Week in Westminster
Published: 16 October 2015 | Author: Michelle Vosper
The Housing and Planning Bill was presented to Parliament this week. The Bill includes provisions on:
- New affordable starter homes - a new legal duty will be placed on councils to guarantee the provision of 200,000 Starter Homes on all reasonably sized new development sites; these will be offered to first-time buyers at a 20% discount on market prices
- Local plans - providing the government with targeted powers to ensure that all councils get local plans in place by 2017, so they can help provide the homes their communities need
- Pay to stay - ensuring that those tenants on higher incomes who are living in social housing have a rent that reflects their ability to pay, while those who genuinely need support continue to receive it
- Automatic planning permission in principle on brownfield sites - to bring forward more land to build new homes quicker, while protecting the green belt
- Planning reforms to support small builders - placing a new duty on councils to help allocate land so 20,000 custom and self-built homes a year can be built by 2020
- Measures to tackle rogue landlords - giving councils the power to blacklist, and in extreme cases ban those who don’t abide by the law, while helping decent landlords recover abandoned homes quicker
- Ensuring high value assets are managed effectively - ensuring the sale of high value council assets that can be used to support people into home ownership
The publication of the Bill came days after the government announced that an agreement had been reached with the National Housing Federation to extend the right to buy to housing association tenants from next year. The agreement means that the Bill does not include provisions to give statutory effect to the policy. The government will be working with the sector directly on the implementation of the deal.
Following this announcement, the shadow housing minister John Healey moved an urgent question asking the government to explain the details of this “voluntary” agreement and how it differs from the originally intended statutory approach. A short debate on this subject also took place in the House of Lords.
The Welfare and Reform and Work Bill continued its committee stage this week. MPs debated the clauses in the Bill that will convert support for mortgage interest (SMI) into a loan. There was much discussion around reverting back to a 39 week waiting period (from the current 13 weeks) before claimants are able to receive an SMI loan. An amendment tabled by Labour MP Emily Thornberry attempted to keep the waiting period at 13 weeks:
“Towards the end of Tuesday’s sitting, we began to air some of the arguments about waiting periods… Reversing the process by reverting to a 39-week waiting period is counterintuitive and likely to be counterproductive. It seems likely to increase the probability of homeowners facing repossession and homelessness when they fall on hard times… The Government have not been able to provide any reassurance that there is a robust evidence base or, indeed, any evidence base at all for the contention that the charge will not risk an increase in homelessness. The best that the Minister could do on Tuesday was to tell us:
“The Council of Mortgage Lenders has not said that the 39-week wait will drive repossessions. That is an eminently respected organisation, and it would have said if it felt that was the case.”
“I was interested and frankly surprised to hear that, and thought perhaps I had misheard it. I gave the Minister the benefit of the doubt at the time, but I am afraid I do not now. I wondered if the Council of Mortgage Lenders had looked into this in a bit more depth than the Government, so I went back and looked over its submission to the Committee. Imagine my surprise when I found that the view it had expressed on the waiting period was the exact opposite of what the Minister told us!”
Responding, the minister Shailesh Vara said: “…Although the CML has definitely said that it believes that the 39-week waiting period will drive repossessions, they are unable to quantify numbers of repossessions. We will continue to work with the CML to assess any such impact in terms of repossessions but we do not believe that these will be significant.“ The amendment was subsequently withdrawn.
Housing issues were raised by Labour leader Jeremy Corbyn during prime minister’s questions. The first on whether the prime minister believes that “£450,000 is an affordable price for a new home to someone on an average income to try to aspire to” and whether he will address “the problem that local authorities face in accessing funds to undertake the necessary and essential building of council housing”. Mr Cameron ran through the various housing initiatives that have been and will be implemented by the government.
The Scottish government has launched a new investment vehicle to provide 1,000 affordable homes for rent across Scotland. The Local Affordable Rented Housing Trust is a Scottish charity set up to provide long term mid-market rented housing across Scotland. It is funded by a £55 million loan from the Scottish government, with matching private investment expected to lift overall funding to over £100 million.
And finally, we published the latest issue of our parliamentary newsletter, Housing finance at a glance. It covers market activity, both the Housing and Planning Bill and the Welfare Reform and Work Bill; the future of the buy-to-let market; and two CML initiatives on the transparency of mortgage fees and charges, and retirement borrowing.