Wednesday, 9 March 2016

Newspaper column 9th March 2016 - The Housing and Planning Bill

Recently the Housing and Planning Bill passed through the Commons. A number of concerns have been raised about the impacts of this Bill, particularly here in Cornwall.  While I understand these concerns, I believe that the Bill represents significant steps towards the goal of increasing home ownership.

Eighty six per cent of people who currently do not own their own home would like the opportunity to do so, and I support this, especially for young people.  The Conservative Government wants to “turn Generation Rent into Generation Buy”.

This process will not be easy.  Cornwall faces unique housing issues; there is a severe housing shortage in the county, the average wage is below the national average, while average house prices are driven higher by second homeowners and retirees.  These factors put home ownership out of the reach of many local families.

We need to work to address each of these issues.  There is a clear need for more housing in Cornwall but any new development has to be in the right location and supported by investment in jobs and infrastructure.  We will start to see average wages rise in Cornwall as the new National Living Wage takes affect and also as we work to create higher paying, higher-skilled jobs. 

The Starter Home provisions of the Housing and Planning Bill are designed to address the issue of house prices.   Starter Homes will be made available to first time buyers under the age of 40 and will be classed as affordable homes.  The Starter Homes will attract a discount of 20%.  Along with the Help to Buy scheme, where the Government provide an interest free loan of up to 20% of the purchase price as a deposit, I believe that this provision will put houses within the reach of many more families. 

New homes valued at or below £250,000 will be available under the Starter Home scheme.  But this price is the upper limit and I expect to see new homes in Cornwall significantly lower than this limit, again helping to make homes affordable.

The current system for local affordable homes for purchase is fraught with issues.  When a homeowner of an affordable home is ready to move on, they must first find a buyer who qualifies under the affordable home rules and has a local residency qualification.  This severely limits the market.  Once a suitable buyer is found, Cornwall Council processes part of the paperwork, a process that can take up to six months.  The affordable home system as it stands works to keep homeowners in the affordable house “trap”.

The Starter Home system will give first time buyers the opportunity to sell their homes onto the open market after five years of ownership.  Like the Right to Buy Scheme, the homeowner will enjoy the uplift in value after five years unencumbered by the residency rules.   I believe that these provisions will help to end the affordable home trap and put local families firmly on the property ladder.

The rental sector does not give people adequate security; many people live in poor quality homes with little security of tenure.  While there is a place for rented accommodation more people need to be given the chance to own their own home and I believe that this Bill helps us on that journey.

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