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One in four affordable housing units from developer contributions to be First Homes
A minimum of 25% of all affordable housing units secured through developer contributions under Section 106 should be First Homes, the government has concluded following a consultation on the policy.
The government’s consultation summary document on the First Homes policy, which will see homes sold at least 30% below market rates, said that the 25% threshold “supports a smooth introduction of the First Homes scheme and appropriately balances delivery of First Homes with continued delivery of other tenures of affordable housing in the current market climate”.
The scheme, which was introduced by housing secretary Robert Jenrick in February this year, is aimed at first-time buyers, and a 1,500-home pilot of the scheme is included in the government’s Affordable Homes Programme.
A Ministry of Housing, Communities and Local Government spokesperson said that from today councils are able to begin delivering First Homes through their negotiations with developers on new sites.
“We have today launched a consultation to see how best to deliver these homes through developers’ contributions – the consultation runs for eight weeks and we will respond in due course,” they added.
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In a separate document consulting on current changes to the planning system the government said First Homes should replace as a priority other affordable homeownership products, including shared ownership.
“For instance, if a local plan policy requires an affordable housing mix of 20% shared ownerships units, 40% affordable rent units and 40% social rent units, a compliant application would deliver an affordable housing tenure mix of 25% First Homes, 37.5% affordable rent and 37.5% social rent,” the document reads.
In its First Homes consultation response, the government acknowledged that delivering First Homes through Section 106 will reduce the number of social and affordable rented homes built but suggested that these numbers will be “relatively small” compared with the number of First Homes delivered.
The G15 group of London’s largest social landlords previously warned that they will deliver nearly 4,000 fewer homes a year under the First Homes scheme.
The figure of 25% was settled on despite the consultation only offering options between 40% and 80%, with 54% of respondents choosing ‘other’ as the preferred option.
The government noted that 66% of local authorities and 71% of housing associations had concerns about the impact the scheme would have on build-to-rent, social rent and shared ownership products.
Update at 13:08 06/08/20: story was updated to include MHCLG’s confirmation that First Homes can be implemented from today.
