My Lords, the noble Lord, Lord Taylor, said graciously that there has been a sea change in Government policy towards housing in the past year or so that recognises that there is obviously a severe problem in London and the south-east in particular, but also in other parts of the country. In debates on housing, we have heard occasionally from the noble Lord on the Liberal Democrat Benches about the different perspective of Pendle in the north-west, but broadly speaking it is recognised that there is a real crisis in housing throughout almost all the country. The Government should be congratulated on this imaginative proposal. I do not suppose that anyone will want to stop it going through in its broad shape, given that it has gone through the other place, but we are here to improve things and I think this proposal can be improved.
As the noble Lord, Lord Best, pointed out in his speech moving Amendment 1, it is a very expensive proposal that will cost £8.6 billion if it achieves the full panoply of 200,000 results. That is a lot of money. Even though some of it is offset, it is offset in ways which housing experts rather deplore. For example, less Section 106 affordable housing will be built if this development goes ahead. As the noble Lord, Lord Taylor, pointed out, there will be fewer Build to Rent proposals, which is one of the most imaginative things on the housing horizon. I also get the impression from talking to housing associations that they are concerned about the shared equity homes into which they have put a lot of money, and which are fully supported by Government grant. Those are just three areas that may well be adversely affected by so much emphasis on starter homes.
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The question therefore arises which the noble Lord, Lord Best, put rather well: can we somehow take the pressure off the situation by creating a slightly less favourable position for those taking on starter homes? His suggested method of, in effect, people paying back for the advantage they get is entirely sensible, and it does not necessarily mean locking a person into a home for 20 years. As I understand it, a discount of 1% could be paid back if they move after one year, or 5% after five years. The full 20% would be paid back after 20 years. People obviously move over a period of time so it seems to me, as an economist, that this has some sense. People who have the magnificent benefit of a 20% discount on their home acquisition will—after a period, obviously—pay back in a steady flow. There will be a steady flow of cash coming into the Treasury and the department that can be used for other housing purposes. Therefore, there is some sort of quid pro quo for all that the Government are laying out in this sensible way.
On the other hand, I hope the noble Lord, Lord Taylor, will forgive me for saying that I do not understand how his proposed discount in perpetuity would work. If you have in perpetuity two different classes of housing, eventually the market will somehow arbitrate between houses that do not have a discount and houses that do. Eventually, someone—an estate agent—will say, “Well, if you want this other more attractive one you can buy it but, of course, it will cost a bit more, even if we head it as ‘furniture and fittings’, or whatever”. There will be a means of the market arbitrating between the two and the advantage will eventually disappear. Although I understand the idea behind Amendment 5, it is impracticable so it should not be supported. However, because Amendment 1 would bring in a flow of cash to the housing market, that seems to have a great deal of merit.