Sector expresses concerns as Government unveil ‘First Homes’ policy

CIH, NHF, Shelter and LGA  all warn of impact on affordable rental as government pitches plans to cut the cost of some new homes to encourage more people onto the property ladder.

Model house and calculator on a pile of money

CIH chief executive Gavin Smart has warned that the Government’s ‘First Homes’ policy can’t come at the expense of an affordable rented alternative.

While supporting the overall ambition of the initiative Smart said:“The planning system is currently a major mechanism for delivering new affordable homes for rent.

“If these proposals are implemented, the government must put in place alternative mechanisms and funding to support the continued provision of the affordable rented homes that are needed across the country.

Smart committed CIH to “responding in detail” to the related consultation.

As announced, First Homes lowers deposit and mortgage requirements for first time buyers.

CIH, NHF, Shelter and LGA  have warned of the impact on affordable rental.

Government says the discount “will be locked into the property to ensure more first-time buyers benefit in years to come”.

As part of the scheme, veterans will be prioritised, as well as frontline workers such as police, nurses, teachers and prison officers.

The scheme will apply the discount in perpetuity, so when the home is sold in years to come the new local buyer will be able to purchase it at a discount as well.

Government say the proposals could see tens of thousands of First Homes being built and include measures to help release more land.

These measures are to “rebalance the housing market”, say government, with latest figures showing the number of first-time buyers reaching 357,090 – an eleven-year annual high and an increase of 84% since 2010.

The measures follow on from the consultation into shared ownership changes and extending the Help to Buy scheme to 2023.

The government is now consulting on how the discounts will apply.

Housing Secretary, Robert Jenrick, said: “First Homes will be genuinely life-changing for people all over the country looking to buy their first home.

“I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. A proportion of new homes will be made available at a 30 per cent market discount rate – turning the dial on the dream of home ownership.

“The discount will be passed on with the sale of the property to future first-time buyers, helping thousands more people in years to come and ensuring local communities can stick together.”

But not everyone in the sector was welcoming of the new proposals.

Polly Neate, chief executive Shelter, said: “The country desperately needs more low cost homes which are genuinely affordable to those people who are struggling at the sharp end of the housing crisis.

“However instead of offering a route to building additional low cost homes this policy simply puts at risk the social homes currently being built.”

”When will this government realise that we need real investment in new low cost social homes, not another initiative which simply shuffles the deck chairs on the Titanic”

“If the government truly wants to get a handle on the housing emergency, and actually help those on low incomes level up, then it should use the upcoming budget to invest in a new generation of social housing to provide the homes we actually need.”

Kate Henderson, Chief Executive of the National Housing Federation, said: “We are concerned that this proposal could make it more difficult for housing associations and councils to provide homes for lower income families.

“We support efforts to increase home ownership, but not at the expense of building homes for those most in need.

“At present almost half of new affordable homes come through the planning system.

“If this proposal goes ahead, we will need to see a significant increase in government funding for genuinely affordable housing – this is the only way we will end homelessness and provide the homes local areas need.”

Cllr David Renard, housing spokesman at the Local Government Association, said: “Councils support measures to enable home ownership. It is important that this does not come at the expense of providing truly affordable homes for rent.

“Not everybody is ready to buy and we will be making the case in this consultation that local areas will need discretion on the number of First Homes required in new developments. This will allow councils to ensure a mix of homes – to rent and buy – are available and affordable to people that need them.

“A genuine renaissance in council housebuilding would increase housing supply, boost home ownership and reduce homelessness. The last time this country built homes at the scale that we need now was in the 1970s when councils built more than 40% of them.

“Councils were trusted to get on and build homes that their communities needed, and they delivered, and they can do so again.

“For that to happen, the Government needs to use the forthcoming Budget to reform Right to Buy, by allowing councils to keep receipts of homes sold under RTB in full and to have the flexibility to set discounts locally.”

Jonathan Seager, Place Executive Director, London First, said the Government would need to “move quickly” to demonstrate the First Homes scheme is deliverable.

“Previous attempts in this area have failed (and) First Homes will not tackle the primary driver of the UK’s housing crisis a lack of supply.

“The Budget provides the ideal opportunity for the Government to show it’s serious about building more homes by investing more money in housebuilding, making more land available and supporting better ways of building,” he said.

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