First Homes Consultation
We realise that you are all busy dealing with the consequences for staff, tenants and customers of the coronavirus pandemic, however this consultation is still due to finish on 3rd April. This response which has been prepared with the PlaceShapers Board will help to inform your response. We understand that housing markets vary across the country and that not all comments will reflect your local circumstances, we have set this out so that you can pick 'n' mix the issues which resonate with your organisation and its circumstances.
The consultation documents can be found here
Placeshapers accepts that the Conservative Manifesto committed the Government to “offer more homes to local families, enabling councils to use developers’ contributions via the planning process to discount homes in perpetuity by a third for local people who cannot otherwise afford to buy in their area. Councils could use this to prioritise key workers in their area, like police, nurses and teachers.”
We also note that the consultation states ““mindful of the trade-off between the level of ambition for First Homes, funded through developer contributions, and the supply of other affordable housing tenures” and is “committed to renewing the Affordable Homes Programme so it can continue to support the delivery of hundreds of thousands of affordable and social homes. As part of the design of this renewed programme we will consider the provision of affordable housing in the round, including the mix of tenures delivered through developer contributions, to reflect the Government’s priorities and meet the housing needs of local communities across the country”.
Placeshapers welcomes a commitment to housing key workers and that this is an enabling power for local authorities. Many of our members are involved in products including, shared ownership, which support home ownership and we understand that home ownership is an aspiration of many of our tenants.
We would wish to raise the following issues for consideration of the development of this policy approach:
1) Any allocations of First Homes should be based upon a local housing assessment and that councils should have the discretion, as set out in the manifesto, to determine the level of such homes. Housing markets operate differently not just regionally or across the country but within local authority areas. Council’s need to have the freedom to have local housing policies driven on the basis of local evidence.
2) One factor in reducing housing delivery is absorption rates, this is raised as a concern recently in the Letwin Review. There is a danger that moving to developments where all housing is effectively for sale could slow down development and have a negative impact on the Governments’ housing supply targets.
3) That the relationship between shared ownership programmes and First Homes should be considered. A 30% discount could make it impossible for Governments’ existing home ownership products such as shared ownership to compete on the same or nearby sites with First Homes in some parts of the country.
4) We have a concern that if developers have to fund discounts for First Homes that this will make affordable and social rented homes 'unviable' or that developers will favour First Homes over social and affordable rent.
5) If developers have to fund the discount then the unintended consequence could be that either prices of all homes increase to pay for the discount or that the quality of these homes is lower than other homes built within the scheme. Given the government’s commitment to quality we are sure this would not be the intention.
6) We think there is an opportunity to meet the government’s ambitions with other products including Do It Yourself Shared Ownership and Rent to Buy and would like to have the opportunity to explore these further with civil servants and ministers.
Given the potential consequences of this policy we would suggest that it is piloted in a small number of representative local authority areas and that the impact of the First Homes on the delivery of existing affordable homes types, both rented and shared ownership, the impact on house prices and quality are all evaluated prior to any national roll out.
We would also want to see an increase in affordable housing funding from Homes England and the GLA to compensate for the loss of affordable homes delivered through section 106 agreements due to the provision of First Homes.