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‘Too much uncertainty’ to create First Homes targets, says government
“Targets and dates” will not be set for the government’s First Homes initiative due to the level of uncertainty in the market and the scheme’s dependence on private housebuilding, a top government official has confirmed.
Speaking at a Public Accounts Committee meeting on Thursday, Jeremy Pocklington, permanent secretary at the Ministry of Housing, Communities and Local Government (MHCLG), said the department was “very consciously not setting targets and dates for First Homes at this point in time”.
He added: “There is too much uncertainty for us to be able to do that. You want to learn through the pilot programme that we are launching through the Affordable Homes Programme and ultimately, since this is part of the planning system, the amount of homes delivered will also depend on the volume of private housebuilding in the years ahead.”
First Homes, which involves new build homes being offered to first-time buyers at discounts up to a third of market price, was first announced by the government in February this year.
A 1,500-home pilot of the scheme will be launched as part of the new Affordable Homes Programme, which is set to begin next year.
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Beyond that, it is understood that First Homes will be funded through developer contributions made through the planning system.
The government recently proposed that 25% of all homes funded this way should be First Homes, leading to concerns from some in the social housing sector about potential losses for other affordable tenures.
During today’s committee hearing, Mr Pocklington was asked by MPs to confirm the difference between First Homes and Starter Homes, a David Cameron-era housing policy that saw zero homes built despite a target of 200,000.
In response, Mr Pocklington said: “First Homes are a different product and to an extent being delivered differently.
“You will recall the key reason no Starter Homes were ever built was because the secondary legislation was never laid.
“First Homes is a different product and we are going to implement that through the planning system primarily but also with a pilot being delivered through the Affordable Homes Programme.”
Mr Pocklington added that a key difference between the Starter Homes and the First Homes schemes are that the discounts offered on the latter with be “in perpetuity”, whereas the Starter Home discount “accrued to the homeowner”.
When asked whether start-up costs of the First Homes programme were a waste considering the similarities with Starter Homes, Mr Pocklington said: “I don’t think the start-up costs of the First Homes programme have been wasted. As I said this is a different programme, but what we are doing as a department is making sure that we are learning and continuing to use the expertise that we’ve built up over a number of years through other homeownership programmes, including Starter Homes.”
Earlier this year, the G15 group of large London housing associations warned it would collectively deliver up to 3,600 fewer affordable homes per year if the government pushes ahead with its First Homes policy.
At the same time, the National Housing Federation calculated that replacing affordable homes lost to the policy would cost an extra £1bn per year in grant.
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