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What is a starter home?

Part of Housing and Planning Bill – in the House of Commons at 7:15 pm on 3rd May 2016.

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Photo of Dawn Butler Dawn Butler Labour, Brent Central 7:15 pm, 3rd May 2016

I will not give way now as I want to get into my stride.

My hon. Friend Ms Buck and I were in the Members’ Tea Room not long ago exchanging really sad stories about our constituents. It was heartbreaking for us to share those housing stories. More than anyone else on the Opposition Benches, we need to ensure that the Bill is right for our constituents in London.

At the moment, the Bill is a disaster for London. It redefines affordable housing to include starter homes, the price cap for which, at the moment, is set at £450,000. I will explain how that affects my constituents in Brent Central. Twenty per cent. of £450,000 is £90,000, which brings the rough cost of starter homes in Brent down to £360,000. If a mortgage for £360,000 with an interest rate of 3.92% is to be repaid over 25 years, that means a payment of £1,884 per month. The median household income in Brent is £31,601, and an individual earning that amount will bring home £2,054.66 a month after tax. That means that the average person in my constituency would have to spend 91.6% of their entire average income on mortgage repayments, which is most definitely not affordable. The independent housing charity Shelter estimates—we have heard this before—that Londoners need £77,000 a year to afford a starter home. The Bill hits London councils the hardest, and essentially hollows out the capital.

The Lords amended the Bill to guarantee that when council homes are sold, local authorities will be able to replace them with new homes for social rent in local areas—for doctors, nurses, teachers, and everyone who is working and earning an average wage in London. That puts into practice the principle behind the amendment tabled last year by my right hon. Friend the Member for Tooting. The Khan amendment set out that if a home for social rent is sold off, it must be replaced by a new home for rent in the same area. That is important, because otherwise we are socially cleansing people out of a certain area, which is wrong. We have heard the arguments many times, and sometimes speeches from Government Members sound very muddled. We need to trust local authorities to know their need when it comes to providing housing for the local area.

All Members must support that principle if they are serious about protecting London’s great mix of people across our city. We need to protect the doctors, the nurses, the teachers, the shop workers and the cleaners to make sure that we have the diverse London that won us the Olympics of which we are so proud.

I will not speak for much longer, but I want to say that selling off high-value council homes makes no sense. In Brent, it will mean that we sell off more than 70 family homes a year. Are we saying that people should not have large families? Thank the Lord, I say, with regard to the Lords amendments; I hope that the Minister and Conservative Members will accept them.