Tuesday, 17 January 2017

Government to buy sites for Starter Homes

The government is planning to buy sites on the open market for new Starter Homes, as well as eventually offering direct grant funding to developers to build them.

Inside Housing can reveal details of the government’s current plans for £2.3bn of public funding to build 60,000 Starter Homes by 2020, ahead of a public consultation.

The government has already announced its plans to use £1.2bn of the funding to “prepare brownfield sites” for the development of the homes, which will be sold to first-time buyers at 80% of market value.

Sources close to the policy development process said the plans involve the government directly purchasing new land, before making it ready for development, securing outline permission and selling it to developers.

Directly purchasing land for development would mark a further escalation of the state’s direct involvement in the housing market, following direct commissioning announcements last month.

One major house builder said: “I think it would be an extremely sensible move. There are examples of public bodies buying up land before which have worked well.”

It is understood the remaining cash will be used to help provide Starter Homes on exception sites, which are given special freedom from normal planning restrictions, and as grant.

The consultation, which will be published by the Department for Communities and Local Government (DCLG), will set quotas of Starter Homes to be included on all developments in place of traditional affordable housing.

A figure of 15% being built as Starter Homes has been briefed to some stakeholders.

It is understood that after the quota has been met, the rest of the homes delivered through affordable housing planning requirements can be for other affordable tenures.

The government confirmed percentages would be determined through the consultation, but said 15% is not yet set.

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