Lords frustrated at lack of detail on Starter Homes
Week in Westminster
Published: 4 March 2016 | Author: Michelle Vosper
Peers continued their line by line scrutiny of the Housing and Planning Bill this week. Slow progress was made over the clauses relating to the Starter Homes scheme on which the Lords had a huge number of questions and concerns, most of which were unable to be answered. On Tuesday the Lords committee considered amendments to extend the duty to promote Starter Homes to other forms of home ownership. On Thursday, amendments attempted to restrict the eligibility criteria, for example imposing income caps, limiting availability to local people, restricting the scheme to those purchasing with a mortgage, and for the purposes of someone’s principle residence, and flexibility on the age cap. Peers also debate amendments concerning the five year 20% discount period. Many concerns were raised about the schemes impact on the market, how Starter Homes would be valued, and the danger of the scheme being able to be gamed. Peers expressed their frustration at the lack of detail available in the Bill and argued that it should be delayed until draft regulations are available. The minister suggested that the government would be publishing a consultation on the scheme in the “next few weeks”, and that the subsequent regulations would be laid under the affirmative resolution procedure.
The Lord Economic Affairs committee held an evidence session with the CML and Lloyds Bank in respect of their inquiry into the economics of the housing market. Questions asked during the meeting covered lending to SME bulders and for custom and self build; the outlook for mortgage market; the impact of government initiatives, the buy to let sector on the first-time buyer market, and the mortgage market review; how better use can be made of existing housing stock; and how housing affordability can be improved.
Over 780,000 homebuyers have saved an estimated £657 million on stamp duty in the year since the tax was reformed from a “slab” to a “slice” structure, according to the Treasury.
The Institute of Economic Affairs published a briefing paper identifying the causes of the housing crisis and suggesting solutions. It recommends that tax changes, such as fiscal devolution, would strengthen incentives to permit development by ensuring that local authorities gain from it.
A new report from Policy Exchange argues that policies should aim to embed energy efficiency into the housing market and house prices. It proposes that stamp duty should be linked to energy performance, mortgage affordability tests should better reflect the energy efficiency of a property, and lenders should be encouraged to offer energy efficiency mortgages.