First Homes 

Back in 2019, the Conservative manifesto floated the idea of First Homes, but it is only now, after last summer’s consultation on ‘Changes to the current planning system’, that the Ministry of Housing Communities & Local Government (MHCLG) have announced they will indeed be launching the initiative.

So what exactly are First Homes?

To put it simply, they’re discounted market homes for first time buyers with a household income of below £80k (or £90k in Greater London)…concept sounding familiar? That’s because this isn’t the first time the conservatives have initiated a scheme like this. Starter Homes, launched back in 2015, offered the same hope to first time buyers, with a pledge to build 200,000 homes at 20 per cent discount. What a great idea…BUT…unfortunately the government failed to bring forward the necessary planning guidance to make these homes materialise and to date not a single Starter Home has been built.

So, the difference between Starter Homes and First Homes is this, unlike Starter Homes, the discount on First Homes would be a minimum of 30 per cent below market rate and held in perpetuity, which means the same reduction will have to be applied when the original purchaser decides to sell. Local authorities or neighbourhood groups can demand higher rates of discount, up to 50 per cent; however, they must demonstrate a local need through policy.

First Homes will be delivered as 25 per cent of the affordable housing requirement from each scheme (with some exceptions, such as purely affordable schemes, age restricted living and Build to Rent for example), delivered in the usual way, through S106. So, much like the current split between social and intermediate housing, now First Homes will be required to deliver a quarter of that overall affordable housing offer. Unlike Starter Homes, the delivery of First Homes has been brought within the planning system, so here’s hoping they’re more successful this time.

Initial reading of how this percentage tenure split will work is that the social rented proportion of your affordable housing delivery will remain unaffected (unless of course the council seeks more than 75 per cent socially rented units) and the 25 per cent tenure of First Homes will eat into the intermediate tenure offered. Local Authorities will need to revisit their housing need figures and work out how best to secure the mix of affordable homes they want…who knows how long that will take to unravel (details of the transitional arrangements below).

Interestingly, First Homes can also come forward as exception sites. Much like rural exception sites, First Homes can be supported on non-allocated entry level exception sites, sometimes supported by a small* provision of market housing. (*there is no agreed definition of small – with government stating local authorities are best placed to decide).

Additionally, unlike traditional exception sites that have to be limited to one ha, or five per cent of the size of the existing settlement, First Home Schemes will not be restricted by the same NPPF policies, opening up new opportunities. There are of course some rules relating to Areas of Outstanding Natural Beauty etc but certainly not as restrictive as the current exceptions sites requirements.

Transitional arrangements will apply when the new measures are introduced. The measures will be introduced via changes to national policy but no date has yet been set for this. The government said it will issue a written ministerial statement in “due course” and develop planning guidance on the requirements in the interim. 

Local or neighbourhood plans submitted for examination before the implementation of the policy, or that have reached the publication stage and are submitted for examination within six months of the implementation of the policy, will not need to reflect the First Homes requirements. Meanwhile, sites with full or outline planning permissions already in place or determined, or with a right to appeal against non-determination within six months of implementation of the policy, would also be exempt.

We are certainly looking forward to exploring the possibility of First Homes exceptions sites over the coming months and navigating the new policy to unlock land for our clients for development that otherwise wouldn’t meet the criteria – only time will tell how on board local authorities are with this approach!