Budget 2016: Starter homes prospectus launched for brownfield land

There weren’t too many fireworks in the budget for housing, but a series of measures to shore up and implement previously announced policy – including kick starting the Starter Homes initiative and expanding the Garden cities initiative. The headline grabber was around helping homelessness with £110m to tackle the problem on a number of fronts. Key points around housing in the budget were:

•Private Rented Sector (PRS) Guarantee – The government will extend the PRS guarantee scheme until December 2017 to encourage long term institutional investment in the private rented sector.

•Starter Homes – The government launched the Starter Homes Land Fund prospectus today. This prospectus invites Local Authorities to access the £1.2 billion of funding to remediate brownfield land to deliver Starter Homes.

•Help to Buy - Shared Ownership – The government will launch the Help to Buy: Shared Ownership Prospectus in April. The prospectus will invite private developers to come forward and bid for funding to build Shared Ownership homes.

•Local Authority land – Local Authorities will collaborate with central government on a local government land ambition, working with their partners to release land with capacity for at least 160,000 homes, helping to support the government’s policy of regenerating council housing estates. The government will continue to work with the sector to look for opportunities to go further, with a view to raising the ambition.

•Homelessness – Government intends to invest £100 million to deliver low-cost ‘second stage’ accommodation places for rough sleepers leaving hostel accommodation and domestic abuse victims and their families moving on from refuges. It will also 

•invest £10 million over two years in initiatives to support and scale-up innovative ways to prevent and reduce rough sleeping, particularly in London.

Planning and land:

•The Government says it also wants to drive more house building by streamlining the planning system and has set out an intention to move to a more zonal and ‘red line’ planning approach, where local authorities use their local plans to signal their development strategy from the outset and make maximum use of permission in principle, to give early certainty and reduce the number of stages developers must go through to get planning permission

•The Budget announces that the government will legislate to make it easier for local authorities to work together to create new garden towns, as well as consult on a second wave of Compulsory Purchase Order (CPO) reforms with the objective of making the CPO process clearer, fairer and quicker.

•For areas that want to establish smaller settlements, the government will provide technical and financial support to areas that want to establish garden villages and market towns of between 1,500 to 10,000 homes. The government will shortly announce what planning and financial flexibilities will be offered to local authorities that submit proposals for settlements that deliver a significant number of additional houses.

•As part of the government’s commitment to support home ownership and first-time buyers, the Autumn Statement 2015 announced that from 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) will apply to purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates will be 3 percentage points above the current SDLT rates and will apply to purchases of additional residential properties in England, Wales and Northern Ireland.

•The government will provide £60 million of the additional receipts from higher rates on additional residential properties to enable community-led housing developments, including through Community Land Trusts, in rural and coastal communities where the impact of second homes is particularly acute.

Reaction to measures in the budget have been muted.

Responding to today's Budget, CIH chief executive Terrie Alafat said: "CIH has been calling for more measures to address homelessness and rough sleeping and today's announcement of an investment of £115 million to tackle rough sleeping is good news.

She continued: "It will go some way to supporting vulnerable people who need a home and we hope it marks the start of more action to come to end homelessness in this country. Homelessness is increasing and we would like to see additional investment in services to prevent homelessness and in more affordable housing."

Adam Challis head of Residential Research at JLL commented: “New Stamp Duty changes will impact large investors without exemption. This is an extraordinary lost opportunity to support the growth of Build to Rent and undermines this nascent sector. Private renters have once again been overlooked.”

In relation to Garden Suburbs, he added: “Garden suburbs are a more practical, deliverable approach to solving the UK’s housing crisis than the wholesale Garden City. The programme will need a lot of engagement with local communities if it is to be welcomed but could be a big step in the right direction.”