Starter Homes: Good Start or Non Starter?

The Housing and Planning Bill, currently passing through Parliament, is adding to the different types of affordable housing. It is about to create a new creature of statute, the "starter home". Starter homes are new homes available to purchase (either freehold or leasehold) by persons under 40 which are to be sold at no more than 80% of the market value of the dwelling. The price at which they are to be sold is to be capped, the amount of cap depending upon whether they are located within Greater London or elsewhere within England. In Greater London the cap will be £450,000 and the rest of England the cap will be £250,000.

The Government is aiming to achieve 200,000 starter homes by 2020/21. Local Planning Authorities are therefore to be under a general duty to promote the supply of starter homes at all levels when exercising their planning functions. This means that they will need to make provision in their local plans for such homes and will also need to make provision for them when determining planning applications. The Housing and Planning bill also gives the Secretary of State the power to make regulations which will make it possible for them to prescribe that certain types of residential development (and by this we assume development above a certain number of plots) must provide a certain amount of starter homes.

This power to make regulations specifying the amount of a particular type of affordable home represents a departure for planning applications, as normally the requirement to provide affordable housing or other elements of a development is set out in planning policy, which the decision maker will give weight to when determining the planning application. The implication of any requirement being set out in regulations is that local planning authorities and other decision makers will not have any discretion when determining planning applications and that the regulations will have to be complied with. This new approach presumably stems from the successful challenge to the Government's thresholds that it attempted to impose on affordable housing sites through the national planning policy framework. That attempt was challenged in the Courts and the policy was quashed. 

These are the basic provisions of the Bill and much will depend upon the regulations that are to be made under the bill. They will set out the amount of starter homes to be provided and the type of sites that must provide them. The obligatory nature of the requirement is inevitably going to impact on the ability to seek the more discretionary elements of affordable housing that presumably will remain open to local negotiation, but only once the starter homes have been provided. One of the casualties of the initiative could well be the amount of affordable housing for rent that is provided and made available to housing associations.