'One size fits all' First Homes policy could limit provision of other types of affordable housing, RTPI warns

The government's proposed First Homes initiative will impact on the ability of councils "to meet all types of housing need through the planning system" and "undermines the local plan-led approach", the Royal Town Planning Institute (RTPI) has warned.

New homes: consultation on government's latest discounted homes policy launched in February
New homes: consultation on government's latest discounted homes policy launched in February

In February, the Ministry of Housing, Communities and Local Government (MHCLG) published proposals for its new "First Homes" scheme, to fulfil a manifesto commitment to provide 30 per cent discounts on new homes for first time buyers. The consultation closed on 1 May. 

The consultation document said the government is considering two broad options to ensure that a larger proportion of discounted homes for sale are delivered through developer contributions.

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 site of more than ten units a requirement that a set percentage of units be provided as First Homes.

In a response to the consultation, published this week, the RTPI said that it "welcomes the advancement these proposals make" on the previous Starter Homes initiative "in particular taking the advice of RTPI and others to lock in discounts in perpetuity".

The Starter Homes initiative was championed by David Cameron's government, which pledged that 200,000 Starter Homes would be delivered at a 20 per cent discount. In the end, the government failed to bring forward the necessary planning guidance to support the policy and no Starter Homes were built.

Unlike Starter Homes, the discount on First Homes would be 30 per cent and held in perpetuity, which means the same reduction would have to be applied when the original purchaser decides to sell.

The RTPI said First Homes "may be a useful addition to the suite of affordable housing products in some areas where there is strong identified demand for discounted sale housing".

For example, it said, "members have reported particular demand in some more rural settlements where discounted market sale homes can help first time buyers who might otherwise have left these settlements for more affordable areas".

However, the body went on to flag serious concerns about the policy.

It said: "As proposed, First Homes will impact on the ability of Local Planning Authorities (LPAs) to meet all types of housing need through the planning system. It is our belief that LPAs should be free to meet objectively assessed need in the best way possible, including the provision of other forms of affordable housing alongside First Homes."

The response document said the National Planning Policy Framework (NPPF) and Planning Practice Guidance (PPG) "require affordable housing mix policies to be based on local evidence of need (and viability). However, the framework for First Homes would elevate First Homes above all other tenures."

The RTPI said this "undermines the local plan-led approach", adding that "it is crucial to ensure the primacy of local plans, using local need and viability evidence to decide what affordable tenure is most appropriate – not a national one size fits all".

The statement also said: "While First Homes will be more affordable than market sale homes, they may still be unaffordable to those they are trying to help as they are not linked to local incomes."

"In some local authorities house prices are more than 10 times average incomes – a discount of 30 per cent on home purchase will do little to help key workers in those areas."

The RTPI is further "concerned that local authorities would be expected to play a large management role, but there are no definite proposals as to how such councils would be able to resource, manage and fund this additional workload".

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