only failed to deliver any meaningful benefit, it increased suppliers’ costs – and therefore energy bills – in meeting their obligations through the ECO scheme. The Department now needs to be more realistic about consumers’ and suppliers’ motivations when designing schemes in future to ensure it achieves its aims.”

In Europe, the European Parliament approved new EU data protection rules which aim to give citizens control over their personal data and create a high level of EU-wide data protection. Provisions included in the new rules including a strengthened “right to be forgotton”, “clear and affirmative consent” to the processing of private data by the person concerned, and the right to transfer data to another service provider. The new rules will need to be adopted in all member states by 2018.

On 5 May Londoners will go to the polls to elect a new mayor. I have put together a table of housing pledges taken from the manifestos of the main candidates.