Starter Homes Initiative for first time buyers

The Government has issued a consultation seeking to make new homes available to first time buyers at a 20% discount. It is proposed that such homes will come forward on brownfield sites, and developers will be incentivised by an exemption from CIL liabilities and reduced s106 payments.

CLG has recently issued a consultation into its proposed ‘Starter Homes Initiative’, designed to enable first time buyers under the age of 40 to get on to the property ladder.

The initiative as currently proposed would entail a new planning policy targeting the release of commercial or industrial land that is under-used or unviable (including such land which is allocated for commercial development, but which development is not likely to come forward), together with an exemption from CIL liabilities and any obligation to make s106 contributions towards affordable housing. In return, developers would be required to offer the new housing at a discount of at least 20% of the property’s open market value.

To further incentivise the developer, the proposals consider allowing a small amount of market housing on the sites. Owners would not be able to sell the properties on the open market for a given period of years (between 5 and 15 is suggested).

Authorities would be able to refuse applications for reasons of health, safety or infrastructure. It is anticipated that as these units would be additional to planned housing growth, the authority would not suffer from inability to recover CIL. Site specific infrastructure requirements could still be met through s106 obligations.

It would be interesting to hear the industry’s thoughts on how attractive these proposals would be. Will they result in sites with a sense of community, where people want to live? Will the restriction on disposing of the properties at market value for a given number of years hamper the availability of mortgages?

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