My Lords, our definition of affordable housing for planning purposes is set out in annexe 2 to the National Planning Policy Framework. We recently consulted on our proposals for specific changes to national planning policy, including broadening the definition of affordable housing, to expand the range of low-cost housing opportunities for those aspiring to own their new home.
My Lords, I thank the Minister for her reply, but can she explain to the House why it is that the Government persist in defining homes, including starter homes, as affordable when they are clearly unaffordable to very large numbers of households on medium and low incomes?
My Lords, affordable homes are 20% below market values, and our new starter homes, as I have recently demonstrated in the Chamber, will cost about £145,000 outside London, so will be well within the affordability range for many first-time buyers, but there is a range of other products for people to purchase, should they wish, such as shared ownership schemes.
My Lords, I received a phone call yesterday from the son of a friend who is 48 and lives with his partner and their nine year-old child in a council flat in Hackney. He supports his 15 year-old son from a previous marriage, who also spends time with the family. The rent is £780 a month. The rent for an equivalent private rented accommodation is in the region of £2,500 a month. A single-bedroom flat costs £300 a week to rent. The combined income of the household is £45,000 a year—above the pay-to-stay level in London. Does the Minister regard the rents I have cited for those other properties as affordable? If not, what assurance can she give that this family and thousands like it up and down the country will be able to afford to continue to live in their present accommodation?
My Lords, we have spoken at length about London and the variability of house prices between and even within different authorities. The noble Lord is not wrong when he says that rents are high in some places in London but, as I pointed out, a number of different products are available, including shared ownership, which may for the first time make the housing market accessible to those who previously were unable to afford it.
My Lords, a recent survey by the Town and Country Planning Association found that only 7% of local authorities believe that starter homes would address their need for affordable housing. Not only that, Her Majesty’s Government are going to require local authorities to build these homes, often at the expense of more sustainable forms of affordable housing, regardless of local needs. Will the Minister say how this fits with the Government’s localism agenda?
My Lords, it is not just starter homes. Through the spending review there will be a range of homes of different types of tenures that will be available at each price point to suit a number of different types of first-time buyer or renter.
My Lords, is it not interesting to consider that this is how Britain spends 87% of the money that banks lend? That is one reason the market is so overheated. What are we going to do to reduce the heat? In Germany, only 20% of the money lent by banks goes on housing. This is a ridiculous situation and we have to address it.
My Lords, we have had lots of differences in this House over housing and the different types of housing we are going to provide, but one thing that all noble Lords agree on is that we need to increase the supply of housing in order to make it affordable. That is the way forward for the future. This Government are committed to delivering one million homes by 2021.
My Lords, the noble Lord, Lord Shipley, has raised a very interesting point. It has been on my mind for quite a considerable time, with grandchildren growing up and so forth. The situation is very difficult, there is no doubt about that. Where I and many in this Chamber are from—thankfully—in the valleys of south Wales, an affordable, detached house is about £80,000. Where I live, in Hertfordshire, a similar house costs £600,000 and people are extremely concerned about this for the future for their children and their families.
My Lords, I am not sure what the question was, but I think it was around affordability in different parts of the country. The noble Lord is not wrong at all: you could fit my flat in London into my front room up in Manchester. That is the whole point: the Government are absolutely determined to build more homes of different types of tenure for people.
The noble Baroness and I have had many discussions on this and they are both for rent and to buy. Whether products or homes—they are homes—different types of funding mechanisms and options are available, from affordable homes to rent and starter homes to shared ownership. There are quite a few options, and we have spoken about them in the past.