The Housing & Planning Bill: Starter Homes

The Government’s proposed new legislation aimed at boosting house building and reforming the planning system - the Housing & Planning Bill – has now passed through the House of Commons and is currently under scrutiny in the House of Lords. While the provisions impacting on social housing have perhaps attracted the most commentary, other key areas covered by the Bill include house building, tackling rogue landlords and agents, rentcharges, planning reform and speeding up compulsory purchase.

The Bill in its current form will see the introduction and promotion of new-build ‘starter homes’ for first time buyers under the age of 40. These houses will be discounted to at least 20% below market value and will have to fall below a price cap (£250,000, rising to £450,000 in Greater London).

Planning authorities will have to promote the supply of starter homes in England and must have regard to guidance given by the Secretary of State, who can also pass regulations preventing the grant of planning permission for residential developments if the starter homes requirement is not met. The Secretary of State may also make regulations stating that planning permission will only be granted if a developer has entered into a planning obligation (under s106) to build a certain number of starter homes on a development, or pay the local authority a sum to provide such homes.

The Bill has received its second reading in the House of Lords and enters the committee stage in early March 2016. Unfortunately much of the detail as to how the provisions of the Bill will work in practice will be determined by the regulations, which have not yet been published in draft form but are keenly awaited by professionals in both the housing and development sectors.