Contribution
My Lords, I start by reminding your Lordships of my declaration of interest: I am a vice-president of London Councils and a co-owner of a rental property in Bexley.
I congratulate my noble friend Lady Eaton on securing this debate. It is an important subject, and I know she feels as passionately about it as I do. We recently had some conversations about home ownership as part of the Social Housing Bill debate. I hope that this debate will allow expansion of that discussion, especially around the value of right to buy and the potential of the shared ownership model.
Contrary to some of the comments from the Government, we should recognise that right to buy council properties gave opportunity to many who would not otherwise have had that chance. Many were on low incomes. It afforded them the aspiration to be a home owner. Ownership did not go without benefits to their communities and, contrary to what is often suggested, the majority of tenants who bought continued to live in those properties and raise their families. If they had not bought under the scheme, they would likely have remained council tenants.
It was noticeable that one of the first things that many of them did was to install a new front door. I am sure that most of us saw that when we were out canvassing. I do not know why that was so important, but it seemed to be the first action that most former tenants did when they transferred to being a home owner. As my noble friend Lady Seccombe said, the sense of pride in those who bought through right to buy did not stop there. They got more involved in their surroundings and their community. That benefited others, as well as what was happening within their property.
There were other benefits as well. Research says that the children of people who bought under right to buy did better in schools. I am sure that my noble friend Lord Jamieson will remind the House that receipts could be used to build additional social housing. Ownership through right to buy benefited many people and it is such a shame that the Government are looking to water it down.
Moving on to shared ownership, as we discussed during the Social Housing Bill, shared ownership can also allow some to get a foot on the property ladder who would not do so otherwise. This often includes the key workers whom we all depend on to run our vital services on a daily basis. However, as we heard during the social housing debate, there can be issues with the current offer around service charges, legal costs and sales. I thank the Government for agreeing to a review and hope that any change brought forward through that review will make the offer more attractive to potential purchasers.
Right to buy and shared ownership can help people who want to buy their own home. However, for the vast majority of those who are looking to buy, there are many other barriers, some of which have already been identified. The first, of course, is affordability. The average cost of buying a property now is out of the reach of many, and the multiple of salary, size of deposit or length of mortgage can be eye-watering. Many cannot access the bank of mum and dad, and the cost of private rental often means that they are unable to save the required deposit.
Often, the cost of private rental is higher than a mortgage payment might be. The previous Conservative Government’s help-to-buy scheme and saving schemes helped many first-time buyers. There is now a gap in that support. The Minister did say that conversations were being held with banks and building societies to come up with some more attractive products. Maybe she can share some of that information with us this afternoon.
Stamp duty is another barrier—one reason why our party is promising to look at that and take action. It is not only expensive but can stop people accessing the housing market. They might not buy that starter flat with a view to moving into a bigger home, or it might discourage those considering downsizing, thereby freeing up valuable family accommodation.
Another barrier to home ownership is availability of the right type of properties, whether that be starter homes, flats and apartments for those commuting, student accommodation, family accommodation, supported living or properties for those wishing to downsize. While it is important to build, it is also vital to consider the types of homes that are being built to ensure that need is met. It is also worth considering the knock-on impact to other public sector services if that does not happen.
Nobody is suggesting that home ownership is right for everyone or that it is the only type of accommodation, but we should definitely recognise the benefits it can bring.