10 things you need to know about the government's 'First Homes' proposals

On Friday, the Ministry of Housing, Communities and Local Government (MHCLG) published a consultation on proposals for its new "First Homes" scheme. Here are ten things you need to know about the proposals.

New homes: Details on latest discounted homes policy revealed on Friday
New homes: Details on latest discounted homes policy revealed on Friday

1. The National Planning Policy Framework’s (NPPF's) definition of discounted market sales homes as being those made available at a minimum discount of 20 per cent off full market value is insufficient and should be altered. The MHCLG consultation document states that this level should be raised to 30 per cent at a "minimum".

2. The consultation document reveals that the government is considering two broad options to ensure that a larger proportion of discounted homes for sale are delivered. The first would stipulate that a percentage of affordable homes to be delivered through section 106 obligations should be designated as First Homes for discounted sale. The second option would be to impose on every "suitable site" of more than ten units a requirement that a set percentage of units are provided as First Homes.

3. The government is seeking views on whether changes to planning policy alone would be enough to implement the new policy, or whether it needs to change the law. The document states: "We are conscious that planning policy alone does not always guarantee delivery of homes. Local planning authorities must balance all material considerations when considering planning applications, and national policy is only one of these – other factors such as local plans and site viability can mean that national policy requirements for affordable homes are not met. We are clear that we want significant numbers of First Homes to be delivered and are considering legislative options to ensure that this policy cannot be sidestepped."

4. The government is minded to exempt First Homes from the Community Infrastructure Levy (CIL) to increase their delivery. The consultation document states: "Providing a national exemption in England from the Community Infrastructure Levy for developments providing First Homes according to a national standard would ensure consistency with other affordable tenures (e.g. shared ownership) and provide the certainty needed to support delivery."

5. The government will also consider amendments to CIL regulations "to ensure that CIL rates in England are not set at a level that would prevent current levels of affordable housing delivered through section 106 obligations from being secured in future". According to the document, if local authorities are "given the option to set a policy requirement that a proportion of section 106 homes are delivered as First Homes", it may affect their "decision-making on the relative balance between [CIL] and section 106". For instance, it adds; authorities "may choose to levy more [CIL] for infrastructure at the cost of affordable housing and First Homes". 

6. The consultation proposes amending the NPPF in relation to entry level exception sites, which provide entry-level homes suitable for first-time buyers or the equivalent for those looking to rent. Under the proposals, such sites would have to predominantly deliver First Homes, supported by a small proportion of market homes on sites where they are "essential to ensure the development will be deliverable". However, the government is not proposing to extend this requirement to rural exception sites.

7. "Local people" should get first refusal on First Homes, the consultation document states. The definition of "local people" would be at the discretion of councils "and can be based on either residency or work location, as appropriate". Councils should also consider whether they should use the scheme to prioritise allocations to key workers. 

8. The discounted sale price of the home will "last in perpetuity so that future home buyers can access the discounts and the homes can deliver long -term community benefit," the consultation says.

9. The scheme must "not to be used to subsidise the purchase of exceptionally expensive property". With this in mind, it says that the government is "minded to introduce a cap on the value of properties available for this scheme before the discount is applied."

10. Purchasers of First Homes will be restricted to using them as their "sole or primary residence".

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