Already this year, the government has announced the locations for 14 garden villages and bolstered affordable housing by stating that the first starter homes will be built across brownfield sites in 2017, through the first wave of 30 local authority partnerships established under the £1.2bn Starter Homes Land Fund.
It will be interesting to see how, if at all, the garden villages come forward.
The government had mentioned in the Autumn Statement that these schemes would have infrastructure funding but it is too early to know exactly how that would work.
The two key things to look out for are whether the garden villages will progress via dedicated delivery vehicles (perhaps as public-private joint ventures?) and how the “planning freedoms” the government mentioned will be used.
This is all about creating a “planning freedom zone” under section 154 of the Housing and Planning Act 2016, which allows local authorities to apply to the government to disapply planning provisions “to facilitate an increase in the amount of housing” in the area.
Starter homes need secondary regs
As for starter homes, operational details still need to be specified via secondary regulations. Therefore, there are many unknowns about how the starter homes regime will work. In the current market, the average private rents sit at about £750 a month outside London and the average rents in the affordable sector would therefore sit at around 80% of this figure - £600 a month. The London figure is about twice as much. In many cases this is still too expensive for low-income earners.
Those on smaller incomes are unlikely to be able to save a deposit and those with a small deposit may be required to pay higher interest rates on mortgages - in other words, lower-income earners would be priced out of the starter homes market.
It is quite possible there will be a significant fall in other types of housing provision.
Affordable renting may be the only option for low-income earners, particularly those who are not eligible for starter homes. However, there is a risk that the affordable rent stock may dramatically diminish.
With the expansion of Right to Buy to housing association properties and the proposed rent increase restrictions, there are doubts about the ability of housing associations and local authorities to build their own housing stock.
It is quite possible there will be a significant fall in other types of housing provision. The delivery of starter homes, as currently proposed, risks the delivery of affordable tenures such as rent-to-buy, when these are in fact a crucial part of the UK housing landscape.
With the housing white paper having been delayed further, the industry waits to see what joined-up forward thinking the paper demonstrates in order to bring about meaningful change to the planning and development industry across the UK.
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