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First Homes to be incorporated into planning rules from next month

The government is to begin the process of incorporating First Homes into planning rules next month in a move that will see developers forced to deliver the tenure by the end of this year.

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Picture: Getty
Picture: Getty
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From 28 June national planning policy will state that a minimum of 25% of affordable homes secured through developer contributions should be First Homes #UKhousing

In a ministerial statement, housing minister Christopher Pincher confirmed that First Homes, a new tenure that will see new builds offered at a minimum discount of 30%, will be considered to meet the definition of affordable housing for planning purposes from 28 June 2021.

On this same date national planning policy will be amended to state that a minimum of 25% of all affordable homes secured through developer contributions should be First Homes.

This new requirement will not apply to sites with full or outline planning permission in place or determined before 28 December 2021, or 28 March 2022 if there has been “significant pre-application engagement”.

The government said local plans and development plans should take into account the new First Homes requirements from 28 June.

Transitional arrangements will be applied to local and neighbourhood plans that have been submitted for examination before 28 June, as well as those that have reached publication stage before 28 June, as long as they are submitted for examination before 28 December.

These plans will not need to reflect First Homes policy requirements, however the government said that “planning inspectors should consider through the examination whether a requirement for an early update of the local plan might be appropriate”.


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Meanwhile the government said that councils with local and neighbourhood plans that do not benefit from the transitional arrangements “should make clear how existing policies should be interpreted in the light of First Homes requirements using the most appropriate tool available to them”.

First Homes was first announced as a policy by the government in February last year.

The new tenure will see first-time buyers who earn below a certain income threshold offered discounts of between 30% and 50% on new build homes.

Councils will also be given the flexibility to implement additional eligibility criteria, such as requiring a local connection or prioritising key workers.

Leading housing associations have warned that the First Homes policy will lead to them developing fewer affordable homes per year as the planning requirements will force them to prioritise First Homes over other tenures such as affordable and social rent.

In the ministerial statement yesterday, the government said it expects councils to prioritise the social rent homes secured through developer contributions after the minimum 25% of First Homes has been accounted for.

The ministerial statement published yesterday revealed that shared ownership and affordable rent are most likely to be squeezed by the new policy, as a result.

It gave the following example of how the new rules should be applied: “If a local plan policy requires an affordable housing mix of 20% shared ownership units, 40% affordable rent units and 40% social rent units, a planning application compliant with national policy would deliver an affordable housing tenure mix of 25% First Homes and 40% social rent.

“The remainder (35%) would be split in line with the ratio set out in the local plan policy, which is 40% affordable rent to 20% shared ownership, or 2:1. 35% split in this way results in 12% shared ownership; and 23% affordable rent.”

Joshua Carson, head of policy at Blackstock Consulting, said that “not much changes” for developers as a result of the new policy, but that housing associations “are set to lose out on 25% of the total affordable provision on site”.

“This is because, in practical terms, developers usually sell off the portfolio of affordable housing on site to housing associations (who are not restricted in who takes up shared ownership and social rented homes), while First Homes are considerably more limited in who can purchase them,” he added.

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