Copyright 2009 Northumberland County Council 1 Impact of the Housing & Planning Bill : Starter Homes Mark Ketley Head of Planning

Copyright 2009 Northumberland County Council Housing & Planning Bill Cornerstone of the Conservative Government’s vision for 2020 Much of its content trailed in the Conservative manifesto and in its productivity plan “Fixing the Foundations” Set to become a heavyweight piece of legislation 2

Copyright 2009 Northumberland County Council Housing & Planning Bill Introduced to Parliament on 13 th Oct 2015 in preparation for putting into law many of the pledges previously put forward by Gov’t Prime Minister expects all LA’s to create and deliver Local Plans A “crystal clear” message from Government 3

Copyright 2009 Northumberland County Council Housing & Planning Bill “making sure they take action to help reach the Government’s ambition of delivering one million homes by 2020” 4

Copyright 2009 Northumberland County Council Housing & Planning Bill 140 clauses in the new Bill which are either directly, or indirectly, related to Planning Mechanism for ensuring an increased rate of housebuilding in England, particularly on brownfield sites and for home ownership. 5

Copyright 2009 Northumberland County Council Housing & Planning Bill Average of 133,000 houses completed in England over the past ten years, pace of housebuilding has varied considerably. Increase in starts and completions since Q1 of 2013 but still well below pre-recession levels. 200,000 houses per annum required over the course of this Parliament to achieve one million homes target. Not achieved consistently since

Copyright 2009 Northumberland County Council Housing & Planning Bill 7 DCLG, Holmans, A. (2013) New estimates of housing demand and need in England, 2011 to 2031; NLP analysis

Copyright 2009 Northumberland County Council Housing & Planning Bill Permissions in Principle (PIP’s) Brownfield registers Doubling the number of Self Build homes NSIP housing projects Introduction of performance thresholds for minor applications (50% threshold) 200,000 Starter Homes 8

Copyright 2009 Northumberland County Council Housing & Planning Bill ‘A Greater Britain must mean more families owning a home of their own … We need a national crusade to get homes built. For years, politicians have been talking about building what they call “affordable homes” – but the phrase was deceptive. It basically meant homes that were only available to rent. What people want are homes they can actually own. So today, I can announce a dramatic shift in housing policy in our country. Those old rules which said to developers: you can build on this site, but only if you build affordable homes for rent … we’re replacing them with new rules … you can build here, and those affordable homes can be available to buy. Yes, from Generation Rent to Generation Buy…’ Prime Minister David Cameron, Conservative Party Conference, 7 October

Copyright 2009 Northumberland County Council Housing & Planning Bill Very clear shift in the world of affordable housing provision towards delivering home ownership. The Bill confirms the basics for the development sector providing Starter Homes. The level of detail is considerable but consistent with announcements to date. 10

Copyright 2009 Northumberland County Council Housing & Planning Bill A new Starter Home must be sold to a first time buyer at a discount of at least 20% of market value. Purchaser’s age limit of under 40 Letting/ resale restrictions will be defined in secondary legislation; it has been mooted previously that they would remain in place for 5 years ie. not “in perpetuity”. Price cap of £250,000 (or £450,000 in Greater London) 11

Copyright 2009 Northumberland County Council Housing & Planning Bill A new legal duty is to be placed on Council’s to promote the supply of Starter Homes in decision- taking and their other planning functions; they must have regard to Secretary of State (SoS) guidance in doing so. Regulations can also be made, such that LPA’s can only grant planning permission for housing development if the Starter Homes requirement in those regulations is met. 12

Copyright 2009 Northumberland County Council Housing & Planning Bill Secured by way of a S106 obligation to provide Starter Homes, or for an applicant to make a Starter Homes payment to the LPA. Regulations likely to require Starter Homes on all ‘reasonably sized’ new development sites and to promote any schemes to first- time buyers in their area. 13

Copyright 2009 Northumberland County Council Housing & Planning Bill Yet to be defined is the percentage of Starter Homes that should be provided on any one ‘reasonably-sized’ housing site. The SoS will be able to make a ‘compliance direction’ if an LPA does not carry out its Starter Homes functions adequately. 14

Copyright 2009 Northumberland County Council Housing & Planning Bill Royal Assent for the Bill is likely in April 2016 Secondary legislation likely to follow quickly thereafter. Changes to the NPPF - consultation responses due Feb

Copyright 2009 Northumberland County Council Housing & Planning Bill The Bill’s Starter Homes clauses are directly and indirectly inter-related to those for social housing and local authority (LA) housing. Likely to be amongst the most challenged and contentious area for debate as the Bill passes through Parliament. 16

Copyright 2009 Northumberland County Council Housing & Planning Bill Northumberland specific impact Starting point is that Starter Homes should not form part of the “affordable” definition. The Darras Hall example: OMV = £275,000 20% discount = £220,000 5% deposit of £11,000; mortgage of £209,000 17

Copyright 2009 Northumberland County Council Housing & Planning Bill Not affordable in perpetuity. Suggestion is that properties will be leaked to the market at OMV after 5 years. Price cap of £250,000 not appropriate to Northumberland or, indeed, the North East Suggest a price cap of £150,000 18

Copyright 2009 Northumberland County Council Housing & Planning Bill Analysis by Shelter has shown that the Starter Homes programme will not help the majority of people on the new National Living Wage or average wages into home-ownership in England by 2020 Won’t even help many people on higher than average wages in many areas of England. Only group it appears to help is those already earning high salaries. 19

Copyright 2009 Northumberland County Council Housing & Planning Bill Starter Homes for families earning average wages will be unaffordable in over half (58%) of Local Authority areas across the country in 2020 Families on the National Living Wage will only be able to afford a Starter Home in 2% of LA areas Single people on low or average wages will struggle to afford a Starter Home in 2020 in the majority of LA areas. 20

Copyright 2009 Northumberland County Council Housing & Planning Bill 21

Copyright 2009 Northumberland County Council Housing & Planning Bill Starter Homes should not be a replacement for affordable housing and should not be relied upon to resolve the housing crisis. Should be seen as an “addition to” shared ownership and social/affordable rental properties. Government needs to look very closely at this policy before going down the wrong track. 22

Copyright 2009 Northumberland County Council 23 Questions?