In the Autumn of last year, the Government laid ‘The Housing and Planning Bill 2015’ before Parliament, setting out how it will deliver its housing commitments in England over the next five years, as put forward in the Conservative Party manifesto and the summer’s Productivity Plan.
The Bill addresses a range of housing related subjects – from planning legislation to housing growth plans – and, when enacted sometime in late Spring / early Summer 2016, we expect it will impact a significant number of issues affecting Taylor Wimpey and the house building industry as a whole, including changes to the planning system, and the introduction of a new initiative known as ‘Starter Homes’
The planning changes proposed in the Bill are positive, and are mainly focused on simplifying the planning system and helping it to run more smoothly, particularly in relation to local plans, which outline allocations for future housing sites.
However, we, together with the wider industry, are eagerly awaiting more information to be released by the Government about Starter Homes, as there is currently very little detail available about the initiative.
As part of the Bill, the Starter Homes scheme forms a significant part of the Government’s commitment to increase the level of affordable homes to buy rather than to rent. To deliver on this commitment the Government has set a target of 200,000 Starter Homes by 2020.
What we know so far is that a Starter Home is a new build home which is to be delivered on all “reasonably sized housing sites”, likely to mean sites of 10 homes or more. The homes are intended to be available to first time buyers under the age of 40 and are to be sold at a minimum of 20% discount to the open market price. These homes, which are to be retained for a minimum of five years by the initial purchaser, will have a price cap, after discount, of £250,000 (outside London) and £450,000 (Greater London).
We understand that Starter Homes are intended to be delivered through the Section 106 planning obligations, which are legal agreements between a housebuilder and a local authority, and are the means by which Taylor Wimpey currently delivers affordable housing and supporting infrastructure such as schools and road improvements on our sites.
Given the scale of the Government’s housing commitments over the next five years, we can expect that Starter Homes, as well as the wider Bill, will continue to be considerable topics of discussion across the industry well into 2016; and we will monitor these developments closely.