2016 Response to Starter Homes (May)

Introduction

While accepting the need for more housing to cope with the increasing demand from the native and the immigrant population, we view with some circumspection the government conclusion that home ownership is the key need that needs to be satisfied.

Today it is not only the capital cost of housing but also market rents that are beyond the reach of a substantial section of the community especially those under 35. The Starter Home programme may facilitate the purchase of homes by some of those without their own homes, but there is no evidence to indicate the proportion. The programme needs to match demand rather than need, and the demand depends on the likely incomes to cover mortgage payments and maintenance costs.

For those whose income is insufficient to fund purchase there is an obvious need for affordable rented accommodation. That 60% of the community own their own home must indicate that 40% need rented accommodation, and since a substantial proportion earn less than the average wage, the need is great and will not be met by the Starter Homes programme.

NORA answers to the questions reflect these concerns.

Response to questions

Q1: Do you support restrictions on the sale and sub-letting of Starter Homes for 5 years following initial sale? Do you support allowing individuals to sell at a higher proportion of market value as the number of years they have lived in the home increases? If not, what other approaches can we adopt to meet our objectives?

YES

We agree that the sale and sub-letting of Starter Homes should be restricted but not in terms of specified times. If the restriction was timed, it would inevitably mean that Starter Homes would all disappear unless of course there was a continuous programme of Starter Home production. Surely there is an argument that the sale of a Starter Home should always be at the same discount, so that any rise in value would be reflected in the sale price. Provided a restriction that the Starter Home could only ever be sold to those eligible for them, there would then always be a supply of them for future home-owners.

Q2: Do you agree that flexibility over the age 40 restriction should be given when joint purchasers are looking to buy a Starter home, one purchaser being under 40 years old but the other older than 40?

YES

Q3: Do you agree that there should be an exemption from the age 40 restriction for injured military services personnel and those whose partner has died in service?

YES

Q4: Would a site size of 10 units or more (or 0.5 ha) be an appropriate minimum threshold for the Starter home requirement? If not, what threshold would be appropriate and why?

YES

Q5: Should the minimum percentage requirement be applied uniformly on all sites over 10 units to provide a single requirement across the country?

YES

Q6: If so, do you agree that 20% represents a reasonable requirement for most areas?

NO.

The requirement needs to reflect the likely demand in the area, which will vary from district to district. It should be assessable by the local planning authority . In London for example it would need to be greater than 20%, while for example in Cumbria it could be much less.

Q7: Do you support an exemption from the Starter Homes requirement for those developments which would be unviable if they had to deliver any affordable housing including Starter Homes? If so, how prescriptive should the viability test be in the regulations?

The problem with this exemption would be how 'unviability' is assessed.

Q8: Do you support the proposed exemptions from the Starter home requirement? If not, why not?

YES

Q9: Should group custom build developments and developments with a very high level of affordable housing such as estate regeneration schemes be exempt? If not, why not?

YES

Q10: Are any further exemptions from the Starter home requirement warranted, and why?

NO

Q11: Do you support the use of commuted sums to deliver Starter homes where the local planning authority agrees?

YES

Q12: Do you support the proposal that private rented sector housing (for institutional investment) and specialist older people's housing should meet the requirement through off-site contributions?

NO.

Rented accommodation and specialist care homes need to be encouraged, so an extra burden is not appropriate.

Q13: Do you agree that Starter Homes monitoring reports should be an annex to the Authority Monitoring Report?

YES

Q14: Do you agree that these reports establish the key actions taken to support Starter Home delivery and the outcomes in terms of permissions granted and completions?

YES

Q.16 Do you support a transitional provision for the Starter Homes regulations?

No comment

Q.17 Is there further evidence we should be considering in our assessment of equalities implications?

YES.

The emphasis on Starter Homes could well prejudice the development of other categories of affordable homes such as those for the disabled, the elderly and those in need of social rented accommodation. Furthermore unless preference is given to local inhabitants, they may find the schemes exclude them in favour of more wealthy first time buyers from outside their area.

Overall there is concern that the scheme will only help the more wealthy able to afford to purchase housing in the price ranges listed in the Consultation Paper.

No comment on Question 18.

May 2016                      Alan B Shrank - NORA chairman