ROUNDTABLE: In the April/May issue our experts give their views on the Government's £1.2 billion starter home bill

In January, the government announced a £1.2 billion starter home fund to prepare brownfield sites for new homes. It believes this will 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 – helping deliver the commitment to create 200,000 starter homes over the next five years. We ask our panel of experts what they think of the bill.

Vatche Cherchian, Portico’s regional director, pictured, (www.portico.com) said: “In a nutshell, I believe it will work. That’s because I think it will help to plug some of the gap between the lack of supply and the surplus of demand. “Unfortunately, new properties are not being built fast enough nor at the rate at which demand is growing. It’s for that reason that I think we will still find ourselves with a similar supply/demand issue in years to come – despite the changes in policy and development of new sites.

“It’s a great short-term solution as these sites already come with planning permission, which is usually a barrier in completing these projects quickly. In other words, these properties will be able to come on to the market quickly.

“It will also be great for young first- time buyers in the UK who are finding it increasingly difficult to get on to the property ladder due to intense competition amongst buyers; first-time buyers tend to come up against cash buyers and foreign investors, as well as increasingly difficult mortgage criteria from lenders.

“I do not believe that everyone will be able to buy however – even with the discounted market value of these new properties being built. This policy will certainly help a section of the market, but there will still be people on lower incomes that won’t be able to benefit from the policy.

“It is great news for the smaller developers, however, who were previously overlooked and outbid by the larger developers. “The finance for the small developers is also a key consideration as the government need to ensure the policy facilitates the option for affordable financing; it can still be extremely pricey for lenders to lend on smaller scale developments.”

Chief executive of the Federation of Master Builders, Brian Berry said: “Some of the details of how the starter homes programme is going to delivered are still being ironed out, but the strength of the government’s will to deliver starter homes is very clear.

“For their part, SME house builders are committed to improving options for first-time buyers, and this is a product which most small house builders can see would be attractive to deliver.

“The policy also opens up real opportunities for local authorities to work in partnership with SME house builders to deliver smaller, innovative brownfield developments which are attractive to young first time buyers and might complement wider regeneration objectives.

“Being able to purchase and prepare these kinds of sites may be the key to unlocking some of these opportunities, so this new fund could have a big part to play in this.”

John McAuliffe, managing director of McAuliffe Group, said: “The policy is an important tool to support the rejuvenation of derelict brownfield land – much of which is currently unviable for development due to location, size and site-specific geo-environmental complexities.

“Large housebuilders often focus on sites which can deliver over 100 homes, as there is relatively less planning and technical effort required. This fund will also help unlock smaller sites and assist small-to-medium sized regional builders in accessing them.

“It will also increase the provision of a better mix of affordable/social housing, which currently relies on being funded by the open market build element on a site-by-site basis. The fund will help fill this gap in funding, increasing the affordable element on a site.

“There is an additional opportunity where a bundle of smaller sites can be looked at collectively within a region. This would enable economies of scale, providing flexibility with the open market/affordable mix across collective sites, rather than on an individual site basis.”

Owen Pike, an associate partner and planning expert at property consultant Sanderson Weatherall, said: "It is questionable whether the Housing and Planning Bill will increase housing delivery, certainly in the short term, because of uncertainty over the provision of affordable housing.

“There is a general duty to promote supply of starter homes within the bill but it is not clear whether starter homes need to be provided instead of affordable housing requirements, or in addition to. This is a critical point and I believe ‘live’ residential applications could stall until the government clarifies, because it will have an impact on the viability of projects.

“If councils are forced to sell their housing stock under Right to Buy, this could force the poorest out of expensive areas like London. Planning for all members of society is crucial to delivering balanced
communities and driving economic growth.

“It is highly questionable whether growing businesses will remain in – or relocate to – areas where house prices are high, the supply of stock is limited, new development is restricted by planning constraints and where commuting levels are significant if their employees cannot afford to buy a home.

“The proposals to reform the planning system and provide more land to build homes are welcome and should help to increase housing provision. This includes introducing a Planning Permission in Principle, requiring local authorities to grant planning permission for enough service plots of land to meet the demand of self- build and custom house building and giving greater powers to the secretary of state to intervene in the preparation of local plans.

“However, in order to meet the needs of the whole population, including people who will never be homeowners, I think the government should reconsider its proposals for extending Right to Buy. Similarly, funding should be made available for councils to build their own housing stock.”

John Long, planning partner at regional property consultancy Bidwells, said: "The government has set a target of 400,000 new affordable homes by 2020 and the current Housing and Planning Bill proposes that duties are imposed on councils in order to increase the supply of new starter homes.

“To facilitate this it is likely that the definition of affordable housing will include starter homes and that, going forward, planning permission for residential development above a certain size will only be granted if starter homes are included.

“We do not know, as yet, what the qualifying site thresholds are likely to be, the percentage to be delivered or whether
starter homes will replace other provisions such as property to rent or shared ownership.

“But, this should help bring sites along in the development pipeline especially where a schemes viability has been compromised by other tenures such as social rented and intermediate homes.

“Pricing will remain an issue, especially for London, and should the provision of starter homes overtake that of homes to rent there could be further difficulties for those who do not have the funds to purchase a property.

“The trick will be to balance the needs between sustaining project viability and delivering affordable choice.

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