What does the Housing and Planning Bill mean for home ownership?
An Englishman’s home… could be available at 80% of market value
The other core thrust of the Housing and Planning Bill is in promoting home ownership. The importance of this to the Conservative Party is well known and the extension of Right to Buy to housing association tenants and its impact on housing associations has been well covered elsewhere, not least by Julia Unwin of the Joseph Rowntree Foundation on our blog.
Less openly debated has been the starter homes clause of the Bill, which is likely to achieve a more subtle but lasting shift in housing tenure over the next few years. The Bill explicitly promotes starter homes – homes sold at 20 per cent below market value, exclusively to younger first-time buyers (under the age of 40). The
Secretary of State will be able to direct local authorities to grant planning permission only if the requirement for starter homes is met -– and the Government has committed to building 200,000 of them.
The starter homes policy has been around for a while, but until now the numbers haven’t really stacked up for developers. But this change will mean that developers can meet their affordable housing contribution by delivering starter homes. This is likely to be preferred by many developers as they will have less of a negative impact on market values than homes provided for affordable or social rent. It may be that there are very few homes built for social rent by developers in the next five years.
This will be a key battleground and gets right to the heart of the housing debate in the UK – is owner/occupation the ideal model and if so, how best to deliver it?
For Labour, this Bill comes too early, with its independent review into home ownership, led by Taylor Wimpey chief executive Peter Redfern, not due to report until summer 2016. John Healey’s initial take is that it should be the state overall doing the building – something that would not only provide more homes but also drive down the cost of the housing benefit bill.
There is a deal of sense in this argument and one that might be picked up by the newly launched National Infrastructure Commission. But in the interim, the Housing and Planning Bill is seeking to reshape the provision of low cost homes to fit with a Conservative worldview – one that sees homes for affordable rent as decidedly non-essential.
Part I can be read here.