MPs insist on starter homes requirement and resist neighbourhood right of appeal as housing bill reaches final stage

The Bill entered the final phase of its journey through UK parliament last week, with the last points of disagreement between the House of Commons and the House of Lords being considered through the 'parliamentary ping pong' process.

The final area of disagreement on the Bill at the time of writing concerned proposals to force local planning authorities to sell higher value council homes to fund the right for housing association tenants to buy their homes. The House of Commons twice rejected amendments to the Bill that sought to enable local councils with demonstrable needs to retain money from the sale of vacant housing stock for reinvestment in new affordable homes and homes for social rent, but the Lords voted narrowly to introduce a third amendment which would have a similar effect.

The latest proposed amendment would alter a section of the Bill that allows the communities secretary to agree to reduce the vacant housing payment requested from a council. The new amendment would ensure that any reduction agreed is sufficient to allow each home sold to be replaced by at least one new affordable home outside Greater London and at least two within Greater London. It would also force the communities secretary to consider requests to fund homes for social rent where a council can demonstrate particular need.

Both houses agreed to an amendment that will ensure that rural exceptions sites are exempt from any requirement to deliver starter homes set by the communities secretary. However, attempts by the House of Lords to give local authorities the final say on the mix of affordable homes in their area were rejected by MPs.

Peers initially put forward an amendment removing a proposed power for the communities secretary to prevent planning permission where the starter homes requirement was not met, and replacing it with a duty for councils to "have regard to the provision of starter homes based on [their] own assessment of local housing need and viability" when deciding residential planning applications.

When its initial amendment was disagreed last week, the House of Lords suggested a new clause allowing councils to meet the starter homes requirement by delivering alternative forms of affordable home ownership if they could demonstrate a need. The House of Commons voted on Monday to reject the new amendment. Housing and planning minister Brandon Lewis said the amendment would "totally undermine [the Conservatives Party's] manifesto commitment to build 200,000 starter homes by 2020". Peers agreed yesterday not to insist on its inclusion in the Bill.

A provision that would have required buyers of starter homes to repay a tapered proportion of the starter homes discount if they resold their home within 20 years has been removed from the Bill. Peers agreed last week to accept instead an amendment allowing repayments or restrictions on resale to be set by regulations.

The new amendment will enable regulations to impose restrictions: requiring repayment in respect of the starter homes discount, reduced according to the time that has expired since a home was first sold; or preventing a starter home being sold within a specified period other than to a qualifying first-time buyer at a discount.

Proposals to introduce a right for neighbourhood groups to appeal against planning permissions that contradict neighbourhood plan policies were rejected twice by the House of Commons. Peers accepted instead a Commons amendment requiring only that local authority reports recommending the grant of planning permission to explain how neighbourhood development plans have been taken into account and identify any points of conflict between the plan and the recommendation.

A clause that would have allowed councils to require affordable housing to be delivered on small sites and rural sites was also removed from the Bill after being rejected by the House of Commons.

Changes to proposals to make 'high-income' council tenants pay increased rent were dropped by the House of Lords last week after being refused by MPs. Peers had attempted to change the Bill to give local planning authorities discretion about whether to increase rents for high-income tenants; to introduce minimum thresholds for the level of household income above which tenants will be considered to be 'high-income'; to ensure thresholds were increased in future; and to limit any uplift in rent charged to such tenants.

The House of Commons twice voted to refuse a proposal to require all new homes meet the carbon compliance standard by April 2018 because it "could slow down or prevent the development of new homes. An amendment that would have required sustainable drainage systems (SUDS) to be designed in accordance with technical standards and the relevant permissions was also rejected as "unnecessary and impractical". Commitments for the communities secretary to review minimum energy performance requirements and legislation and policy relating to SUDS in England were accepted by the Lords as an alternative.

Planning expert Jo Miles of Pinsent Masons, the law firm behind Out-Law.com said: "With a clear Conservative majority in the House of Commons, it has been left to the House of Lords to give a voice to critiques of the Housing and Planning Bill. The government’s flagship ‘starter homes’ proposal is the most hotly contested, with significant concerns having been expressed across the political spectrum that this new form of tenure will squeeze out affordable rent and shared ownership products."

"Public sector veteran Lord Bob Kerslake has been particularly vocal, having tabled amendments to the Bill last month to give local planning authorities discretion to determine the proportion of starter homes in any particular development," said Miles. " Faced with the rejection of that amendment by the Commons, the Lords tried again - this time seeking a power for local authorities to meet part or all of any centrally imposed starter homes requirement through the delivery of alternative forms of affordable home ownership, such as shared ownership."

"This has again been rejected by the Commons on the ground that it would undermine the delivery of starter homes," she said. "It remains to be seen how long the ping pong over amendments to the Bill between the two Houses will continue, but convention would suggest that if further concessions from the Commons seem unlikely, the Lords will eventually back down having made their point."