The governent has been defeated in the House of Lords over plans to offer ‘affordable’ homes to first time buyers at a 20 per cent discount.
Labour, Liberal Democrat and cross-bench peers have voted to moderate the plans, which would mean that one in five properties in new developments must be available for first time buyers under 40 years old at a 20 per cent discount.
The plans were a flagship scheme proposed by the Conservative Party during the 2015 election, but critics have said that they disproportionately favour middle or higher income earners and questioned whether they can be classed as ‘affordable’.
Peers have backed an amendment that requires the repayment of the 20 per cent discount on a sliding scale if the property is sold within the first 20 years of ownership, which they claims will help to moderate the generosity and reduce potential resentment among new buyers who will not benefit.
The amendment was tabled by cross-bench peer Lord Best and will reduce the 20 per cent discount by five per cent for each year of occupation.
Best said: “It gets to the heart of the fundamental problem with this bill – namely the introduction of measures to generously subsidise home ownership schemes – with the subsidies being found by a transfer of public resources away from low-cost rented homes for less affluent households.”
In response, Housing Minister Brandon Lewis said the government would reflect on the concerns put forward, but stressed that it was still committed to the starter homes policy.
He said: “The housing bill will increase housing supply alongside home ownership and we are doing this with the biggest housebuilding programme since the 1970s to deliver the homes our country needs.
“The government believes it is wrong that a 30-year-old couple’s aspirations should be thwarted by having to wait until they are 50 to benefit from the full value of their starter home.
“We will listen carefully to the points made in the debate but our manifesto commitment to introduce starter homes at a 20 per cent discount for first-time buyers is unwavering.”
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