Multiple defeats for government on Starter Homes

The House of Lords voted to give local councils the power to set the threshold of Starter Homes locally and also passed an amendment to introduce a 20-year discount period for the product.

The government has pledged to build 200,000 Starter Homes by 2020, and announced in a consultation last month that it plans to force a 20% threshold in all housing schemes nationwide.

But an amendment, proposed by Peabody chair and former head of the civil service Lord Bob Kerslake, will instead allow councils to set the threshold locally based on an assessment of local need.

Presenting the amendment he said: “I have no doubt that a figure of 20% Starter Homes will be right for some parts of the country, but I am equally clear that for many, many other areas it will not. It is hard to think of a more overbearing and centralising action the government could have taken.”

Baroness Susan Williams, parliamentary under secretary of state at the Department for Communities and Local Government (DCLG), called for Lord Kerslake’s amendment to be withdrawn, claiming other forms of affordable housing could still be built through other means.

However, Lord Kerslake pushed it to a vote resulting in a heavy government defeat.

Earlier, peers also changed the bill to insert a period of 20 years where a chunk of the 20% discount must be repaid if the property is sold. The percentage repaid will be reduced by 5% each year.

Under the original proposal, buyers would have been allowed to sell the home at full value after five years, potentially meaning they could cash in on the discount.

The government’s consultation suggested this period could be extended to eight years, and Baroness Williams again called for the amendment to be withdrawn, claiming it would make it difficult for buyers to move.

However, when Lord Richard Best pushed the amendment to a vote, the government was comfortably defeated again.

Ministers were also forced to accept an amendment to exempt rural exception sites from Starter Homes requirements to avoid a third defeat.

The amended bill will return to the House of Commons for final reading following four days of report stage in the House of Lords this month. Ministers will have to decide whether to accept the Lords’ changes or reverse them, which could lead to parliamentary ‘ping-pong’ between the two chambers, slowing the bill down.

UPDATE: At 4.50pm on 11.4.2015

This story was updated from a shorter early version.