Government launches Starter Homes consultation

Government launches Starter Homes consultation

Starter Homes consultation shows consideration for build to rent sector.

The much-anticipated Starter Homes consultation document has been launched by DCLG. It provides further detail of the government’s plan for Starter Homes, set to be required on all ‘reasonably sized’ developments, and asks for responses from interested parties by the 18th May, 2016.

The forward to the consultion from Housing Minister Brandon Lewis  states, “This technical consultation document seeks your views on the details for the regulations to be made under powers contained in the Housing and Planning Bill, including options for the Starter Homes requirement on reasonably sized sites.”

Size of site

The document proposes that the Starter Homes requirement should apply to sites of ten or more units, or which have an area greater than 0.5 hectares. It notes, “this would ensure that very small sites would not have a compulsory Starter Homes requirement, which could have an adverse impact on the form or viability of such developments.”

It goes on to mention the possibility of a “higher threshold” of 25-50 units on “larger sites”.

The consultation document notes that, “evidence suggests that a starter homes requirement of 20% of all homes delivered on a residential development would be viable on an average development.” It suggests a lower rate of 15% may also be an option.

What is a starter home?

Clause 2 of the Housing and Planning Bill defines a starter home as a new dwelling only available for purchase by qualifying first-time buyers and which is made available at price which is at least 20% less than its market value but which is below the price cap. A price cap of £250,000 outside Greater London and £450,000 in Greater London is specified in the Bill.
The document also lists some of the proposed exemptions allowed, including for sites, “which would be unviable if they had to deliver any affordable housing including Starter Homes.”
Build to rent

The property industry has welcomed the proposals that allow build to rent developers to build Starter Homes off-site, or pay a commuted sum. The document says, “We propose that private rented sector developments could contribute to starter home provision and the requirement should be met through an offsite contribution for delivery of starter homes.”

Ian Fletcher, director of policy (real estate), at the British Property Federation, said: “We are pleased to see that our calls for build to rent to be treated differently have been recognised. An unbroken block where all the units are for rent is much easier to manage and much more attractive to investors, which is why a mix of private and discounted market rent system works well. The build to rent sector has the potential to deliver a significant number of new homes and drive up standards in the private rented sector, so it is good to see that Starter Homes will not be an obstacle to development.”

The consultation will last for 8 weeks from 23 March to 18 May 2016. Specific questions the government wishes to hear responses on, and methods to submit responses, are listed in the Starter Homes consultation document.

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