Last edited 14 Mar 2019

Government to commission affordable homes on publicly owned land

On 4 January 2016, as part of its plans to deliver 200,000 starter homes over the next 5 years, the Prime Minister announced that the government would directly commission thousands of new affordable homes on publicly-owned land. Ref gov.uk : The government will directly build affordable homes.

They claim that direct commissioning has not been undertaken on this scale since Thatcher and Heseltine started the Docklands regeneration. The intention is to commission smaller building firms, currently unable to take on big projects, to build on publicly-owned land where planning permission is already in place.

This is seen as a sign of the government’s growing frustration that house builders are not delivering enough new homes. They suggest that at present, the top 8 house builders provide 50% of new homes. Direct commissioning by the government will support smaller builders and new entrants who lack resources and access to land.

In the first instance, construction of up to 13,000 new homes will start on 4 sites outside of London in 2016:

Connaught Barracks in Dover.
Northstowe in Cambridgeshire.
Lower Graylingwell in Chichester.
Daedelus on Waterfront in Gosport.

The Old Oak Common site in north west London will also be developed.

Up to 40% of the new properties will be affordable ‘starter’ homes. A starter home is a home sold to a first time buyer under 40, for at least a 20% discount compared to the market value. The purchaser must live in the home for five years to gain the full benefit of the discount.

In addition, a £1.2bn fund was announced to prepare brownfield sites for the construction of starter homes in the next 5 years. This is intended to fast-track the creation of at least 30,000 new starter homes and up to 30,000 ‘market’ homes on 500 new sites by 2020.

David Cameron said, “Today’s package signals a huge shift in government policy. Nothing like this has been done on this scale in 3 decades – government rolling its sleeves up and directly getting homes built.”

Communities Secretary Greg Clark said, “Today’s radical new approach will mean the government will directly commission small and up-and-coming companies to build thousands of new homes on sites right across the country. This, and the £1.2billion new starter homes fund, will help thousands of people to realise their dream of owning their own home.”

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said, “When it comes to building new homes, the availability of small sites is the single biggest barrier to SME house builders increasing their output. Any measures that the government can introduce that will increase the number of small sites suitable for SME house builders will help address the housing shortfall. It is also encouraging that the majority of these sites will already have planning permission in place as obtaining permission is all-too-often a lengthy and protracted process – avoiding this time delay should help house builders increase their supply much more quickly.