Housing minister signals softening of starter homes stance

Out-Law News | 22 Sep 2016 | 3:26 pm | 1 min. read

UK housing minister Gavin Barwell gave a conference speech last week in which he appeared to suggest that the government has shifted away from a narrow focus on helping first-time buyers onto the property ladder.

The Conservative general election manifesto included a pledge to deliver 200,000 'starter homes' by 2020, for sale to young first-time buyers at a 20% discount from market price.

The Housing and Planning Act gave the communities secretary the power to prevent councils from granting planning permission if they are not meeting starter homes requirements to be set by regulations.

The House of Lords attempted to add a clause to the Act allowing the starter homes requirement to be met through the delivery of alternative forms of affordable home ownership, depending on local needs. However, the then housing minister Brandon Lewis said the amendment would "totally undermine [the Conservatives Party's] manifesto commitment to build 200,000 starter homes by 2020".

Speaking last week at the RESI conference in Newport, south Wales, Gavin Barwell suggested that the government is now less focused on delivering discounted homes to buy at the expense of other forms of housing.

There's a little bit of a tension between the overall supply objective and measures specifically to help people onto the housing ladder," Barwell told the conference, according to reports. "We need to build more homes of every single type and not focus on one single tenure."

The minister said he would look at whether "we can have a wider range of products in terms of affordable housing".

He told delegates it was important to "have a good, thriving private rented sector" (PRS) and impressive recent growth in the bespoke rental market "must be expanded".

"A growing number of families and young professionals are choosing the PRS," said Barwell, "and while home ownership is still the goal for the majority, many will rent for some years before they buy."

Planning expert Ben Mansell of Pinsent Masons, the law firm behind Out-Law.com, said: "Starter Homes was greeted by a hesitant response by the property industry initially and it is likely to be welcome news that the government is edging away from this policy. Instead, more of an emphasis will be placed on developer-friendly PRS, which has thrived recently and will begin to bring significant additional supply to the market."

"A large number of large PRS developments have been granted planning consent over the last two years, such as ‘The Lexington’ in Liverpool, announced this week, which be Liverpool’s tallest residential tower and provide 304 apartments. Whilst this shift in emphasis may bring greater supply to the market, the first-time buyer issue will remain," Mansell said.