Blake Morgan responds to Government Starter Homes consultation
Blake Morgan has today responded to the Department of Communities and Local Governments extended Consultation on the controversial Starter Homes initiative.
It is intended a Starter Home will be a new build property, sold at 80% of market value, with the balance 20% discount being repayable only, if the property is sold within a certain timeframe. If the Starter Home owner has not sold the property by the end of this period they, will be gifted the discount.
Our Key Recommendations are as follows:
- Starter Homes would provide better value if the 20% discount was not gifted but held in perpetuity under a shared equity scheme. Similar successful affordable housing schemes already exist, including Shared Ownership for Older Persons.
- As the Government has indicated in the Consultation Document they are unprepared to do this, any discount repayment period should be as long as possible.
- It will be difficult to enforce subletting restrictions, but these should carry extensive penalties, including requirement repayment of all or part of the discount.
- There should be a specific Starter Homes exemption for Housing Associations and their Group Companies developing land for the cross-subsidisation of affordable housing.
- In high value areas (including rural areas) where Starter Homes cannot be provided alternative forms of affordable housing such as Shared Ownership should be substituted.
- Extra Care developments should be exempt from both Starter Homes requirements and contributions as this could damage viability of these schemes.
- We do not agree that a 20% Starter Homes blanket requirement should be imposed nationally on all developments over 10 units or more than 0.5 hectares. We view this would significantly limit other forms of affordable housing (including affordable and social rent) that could be granted. We recognise however the Government's manifesto commitment to provide 200,000.00 Starter Homes by 2020, and by way of compromise suggest the ability for Local Planning Authorities to be able to review this threshold on a case by case basis to reflect local housing needs.
- We are concerned that there is a risk that Starter Homes will compete with traditional Housing Association affordable housing offerings, including Shared Ownership and Help to Buy Equity Loans. There is increased danger that Shared Ownership may become uncompetitive in the high to mid-range (50-75%) shares if, as has been suggested, Starter Homes may also qualify for Help to Buy Equity Loans. We have asked the Department of Communities of Local Government to clarify this.
Clearly response to the Consultation (which has been extended for an additional week until 27th May) will provide the Government with more questions than answers, but we hope that our views and those of the Housing Associations that we consulted are taken into consideration.