First Homes Consultation Paper

First Homes Consultation Paper

18 Feb 12:00 by Colin Ingram-Moore


In their recent consultation paper (February 2020) the Government shows a preference for legislating for a fixed percentage of First Homes units in new developments. This will allow first-time buyers to purchase market value homes at a discount of 30% or above.

Interestingly the government recommends that this would be held in perpetuity meaning the same reduction will have to be applied when the original purchaser onward sells the property. We think this is a step forward from the disastrous Starter Homes initiative which . . . never got started! 

The Government is not yet showing a preference for implementing this through a s106 obligation or a fixed quota outside the s106. Either way the Government seems determined to make this work and to increase home ownership. There seems to be a clear dilemma here: 

  • Do they focus on increasing home ownership or delivering on social housing commitments? 

  • Will the Starter Home policy result in a squeeze on affordable housing levels as inevitably it will have a direct impact on viability? A development can only contribute so much before the scheme becomes unviable and other types of affordable housing get squeezed out. 

The government is suggesting an olive branch might be to exempt Starter Homes from Community Infrastructure Levy (CIL) as other discounted market sale products can already be exempted.  

Other comments include local people to get first refusal, perhaps focusing on key workers, and for First Homes to be restricted to the purchasers sole or primary residence. 

It will be interesting to see the reaction to the consultation paper particularly from councils and housing associations, but we expect to see the government pushing on with this policy quickly to ensure their manifesto pledge is implemented this time. ​

Image courtesy of Blake Wheeler on Unsplash