The Starter Homes initiative now faces an uphill struggle onto the statute books following setbacks in the House of Lords. Critics should be careful not to write them off, though, because the Government is adopting a twin track approach that is likely to deliver changes this year either way which will disrupt and reshape planning debates.
Even if the radical Starter Homes Duty is unravelled successfully by the House of Lords, it seems very likely that the Government will modify the NPPF to make Starter Homes a qualifying affordable housing tenure and, potentially, attempt to give it the primacy that the Housing and Planning Bill 2015/16 was aimed at until the Lords rebelled.
Either way, the changes will undoubtedly have a radical effect on Local Plan and application processes:
- Local Plan snakes and ladders. Again. More complication, more fuss and evidence base changes. Government is likely to change guidance on Housing Needs assessment, to identify first time buyers as in housing need. This will overturn the apple cart on existing SHMAs and Local Plans, which will immediately become out of date.
- Starter Homes will be exempt from CIL. There is no detail in the Technical Consultation on how or when this will come into effect or how the clawback will work where homes are sold in breach of the protected period restrictions. Care is needed in swapping tenures ahead of the changes coming into effect.
- Transitional measures. The current Starter Homes Technical Consultation is not clear how any Starter Homes requirement would be phased in. The industry must have some headroom so that the changes do not delay schemes submitted before a sensible transitional date.
- There will be winners – the new price caps should deliver better returns where there is a straight swap for Shared Ownership. Authorities will seek an increase in overall affordable provision. The changes may end up bolstering the case for a fixed percentage of affordable housing in London. At Lower Graylingwell, the 30% affordable provision has increased to 50% Starter Homes, for example. Developers will need to plan for the demise of ‘golden brick’ payments by Registered Providers, though, and assess the cashflow implications of another 20% of product as sale tenure. Marginal sites, including previously developed green belt will be sold heavily on the back of Starter Home delivery and should expect kinder words on appeal as a result.
- The allowance for commuted sums in ‘high value areas’ will perpetuate the existing difficulty of policies that surrender to landowner expectations and muddy the waters for developers bidding for land.
- There will be blood. The changes will bypass conventional housing need. Reluctant and resistant authorities with backlogs of vulnerable and excluded people on the housing register who cannot access a £450k home will point to the fundamental jurisdiction in the Town and Country Planning Act 1990 to take local, democratic decisions in the interest of good planning.
They may weigh the breach of the Starter Homes duty against the duty to meet needs. The extent to which the Regulations can oust that, or any breach creates a ground for legal challenge, will come to the fore. Great care will also be needed on reporting the effects of the affordability sacrifice.