Brandon Lewis, the minister for housing and planning, joined Financial Times for a live online Q&A on Wednesday. Readers submitted more than 100 thoughtful questions. Here are 10 of the best, with his responses:
Q: Would the government be happy to see house prices fall?
Brandon Lewis: House prices reflect the entire housing market in which new build is only about 6 per cent (which can vary year to year). When we buy our homes we make the largest equity investment we are likely to make in our lifetimes, and hence having confidence in that equity value is human nature.
Our role is to ensure we have new housing supply coming into the market at prices people can afford. That is where Help to Buy, Starter Homes and shared ownership are key, as well as an overall increase in supply. That is why it was good to see the 25 per cent rise in supply last year.
Q: Why does the government want to cut down on landlords and how much do you think the recent measures against them (cuts to mortgage tax relief, etc) will reduce the number of buy-to-let owners?
BL: We do not. I believe the private rental sector is an important part of the housing sector.
The changes create a fairer system, where buy-to-let investors do not have as much advantage over owner-occupiers (who will not have 0 per cent mortgages or the mortgage tax relief that buy-to-let had) plus institutional investment will be able to continue to grow and I fully support the professionalisation of the sector as it grows with more institutional investment.
Q: I’d love to see greater penalties for rogue landlords. Specifically, I would like there to be a publicly available database of landlords who have been successfully prosecuted for housing-related offences. Can you please tell me why such a database does not exist and why it is so difficult to find out if one is about to rent from a rogue landlord?
BL: Our housing and planning bill currently in the House of Lords will introduce bigger fines and banning orders as part of the biggest crackdown on rogue landlords by any government ever. And we will introduce a database of rogue landlords.
Q: Why isn’t the government doing more to help older people to downsize with, for example, a stamp duty holiday for downsizers?
BL: The chancellor made changes to stamp duty in the Autumn Statement 2014 which have just come into effect, which will help. In the 2015 Autumn Statement we also outlined the biggest building programme since the 1970s, which includes delivering more homes for older people as well.
There is an opportunity for the sector, as our population age increases, to be delivering more homes specifically aimed at this market.
Q: The fundamental cause of the 2007-08 financial crisis was misallocation of credit into housing and consumption rather than investment in productive economic activity. How are the current policies of this government any different?
BL: We are focused on rebuilding supply. In 2010 we inherited from Labour the lowest level of housebuilding since the 1920s — it was as low as 88,000 [a year] — and we have got the sector building again, though I agree we want to see even more growth in supply.
We need to be very focused on continuing the work we have done to see supply continue to grow, having now got up to over 180,000 last year. We also now have a very different regulatory structure that includes stress testing and other measures by the Bank of England that simply were not here pre the crash.
Q: To what extent do you think house price inflation in London is hindering social mobility?
BL: The government understands the big challenge the mayor faces on housing supply in London and the impact of high house prices on Londoners.
That’s why through the Housing and Planning bill we will give the mayor of London greater say on guiding development in the capital.
There are a number of housing options available in London. We have introduced London Help to Buy, which doubles the loan from government to 40 per cent. And there’s shared ownership. We estimate that a new shared owner in London could buy a 25 per cent share of a one-bedroom flat with a 5 per cent deposit of less than £4,000. A great opportunity to get into home ownership.
And we have also raised the income cap for shared ownership to £90,000 in London (and £80,000 outside London). This will allow 175,000 more households in private rented accommodation to have access to shared ownership.
Q: We live in a village in East Devon. We have a school, church, post office, shop and new village hall, but everything is dying because we are not allowed new housing. People would love to live in the villages but planners say the villages are unsustainable. What can be done to prevent the death of our rural communities?
BL: In preparing their local plan, East Devon Council will have assessed the development needs for their areas and identified appropriate sites for development to meet this need.
We believe that meeting the housing needs of rural communities is important — over 85,000 affordable homes have been provided in rural local authorities in England between April 2010 and March 2015.
Local authorities should plan to reflect local needs, particularly for affordable housing, including through rural exception sites.
We work closely with Defra [the environment, food and rural affairs department] to develop housing policies which take account of the potential impact on rural communities, and to rural proof future housing policy.
Q: Why doesn’t the government just build loads of high-quality housing?
BL: The government is piloting direct commissioning of house building on publicly owned land. Across the country, £104m will be invested in pilot sites which will deliver up to 13,000 homes. Forty per cent of the homes will be Starter Homes. Back in January, the prime minister announced the first five pilot sites: Connaught Barracks in Dover, Northstowe in Cambridgeshire, Lower Graylingwell in Chichester, Daedelus on Waterfront in Gosport, plus Old Oak Common in north-west London.
Q: Mr Lewis, I have been a housing association tenant since 1996. Will I have the automatic right to buy when the housing and planning bill becomes law? My property is in a desirable part of London in Zone 2.
I am worried that the housing association may want to hold on to this property. How will housing associations decide which properties are for sale? If I am a high-income earner, might that affect whether I can buy or not?
BL: We have been clear, again in our manifesto, that we wish to extend the right to buy to social rent tenants in housing associations. Our historic agreement with the sector means we have achieved this in a voluntary deal.
The bill facilitates the implementation of the right to buy extension, although we are already running five pilot areas, including some in London. The findings from those pilots will help define the process through which we roll the scheme out to everyone as we move forward.
The high income status makes no difference to somebody’s right to use right to buy.
Q: Why does the government allow homeowners to sell their houses and pay no capital gains tax? [via email]
BL: We have halved the time a property can sit empty before capital gains tax is due, and we have tightened the rules about buying residential property through a company.
Additionally, we will support families buying their own home through a three percentage point surcharge on rates of stamp duty land tax on purchases of additional properties, like buy-to-lets and second homes.
SOURCE: FinancialTimes.co.uk
