Changing the planning landscape…Starter Homes

30 / 06 / 2016

The love affair with changing the planning system as the panacea for solving the housing crisis is in full swing. The Government has now succeeded in forcing through parliament what may prove to be one of the most fundamental changes to housing delivery in modern times. A valiant attempt was made by the House of Lords, spear-headed by Lord Kerslake, to challenge what will be a fundamental shake up of social housing as we have come to know it.

A housing crusade and a move from ‘generation rent’ to ‘generation buy’ was a core manifesto commitment of the Conservative government.  Surveys suggested more than 60% of those renting privately wanted to buy their own homes and the affordability of homes was often the sole reason they did not buy.  Starter Homes was heralded as the answer.

Starter Homes will be new build homes offered at 20% market discount for first-time purchasers under the age of 40 (price restrictions of £450,000 in London and £250,000 elsewhere).  With average house prices in London now standing at over £500,000 it is difficult to gauge the enthusiasm with which new housebuilders will embrace this change (absent the various funds established to promote take-up).

There are however reasons to be hopeful: the price caps can be reviewed by the Secretary of State and may therefore be able to keep tabs on market factors.  In addition to this much of the detail is to be brought through regulation and if the various government manifestos and consultation documents are followed through, allowing for the policies listed below, we may see a significant increase in house building:

  • The Starter Homes requirement will place a duty on local authorities to promote them.  I can see the potential for developers to argue that the traditional forms of affordable housing cannot be provided if Starter Homes are included in the scheme and some Councils may be agreeable to such proposals without necessarily going through protracted viability discussions;
  • Starter Homes exception sites, if introduced could allow the conversion of commercial/retail and industrial land to be used for housing.  While requiring Starter Homes they would remove requirements for other forms of affordable housing, an obvious win for house builders;
  • The Secretary of State could issue a non-conforming statement which effectively overrides local plan policies which do not contain a requirement to promote Starter Homes.  Given how long it takes to change development plan policies, I can see significant opportunities for housebuilders to promote Starter Homes schemes now to benefit from the inevitable policy vacuums;
  • Green Belt, brownfield land development will be more acceptable for housing with Starter Homes.

The Government’s pledge to deliver 200,000 Starter Homes by 2020 is something which it will want to see delivered upon and there may be significant opportunities to capitalise on them over the next few years.