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First Homes plan could put rural affordable housing at risk
The government has been warned that its new policy to deliver discounted homes on ‘exception sites’ in rural areas could see the wrong types of homes being built in the wrong places, and contribute to a reduction in much-needed affordable rural housing.
Landlords and campaign groups have said that the new First Homes policy announced by housing secretary Robert Jenrick last Friday, which included proposals to deliver these homes on exception sites, could lead to homes being built that are outside the reach of most rural dwellers.
The First Homes plan is a new government policy that would see new homes offered to first-time buyers at prices discounted by a third. The consultation released alongside the announcement estimated that 4,000 new homes a year could be delivered on exception sites.
There are two types of exception sites currently in use: rural exception sites and entry-level exception sites. Rural exception sites are small sites used to provide affordable housing for local people in rural areas. In 2018, ‘entry-level exception sites’ were also introduced and are aimed at providing sites for first-time buyer homes.
Sector groups fear that this could see rural exception sites squeezed out for entry level sites – resulting in a loss of rental products.
As part of the consultation, the government has proposed to “refocus” the entry-level approach and use it as a direct delivery vehicle for First Homes. This would ensure that the affordable housing element on these sites would be exclusively First Homes.
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However, the Campaign to Protect Rural England (CPRE) and Hastoe Housing Association, one of the biggest developers of homes on rural exception sites, have said that the demand for discounted homeownership would be low in rural areas.
Ulrike Maccariello, director of development at Hastoe, said: “I absolutely appreciate the push for homeownership from the government but we need to make sure local people can afford it.
“In our experience, the tenure most needed is rent and that needs to be social rent, as a lot of people can’t afford homes in high-value areas.”
She added that on average 70% of all homes delivered on Hastoe sites were for affordable rent, with the majority of these being social rent.
Paul Miner, strategic planning lead at the CPRE, said that relatively low wages and seasonal work in rural areas means homeownership is out of the reach of many.
Last year CPRE research found that the number of people classed as homeless and living in rural towns and villages had increased by 85%. This was almost double the national increase of 45%.
Mr Miner said: “This would strongly indicate the need for social rent in these areas.
“Average income is much lower than urban areas, and employment is seasonal and temporary. Even with discounted rates it will not be an appropriate route for those living and working in local areas.”
The consultation also called for a significant increase in the number of entry-level exception sites across the country.
Ms Maccariello said that this focus on entry-level exception sites would increase competition between entry-level and rural exception sites.
She said: “Land availability is the biggest hurdle for us. We were concerned about entry-level exception sites. “They are direct competition to rural exception sites, and if you have that competition, that pushes up land values.”
Mr Miner said that in areas such as Cornwall, where rural exception sites are particularly popular and successful, the move could be rejected.
“If there is a suggestion that these kinds of [rural exception site] developments were crowded out, or were more difficult to deliver, I could foresee a lot of resistance,” he said.
In the announcement last Friday, Mr Jenrick revealed that the First Homes policy would be funded through developers’ Section 106 contributions. Housing bodies raised concerns over this move, saying that it could drastically reduce the number of social homes being delivered as contributions for these tenures are channelled towards First Homes.
In 2018/19 there were 28,618 affordable homes delivered through contributions – 17,800 were for social and affordable rent tenures, while 10,300 were for shared ownership.
Mr 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% market discount rate – turning the dial on the dream of homeownership.”
