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London council rejects government’s First Homes policy
A council in London has decided not to adopt the government’s national policy for the implementation of First Homes, as it says the initiative will “not be affordable to median-income residents”.
Camden Council passed a planning statement at a meeting of its cabinet last week, confirming that it “will not seek the delivery of First Homes in Camden”.
Priority will instead be given to development delivering social rent, London Affordable Rent and intermediate rent, the statement says.
First Homes is a policy the government announced ahead of the 2019 election that will offer homes to first-time buyers at a discount of at least 30%.
The government is currently piloting First Homes through its Affordable Homes Programme. In June last year, the government amended its national planning policy to state that at least 25% of affordable homes delivered through the planning system should be First Homes.
However, the national planning policy said that councils have some flexibility to vary aspects of the First Homes policy, such as the level of discount or the eligibility criteria for potential buyers.
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In its planning statement, which is intended to give clarity to developers over how the council makes planning decisions, Camden said it will “not seek the inclusion of First Homes in developments in the borough”.
It reaffirms the council’s commitment to its existing affordable housing policy, which aims for 60% of the affordable homes delivered through planning to be social rent and London Affordable Rent, and 40% to be intermediate rent housing.
Any First Homes that are delivered should only ever be delivered in place of a proportion of intermediate rent housing, not social rent, but will be given less weight than intermediate rent when the council is balancing “the benefit and harm arising from a development”, it said.
The council is also setting the minimum discount for First Homes in Camden at 50%, to “reflect the extremely high price of homes relative to local incomes”.
It said it has let over 130 intermediate rent homes under its current Intermediate Housing Strategy, more than half of which have gone to households with incomes between £30,000 and £40,000 per year.
The council estimates that a typical purchaser would need a single income of at least £70,000, or a joint income of £90,000, per year to be eligible for a First Home, based on the maximum discounted price of £420,000 allowed for the scheme in London.
The vast majority of households on the council’s intermediate housing register would have “little to no prospect of affording First Homes in Camden”, the local authority said.
Camden made its decision after a consultation exercise, which saw the council’s proposals receive support from an unnamed affordable housing provider and the Greater London Authority.
Danny Beales, cabinet member for investing in communities, culture and an inclusive economy at the Council, said: “Camden is at the sharp end of the housing crisis. To maintain our important mixed communities we need to urgently deliver more genuinely affordable homes for our residents."
He added: "Our updated guidance makes it clear that we are not seeking First Homes and are continuing to prioritise the delivery of affordable housing at rents related to local incomes. If we are serious about tackling the housing crisis, genuinely affordable homes to rent must be our priority in areas like Camden.”
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