Last edited 30 Mar 2016

Government plans for starter homes

On 29 March 2016, the government announced new rules for house-builders requiring that where sites contain 10 or more new homes, one in five must be a designated ‘starter home’. Ref DCLG DCLG , New government plans for 1 new home in 5 to be a starter home.

Starter homes are made available at a 20% discount from their market value, or cheaper, but their purchase is limited to first time buyers under the age of 40. The government sees this as a ‘major step’ towards its target for creating 200,000 starter homes and 1 million new homes by 2020.

The proposals also include provision for injured soldiers and partners of those who lost their lives in service, making them eligible for starter homes without the age restriction.

To limit the risk from speculators, the intention is that starter homes can only be resold to other first time buyers, at a similar discount, for five to eight years after purchase. There will also be sub-letting restrictions to guard against properties becoming opportunities for buy-to-let investors.

The government’s starter home support package consists of £2.3 billion for the first 60,000 starter homes, including £1.2 billion for brownfield land housebuilding.

Housing and Planning Minister Brandon Lewis said: “We want to ensure young people who aspire to own their own home can settle down and enjoy the security home ownership brings. Today’s proposals mean starter homes will be built on hundreds of housebuilding sites across the country, encouraging private and affordable housing is built side by side in mixed communities.”

However, in an interview with Designing Buildings Wiki in January 2016, Labour’s Shadow Housing and Planning Minister Roberta Blackman-Woods, said: “…while starter homes can be part of the solution to address the housing shortage, they cannot substitute for critically needed affordable housing for people on average incomes to whom starter homes are too expensive….they are only part of the solution to address the housing shortage.

“I worry that the definition for what constitutes ‘brownfield’ land is too vague and opens the door to ambiguity in planning and development. I am concerned about the government’s initiative that developers who build starter homes on brownfield land will be exempt from planning gain and that could lead to a deficit in resources for necessary infrastructure to support development.”