Starter Homes: Manifesto Commitment The Conservative Party Manifesto 2015, Page 52 We will build 200,000 Starter Homes and more affordable housing We will build 200,000 quality Starter Homes over the course of the next Parliament, reserved for first-time buyers under 40 and sold at 20 per cent below the market price.

Rationale and demand Home ownership declining: Proportion of homeowners under 40 in England has declined by over a third from 62% in 1993/4 to 39% in 2013/14 First time buyer affordability declining: Average house price to earnings ratio for successful first time buyers in 2014 was 4.3, compared to 2.7 in 1993 Strong preference for home ownership: 86% of people say want to own a home as it is a “good investment” (26%) and more secure than renting (23%) Strong demand for Starter Homes: over 69,000 first time buyers have so far expressed an interest in Starter Homes on national demand ‘register’

Background & milestones to date For first time buyers under 40 20% below market price, costing no more than £450,000 (London) & £250,000 (elsewhere) 5 year resale and lettings restriction Market product – assumption of no public subsidy March 2015 New brownfield exception site policy To be built on under- used or unviable commercial and industrial sites Starter Homes July 2015 Productivity Plan commits to: stronger, wider exception policy minimum % of Starter Homes on all ‘reasonably sized’ sites August 2015 Rural Productivity Plan: Starter Homes allowed on Rural Exception Sites Announced £36m fund to kick start Starter Home development working with HCA, GLA & councils October 2015 PM announces intention to consult on wider Affordable Housing definition to include Starter Homes First clause of Housing Bill - duty on councils to promote Starter Homes November 2015 Chancellor announces £2.3bn funding programme for Starter Homes December 2015 Consultation on changes to NPPF, incl. widening definition of affordable housing to include Starter Homes May 2015 Manifesto Commitment to build 200,000 Starter Homes January 2016 Additional £1.2bn fund to build 30,000 affordable ‘starter homes’ on underused brownfield land by 2020

Starter Homes  Starter Homes exempt from Community Infrastructure Levy and s106 affordable housing contributions  Proposed changes to NPPF:  Expand ‘exception site’ policy to include other types of underused or unviable brownfield land – retail, leisure and institutional uses  Expand definition of affordable housing to include Starter Homes  Enable Neighbourhood Plans to designate land for Starter Homes  £2.3 billion funding to support delivery of up to 60,000 starter homes by 2020/21, to complement the planning reforms  Support implementation through Starter Homes Champions, Help to Buy agents

Housing and Planning Bill – Starter Homes provisions  Bill progressing through Parliament- currently in House of Lords  Seven clauses: o Legal definition for Starter Homes o Define who can purchase o Set price caps – and allow these to be varied by regulation o Place duty on Local Authorities to promote Starter Homes in their area – including that Starter Homes are built on all ‘reasonably sized sites’ (details to be provided in secondary legislation) o Require Local Authorities to report progress through Annual Monitoring o Enable Government to issue ‘compliance direction’ where Local Authorities don’t meet their statutory duty

Next Steps  NPPF consultation closes 22 February – announce outcome later in 2016  Housing and Planning Bill now in the House of Lords – finalise by Summer  Publish consultation on secondary legislation on ‘reasonably sized sites’ threshold – March 2016  Publish Starter Homes Land Fund prospectus – March 2016  Ongoing engagement with lenders, house builders and Local Authorities to galvanise support and identify larger scale delivery and partnership working  Prepare and publicise ‘scheme designs’ for Lenders, Local Authorities and house builders – by Summer

Discussion questions 1.What is the relationship with the planning system in terms of: a.Local plan preparation? b.Planning decisions? 2.What Guidance is needed to help local authorities take account of viability considerations for plan- making and decisions? 3.How can the impact of the new policy on the preparation of local plans be minimised?