Written statement to Parliament

Starter homes

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Changes to planning policy announced following response to the consultation on proposals to enable more starter homes for first time buyers.

The Rt Hon Brandon Lewis MP

I would like to update hon. Members on the outcome of the government’s consultation, launched by the Prime Minister in December, 2014 seeking views about our proposals for planning reform to support the development of 100,000 new high quality, low cost starter homes for young first time buyers.

We are determined to ensure young people are not denied what their parents took for granted – the opportunity to buy their own home, settle down and enjoy the security that home ownership brings. Nearly 192,000 households have now been helped by the government to buy or reserve a home since 2010, through schemes like Help to Buy and the reinvigorated Right to Buy. But we know there are still far too many hardworking young people from all walks of life struggling to gain a foot on the property ladder, so we want to go further and give them access to a new generation of high quality, low cost starter homes.

Our starter home consultation proposed:

  • the introduction of a new national exception site planning policy to enable starter homes to be built on under-used or unviable commercial or industrial sites not currently identified for housing, on both public and private land
  • for these starter homes to be only sold to young first time buyers at a minimum 20% discount below their open market value
  • that local planning authorities should not seek section 106 affordable housing and tariff-style contributions on starter homes
  • they should be exempt from the community infrastructure levy to enable developers to help deliver the discounted sale price

We received over 250 responses to the consultation. There was strong endorsement from prospective first time buyers for the starter homes policy. Many local authorities, developers and lenders also endorsed more support for first time buyers, and made helpful comments about how this new planning policy could be implemented. The government has published its consultation response today, and I will place a copy in the Library of the House. It will also be available online at: www.gov.uk

After careful consideration of these responses, the government is today making the following change to national planning policy:

Local planning authorities should work in a positive and proactive way with landowners and developers to secure a supply of sites suitable for housing for first time buyers. In particular, they should look for opportunities to create high quality, well designed starter homes through 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.

Where applications for starter homes come forward on such exception sites, they should be approved unless the local planning authority can demonstrate that there are overriding conflicts with the National Planning Policy Framework that cannot be mitigated.

Planning obligations should be attached to permissions for starter homes on Starter Homes exception sites, requiring that the homes are offered for sale at a minimum of 20% below open market price, to young first time buyers who want to own and occupy a home. They should also prevent the re-sale and letting of the properties at open market value for a 5 year period.

In view of their contribution to meeting housing needs, Starter Homes exception sites should not be required to make section 106 affordable housing or tariff style contributions.

Exception sites may include a small proportion of market homes, at the planning authority’s discretion, where this is essential to secure the required level of discount for the starter homes on the site.

Starter Homes developments are expected to be well designed and of a high quality, contributing to the creation of sustainable places where people want to live, work and put down roots to become part of the local community. A new Design Advisory Panel set up by the government, involving leading industry experts, is developing an initial set of exemplar designs for starter homes which we expect to publish shortly for wider comment. While recognising the need for local flexibility, we would expect these designs over time to become the default approach to design to be considered for Starter Homes developments.

This new national planning policy should be taken into account in plan-making and decision-taking, and should be read alongside other policies in the National Planning Policy Framework.

We will shortly publish revised planning guidance to assist local planning authorities in implementing this policy change. This guidance will support implementation of the policy, including the definition of under-used or unviable land and young first time buyers.

We will also work with developers, lenders, and local authorities on the development of further supporting technical material.

In addition to this policy change, the government will seek to amend the community infrastructure levy regulations in the next Parliament to exempt discounted Starter Home developments from the levy. We will also consider further how the development of more starter homes can be encouraged through further planning reforms, including the opportunity to use other forms of land.

This written ministerial statement sets out agreed coalition government policy to deliver a national starter homes scheme and planning policy; it is separate from the announcement by the Prime Minister today setting out further Conservative policy intentions on starter homes for the next Parliament.

Published 2 March 2015