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 proposed a £1.2 billion starter home fund to prepare brownfield areas for new homes. It expects that this will speed up the construction of at least 30,000 new starting houses and up to 30,000 market homes on 500 new sites by 2020, helping to meet the goal to build 200,000 new starter homes over the next five years of 200,000 new starter homes being constructed. Inquiring minds want to know what our panel of experts think about it.

Vatche Cherchian, Portico’s regional director, pictured, ( said: “In a nutshell, I believe it will work. That’s because I think it will assist to plug some of the gap between the dearth of supply and the surplus of demand. “ Unfortunately, the construction of new residences is not keeping pace with the increase in demand. It’s for that reason that I think we will still find ourselves with a similar supply/demand situation in years to come – despite the improvements in legislation and creation of new locations.

As many locations already have planning clearance, it’s a perfect short-term solution for finishing these projects rapidly. To put it another way, these homes will be available for sale shortly.

“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 legislation will surely help a sector of the market, but there will still be people on lower incomes that won’t be able to profit from the policy.

For the smaller developers, however, who were previously overlooked and outbid by the larger firms, this is welcome news.

The finance for the small developers is also a crucial aspect as the government need to guarantee the legislation supports the choice for inexpensive financing; it may still be exceedingly pricey for lenders to lend on smaller size developments.”

FMB chief executive Brian Berry said: “Some details of how the starter homes programme will be delivered are still being ironed out, but the strength of the government’s will to deliver starter homes is very clear.” Brian Berry.

“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.

We believe that this new fund’s ability to acquire and prepare these kinds of locations could be the key to unlocking some of these possibilities.

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. Smaller sites can be unlocked with the help of this fund, and regional builders of various sizes will be able to use it.

“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 bridge this gap in funding, enhancing the affordable element on a property.

In addition, a group of smaller sites within a region can be examined jointly. The open market/affordable mix would provide flexibility across collective sites rather than on an individual site basis, and this would offer economies of scale.”

Sanderson Weatherall property consultant Owen Pike, an associate partner and planning expert, said: “Because of the uncertainties surrounding the availability of affordable homes, it is doubtful that the Housing and Planning Bill would boost housing deliveries in the short term.

However, it is unclear if starter homes must be provided lieu of affordable housing criteria or in addition to those already mandated by the statute. Because it will have an effect on the viability of projects, I feel that ‘live’ residential application processing may be halted until the government clarifies this issue.

Attic Insulation

“If councils are forced to sell their housing stock under Right to Buy, this could force the poorest out of expensive areas like London. It is essential to plan for the needs of everyone in society if we are to achieve a socially and economically balanced society.

“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.

More acreage to build homes is good and should assist expand housing supply, as proposed reforms to the planning system. 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, financing should be made available for councils to create their own housing stock.”

One of the partners at property consulting firm Bidwells John Long said: “By 2020, the government has set a goal of 400,000 new affordable homes, and the current Housing and Planning Bill proposes that councils face new responsibilities to increase the supply of starter homes.”

Starting homes are likely to be included in the concept of affordable housing moving ahead, as is granting authorization for residential developments larger than a particular size only if they include starter homes, in order to enable this.

Starter homes are not expected to replace existing provisions like property to rent or shared ownership because we do not know what the qualifying site thresholds are going to be.

“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.

Last Updated on December 29, 2021


Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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