Aspiring home owners will be asked to register their interest in buying via the Starter Home initiative from the start of next year, an initiative that has been brought forward by at least six months earlier than planned.
There will be a change to the planning system to free under used or unviable brownfield land from planning costs and levies in return for a below market value sale price on the homes built on the site.
Developers and councils are being asked to respond to the proposals to ensure the changes will unlock a range of sites across the country. Many of the country’s leading house builders and councils are already looking at sites that could be used for new homes.
The 100,000 homes will be available to first time buyers under the age of 40 as part of the initiative and work on the first raft will start next year following a consultation period that is due to end on 09 February 2015.
At the heart of the Starter Homes initiative is a change to the planning system. This will allow house builders to develop under-used or unviable brownfield land and free them from planning costs and levies. In return, they will be able to offer homes at a minimum 20% discount exclusively to first time buyers under the age of 40.
Currently, builders can face an average bill of £15,000 per home in Section 106 affordable housing contributions and tariffs, often adding tens of thousands to the cost of a site. Under the proposals, developers offering Starter Homes would be exempt from those Section 106 charges and Community Infrastructure Levy charges. The homes could then not be re-sold at market value for a fixed period, making sure that the savings are passed onto homebuyers.
Already leading house builders, including three of the nation’s largest and councils from up and down the country have pledged their support for the initiative, which will bring much needed homes onto sites that have previously been deemed unviable and are lying unused. More than 30 house builders have said that that they support the plans and would consider bringing forward land to develop the new, discounted houses, from next year.
A new design panel, including world famous architects such as Sir Terry Farrell and Sir Quinlan Terry will be established to ensure that new homes are not only lower cost but also high quality and well designed, giving hardworking house buyers attractive homes that meet the demands of modern life.
‘Hard working young people want to plan for the future and enjoy the security of being able to own their own home. I want to help them do just that. Under this scheme, first-time buyers will be offered the chance of a 20% discount, unlocking home ownership for a generation,’ said Prime Minister David Cameron.
Stewart Baseley, executive chairman of the Home Builders Federation, said that bringing forward more land for house building, while also enabling more first time buyers to realise their ambition of home ownership would be another positive step on the way to tackling the housing shortage.
He confirmed that the industry is keen to work with government to develop policies that would allow for more high quality homes to be built in the right places.
The Council of Mortgage Lenders welcomed the announcement. ‘Mortgage lenders support measures that deliver affordable ways for people to access home ownership. This new scheme should provide a modest additional flow of lower cost housing for first time buyers,’ said Paul Smee, CML director general.
He pointed out that lenders will need to consider whether there are any specific lending risks involved. ‘We will respond to the consultation to help ensure that the scheme is practical and workable from a lending perspective. Once it is up and running, we will help signpost first time buyers to government website information about the scheme,’ he added.
Justin Gaze, joint head of residential development at Knight Frank, described the announcement as a step in the right direction for delivering more affordable and high quality new homes for first time buyers. 'The government cannot however, lose sight of development viability especially with regard to private developers building on higher value brownfield land,' he said.
'The aspirational announcement is undoubtedly a positive, but is going to need sites which land owners are willing to discount, government money and publicly owned land to support it and help fund the large percentage of affordable housing the Prime Minster is proposing,' he added.
