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Starter Homes: Manifesto Commitment

The Conservative Party's commitment to build 200,000 quality Starter Homes below market price for first-time buyers under 40.

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Starter Homes: Manifesto Commitment

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  1. Starter Homes: Manifesto Commitment We will build 200,000 Starter Homes and more affordable housing We will build 200,000 quality Starter Homes over the course of the next Parliament, reserved for first-time buyers under 40 and sold at 20 per cent below the market price. The Conservative Party Manifesto 2015, Page 52

  2. Rationale and demand • Home ownership declining: Proportion of homeowners under 40 in England has declined by over a third from 62% in 1993/4 to 39% in 2013/14 • First time buyer affordability declining: Average house price to earnings ratio for successful first time buyers in 2014 was 4.3, compared to 2.7 in 1993 • Strong preference for home ownership: 86% of people say want to own a home as it is a “good investment” (26%) and more secure than renting (23%) • Strong demand for Starter Homes: over 69,000 first time buyers have so far expressed an interest in Starter Homes on national demand ‘register’

  3. January 2016 • Additional £1.2bn fund to build 30,000 affordable ‘starter homes’ on underused brownfield land by 2020 • December 2015 • Consultation on changes to NPPF, incl. widening definition of affordable housing to include Starter Homes Background & milestones to date • March 2015 • New brownfield exception site policy • To be built on under-used or unviable commercial and industrial sites Starter Homes • November 2015 • Chancellor announces £2.3bn funding programme for Starter Homes • For first time buyers under 40 • 20% below market price, costing no more than £450,000 (London) & £250,000 (elsewhere) • 5 year resale and lettings restriction • Market product – assumption of no public subsidy • May 2015 • Manifesto Commitment to build 200,000 Starter Homes • October 2015 • PM announces intention to consult on wider Affordable Housing definition to include Starter Homes • First clause of Housing Bill - duty on councils to promote Starter Homes • July 2015 • Productivity Plan commits to: • stronger, wider exception policy • minimum % of Starter Homes on all ‘reasonably sized’ sites • August 2015 • Rural Productivity Plan: Starter Homes allowed on Rural Exception Sites • Announced £36m fund to kick start Starter Home development working with HCA, GLA & councils

  4. Starter Homes • Starter Homes exempt from Community Infrastructure Levy and s106 affordable housing contributions • Proposed changes to NPPF: • Expand ‘exception site’ policy to include other types of underused or unviable brownfield land – retail, leisure and institutional uses • Expand definition of affordable housing to include Starter Homes • Enable Neighbourhood Plans to designate land for Starter Homes • £2.3 billion funding to support delivery of up to 60,000 starter homes by 2020/21, to complement the planning reforms • Support implementation through Starter Homes Champions, Help to Buy agents

  5. Housing and Planning Bill – Starter Homes provisions • Bill progressing through Parliament- currently in House of Lords • Seven clauses: • Legal definition for Starter Homes • Define who can purchase • Set price caps – and allow these to be varied by regulation • Place duty on Local Authorities to promote Starter Homes in their area – including that Starter Homes are built on all ‘reasonably sized sites’ (details to be provided in secondary legislation) • Require Local Authorities to report progress through Annual Monitoring • Enable Government to issue ‘compliance direction’ where Local Authorities don’t meet their statutory duty

  6. Next Steps • NPPF consultation closes 22 February – announce outcome later in 2016 • Housing and Planning Bill now in the House of Lords – finalise by Summer • Publish consultation on secondary legislation on ‘reasonably sized sites’ threshold – March 2016 • Publish Starter Homes Land Fund prospectus – March 2016 • Ongoing engagement with lenders, house builders and Local Authorities to galvanise support and identify larger scale delivery and partnership working • Prepare and publicise ‘scheme designs’ for Lenders, Local Authorities and house builders – by Summer

  7. Discussion questions • What is the relationship with the planning system in terms of: • Local plan preparation? • Planning decisions? • What Guidance is needed to help local authorities take account of viability considerations for plan-making and decisions? • How can the impact of the new policy on the preparation of local plans be minimised?

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