The announcement by the prime minister on starter homes and the change to the definition of affordable housing was a clear demonstration that the Conservatives are putting home ownership at the very top of their thinking (09.10.15).
From an industry perspective, there is a clear link between people’s ability to buy and builders’ ability to build.
Constraints have seen a long-term decline in the number of first-time buyers getting onto the housing ladder, but since 2008 the imbalance between supply and demand and the severe restrictions on mortgage finance in the aftermath of the crash have resulted in many young, working people - who in previous generations would have taken buying a home for granted - being unable to do so.
Over the past two years, the improving mortgage market and Help to Buy equity loan have led to an increase in demand, particularly for new homes, and supply has increased accordingly as housebuilders have been confident enough to invest more in the land and labour required to build additional homes.
Clearly there is a lot of detail about the starter homes scheme still to emerge. Who will specify the proportion of starter homes on a site? Will it be local authorities? To what degree will starter homes replace social and affordable rent? And will starter homes be required on sites that have no affordable housing requirement?
However, creating greater flexibility in terms of the definition of affordable housing certainly has the potential to speed up the process of securing an implementable planning permission and also make more sites viable for new housing.
This could in turn increase availability of homes of all types and help address the chronic shortage that has been allowed to develop, provided the new scheme is aimed at buyers who remain excluded from the market despite the improving conditions. It is also important to ensure it avoids competition either with Help to Buy or the secondhand market.
Clearly, getting the detail of the scheme right is critical. Housebuilders are committed to delivering high-quality, affordable homes for a new generation of first-time buyers, if the policy environment allows them to.
Stewart Baseley, executive chairman, Home Builders Federation