Starter Homes – Information for House Builders
Many thanks for your interest in the Starter Home initiative. The Home Builders Federation has been working with Government and other stakeholders in the development of the policy to ensure that it is an effective and workable initiative that is consistent with the realities of the home building industry.
The initiative is hugely ambitious with targets to build 200,000 Starter Homes by 2020, both on specific Starter Home exception sites and also to provide a proportion of Starter Homes on all ‘reasonably-sized housing sites’.
Starter Homes would be available to purchasers at a minimum 20% discount on open market value, paid for through exemptions from Section 106 affordable housing contributions or other tariff-style contributions. The Community Infrastructure Levy (CIL) exemption for Starter Home exception sites is expected to come into effect later in 2015.
Considerable detail relating to the initiative is still to be finalised by the Government and the HBF is supporting this through participation in a Technical Working Group run by the Department for Communities and Local Government as well as through other discussions with officials and advisers.
Background to Starter Homes
Following an announcement at the end of 2014 that a new Starter Homes initiative would be introduced to build 100,000 new homes for first-time buyers under the age of 40 at a 20% discount on open market value, in March the Government published a Written Ministerial Statement setting out the planning policy underpinning Starter Homes for exception sites. A guidance note on Starter Homes exception sites can be read here. This has now been incorporated into National Planning Practice Guidance.
Current features of the policy allows for:
- Direction for local authorities to look for opportunities establish Starter Homes exception sites on commercial and industrial land that is either under-used or unviable in its current or former use, and which has not currently been identified for housing;
- A presumption in favour of applications for Starter Homes unless there are overriding conflicts with the NPPF that cannot be mitigated;
- Planning obligations for permissions on Starter Homes sites will require that homes are offered for sale a minimum of 20% below open market price;
- Starter Homes should not be required to make S106 affordable housing or tariff style contributions;
- Exception sites may include a small proportion of market homes at the planning authority’s discretion where it is essential to secure the 20% discount for Starter Homes on the site.
A presumption in favour of applications for Starter Homes unless there are overriding conflicts with the NPPF that cannot be mitigated;
Planning obligations for permissions on Starter Homes sites will require that homes are offered for sale a minimum of 20% below open market price;
Starter Homes should not be required to make S106 affordable housing or tariff style contributions;
Exception sites may include a small proportion of market homes at the planning authority’s discretion where it is essential to secure the 20% discount for Starter Homes on the site.
Significant detail on the policy is still yet to be published and HBF is participating in a Technical Working Group being run by the Department for Communities and Local Government to work through much of the operational aspects.
Doubling the Ambition of Starter Homes
The Conservative Party manifesto included a commitment to double the ambition for the initiative, to build 200,000 Starter Homes by 2020. Following the Party’s electoral victory, ministers will be bringing forward a plan for establishing the policy framework to achieve this as part of the Housing Bill announced in the Queen’s Speech on 27th May 2015.
On 4th July, writing in the Times, the Prime Minister and Chancellor confirmed plans to accelerate the delivery of Starter Homes. This would be achieved by requiring that a proportion of starter homes will be required on all ‘reasonable sized housing sites’, and councils will have a duty to include starter homes in their local plans.
Funding for Early Sites
On 10th August, Communities Secretary, Greg Clark announced £26 million in funding for the first wave of Starter Homes. Although little detail is yet available the money is expected to be used by the Homes and Communities Agency to purchase sites appropriate for Starter Home exception sites and re-sell them to house builders.