There must be an election on the horizon. With only two months to go, the Government has announced that it plans to double a previous commitment to provide 100,000 discounted starter homes to first time buyers and ensure the construction of 200,000 new homes that will be available to purchase with a minimum discount of 20%.
Whilst the scheme has been designed to enable the purchase of first homes by young adults, the scheme may be seen as an investment opportunity for wealthier parents with the cash to help their children get a foot on the ladder.
The scheme will be funded by removing the obligations for developers to provide affordable housing, or to pay any tariff-based contributions to general infrastructure pots. Starter Homes will also be exempt from CIL with amendments to the CIL Regulations to follow.
The guidance proposes that a s.106 agreement will require the Starter Homes to be first offered to first time buyers under 40 and at a discount of at least 20% and that there should be "appropriate restrictions" to ensure the homes are not resold or let at market value for at least 5 years.
The Government’s exception site policy enables applications for development for Starter Homes on unviable or under-utilised commercial and industrial land not currently earmarked for residential purposes - but this may be expanded in the future. Land may be in public or private ownership. Choosing an appropriate Starter Home exception site will have to be a careful exercise to ensure that remediation and infrastructure costs are not too great so as to render Starter Homes financially unviable. Local planning authorities will be able to use their discretion to include a small proportion of full market houses on Starter Homes exception sites where it is necessary for the financial viability of the site. Such market homes will attract s106 and/or CIL contributions in the normal way.