Member

Focusing now on the exemptions in relation to newly built social homes, I am grateful to the noble Baroness, Lady O’Neill, for this probing amendment on the length of the exemption period. Our starting point is that any exemption period should reflect the time it takes for rental income to repay the costs of building a home. This payback period is generally between 30 and 50 years, depending on the viability of the site, and of course that will vary around the country. We therefore concluded that a 35-year exemption strikes the right balance: it ensures that councils are not losing homes prematurely while maintaining a route to home ownership for tenants over the longer term. Reducing that period to 15 years would not provide sufficient protection for a council’s investment and would risk undermining confidence to build, which is central to the objectives of these reforms. For these reasons, the Government cannot accept this amendment.