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What is a starter home?

Part of Housing and Planning Bill – in the House of Commons at 7:00 pm on 3rd May 2016.

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Photo of Karen Buck Karen Buck Labour, Westminster North 7:00 pm, 3rd May 2016

No, I do not welcome that at all. As we heard in the superb speech from the Front Bench by my hon. Friend Dr Blackman-Woods, we do not know what tenure those homes will have or where they will go. We have no guarantees whatsoever that they will be local. Therefore, they will simply not provide an equivalent level of accommodation or meet need. I cannot remember who said this, but that could result in rental properties for low-income households in inner London being sold to subsidise homes for sale somewhere else, thereby meeting a totally different kind of need.

Westminster City Council also points out—this has not been brought up this evening—that, in order to deliver the two-for-one requirement, the increase in housing delivery would have to be dramatically increased from its current rate, but there is no indication of how that will be achieved. The council has a long list of asks as to how the high-value sales programme will be organised and how inner-London authorities, including itself, would be protected. The Minister has given no answers whatsoever.

The council has also provided further context and it is interesting, given some of our discussions about pay to stay. Government Members describe anybody with a household income of £40,000 as rich, and the council has pointed out that the Government are imposing a higher pay-to-stay requirement on such households while at the same time cutting rents. They are cutting rents for everybody, including working households. People are being asked to pay a higher rent if they have a household income of £40,000, but they get a 1% cut in their rent at the same time. I simply do not understand the logic of that.

In my local authority, the implications are a loss to the housing revenue account of £32 million over the next four years and £237 million over the next 30 years, which will mean, as the local authority says, major cuts to the quality of existing properties or plans for new affordable house building. Yet again, the Government are giving with one hand and taking away with the other—indeed, they are taking away with a third hand, in this case—the capacity to provide additional homes. All that can be fairly summarised as meaning that the council that gave us homes for votes in the 1980s—the biggest scandal in modern local government history—is saying, “Even we do not like this.”

The council does not like the Government’s proposed starter homes policy either. The consultant who advised the council on the Housing and Planning Bill pointed out that a starter home capped at £450,000 in inner London, where the average open market property is going for £2 million, lavishes a gain on a particular small cohort of first-time buyers. Westminster Council states that

“the potential tax-free capital gain, after eight years of occupation…is very considerable (depending on the number of bedrooms) and wholly to the benefit of a first-time buyer”.