{"id":66811,"date":"2019-11-05T14:00:23","date_gmt":"2019-11-05T14:00:23","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=66811"},"modified":"2019-11-05T14:00:23","modified_gmt":"2019-11-05T14:00:23","slug":"zero-starter-homes","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/zero-starter-homes\/66811\/","title":{"rendered":"Government fails to build any starter homes, says NAO"},"content":{"rendered":"

The Conservative Government has failed to build a single \u2018Starter Home\u2019 despite pledging to build 200,000 by 2020, according to the National Audit Office<\/a> (NAO)<\/h2>\n

The National Audit Office (NAO) undertook an investigation with the aim of establishing the status of Starter Homes policy and legislation; and the impact of the MHCLG’s investment in Starter Homes.<\/span><\/p>\n

Within the Conservative’s 2015 manifesto they committed to building 200,000 starter homes across England to be sold exclusively to first-time buyers under the age of 40.<\/p>\n

To date, no such homes have been built because the government has not activated all of the necessary legislation or budgeted for them, according to the NAO.<\/p>\n

The MHCLG<\/a> previously stated that its <\/span>overarching objective for new housing in England is to \u201csupport the delivery of a <\/span>million homes by the end of 2020<\/a> and half a million more by the end of 2022 and put <\/span>us on track to deliver 300,000 net additional homes a year on average.”<\/span><\/p>\n

Since 2015, <\/span>the number of new homes built has grown year on year but remains lower than in the <\/span>1980s (Figure 1).<\/span><\/p>\n

\"\"
Figure 1<\/figcaption><\/figure>\n

The ambition to deliver 300,000 net additional homes is supported by an extensive <\/span>and complex array of policies (Figure 2), many of which pre-date <\/span>this Parliament and have been carried over from previous housing programmes.<\/span><\/p>\n

The programme to create Starter Homes is one of these and was first publicised in 2014. <\/span><\/p>\n

Starter Homes<\/span><\/h3>\n

In April 2015, the Conservative Party manifesto committed to \u201c200,000 Starter <\/span>Homes, which will be sold at a 20% discount and will be built exclusively for first-time <\/span>buyers under the age of 40.”<\/span><\/p>\n

The November 2015 Spending Review subsequently <\/span>provided \u00a32.3bn to support the delivery of 60,000 Starter Homes (of the 200,000 <\/span>previously announced). The Housing and Planning Act (2016) set out the legislative <\/span>framework for Starter Homes and MHCLG ran a consultation on Starter Homes <\/span>Regulations (the regulations) between March and June 2016.<\/span><\/p>\n

Between 2015 and 2018, government\u2019s policy towards Starter Homes shifted.<\/span><\/p>\n

In May 2018, the Minister of State for Housing and Planning stated that the government <\/span>had spent an estimated \u00a3250m of the Starter Homes Land Fund. In July 2018, <\/span>the MHCLG clarified that it had spent \u00a3250m buying land to build affordable <\/span>properties from two funds, the Starter Homes Land Fund and the Land Assembly Fund, <\/span>with work underway to get the land ready for development, but that building had not <\/span>yet started.<\/span><\/p>\n

\"\"
Figure 2<\/figcaption><\/figure>\n
\"\"
Figure 2 Cont.<\/figcaption><\/figure>\n

The concept of Starter Homes was first introduced at the Conservative Party <\/a><\/span>conference in September 2014 by the Prime Minister. Figure 3 <\/span>provides a timeline of key events in the development of Starter Homes policy and legislation.<\/span><\/p>\n

\"\"
Figure 3<\/figcaption><\/figure>\n
\"\"
Figure 4<\/figcaption><\/figure>\n

The impact of MHCLG’s investment s<\/span>ince 2014-15<\/span>\u00a0and its agencies have financed preparations for Starter Homes <\/span>through three main sources of funding (Figure 4).<\/span><\/p>\n

Starter Homes 2015 funding<\/span><\/h3>\n

In August 2015, MHCLG announced the first Starter Homes funding package <\/span>of \u00a326m. The funding was to be used by the Homes and Communities Agency <\/span>(now Homes England<\/a>) to identify and purchase sites, particularly underused brownfield <\/span>sites, and prepare them for Starter Homes to be started in 2016-17 and 2017-18. Money <\/span>from the sale of these sites to developers would be returned to the MHCLG.<\/span><\/p>\n

In 2015-16, Homes England spent \u00a315.4m of this funding on the acquisition <\/span>of seven sites and the preparation and remediation of these and four existing sites, <\/span>as well as changing planning consents to allow housebuilding on the sites (for example, <\/span>changing planning permission from a commercial development to a residential one).<\/span><\/p>\n

The remaining \u00a310.6m was returned to HM Treasury at the end of 2015-16.<\/span><\/p>\n

MHCLG told the NAO that the full funding was not spent because of difficulties <\/span>identifying sites for purchase within the limited time available (August 2015 to March 2016).<\/span><\/p>\n

Homes England is forecasting that its total spending will result in 379 new homes. <\/span>Only 26% of these new homes (98) are expected to meet the definition of affordable <\/span>housing, with the remaining 281 expected to be sold at market rates (Figure 5).<\/span><\/p>\n

\"\"
Figure 5<\/figcaption><\/figure>\n

Current forecasts by local authorities indicate that the programme will create <\/span>366 new homes outside London, of which 296 are expected to be affordable housing, <\/span>and 78 in the London Borough of Barking and Dagenham, all of which are expected <\/span>to be affordable housing. The total spend therefore equates to around \u00a314,500 per <\/span>home. Overall, 84% of homes built are expected to meet the definition of affordable <\/span>housing (Figure 6).<\/span><\/p>\n

\"\"
Figure 5<\/figcaption><\/figure>\n

Starter Homes Land Fund<\/span><\/h3>\n

The 2015 Autumn Budget announced \u00a31.2bn for the SHLF, a funding envelope <\/span>that was intended to last multiple years. The aim of the SHLF was to support the <\/span>acquisition and remediation of suitable land for Starter Homes developments that could <\/span>then be built by developers by 2020. Over 2016-17 and 2017-18, MHCLG spent <\/span>\u00a3151m from the SHLF. Homes England spent a further \u00a30.8m from the SHLF <\/span>on de-risking sites purchased through the original Starter Homes 2015 funding.<\/span><\/p>\n

MHCLG forecasts that the SHLF will create 5,175 new homes, a quarter <\/span>(1,268) of which will meet the definition of affordable housing (Figure 7). However, without <\/span>the necessary secondary legislation these homes cannot be marketed as Starter Homes.<\/span><\/p>\n

The SHLF ended in March 2018. By July 2019, MHCLG had spent a <\/span>further \u00a319m on remediation of sites acquired under the SHLF, and forecasts that <\/span>an additional \u00a315m will be spent on the sites before they are disposed of, with the <\/span>funding drawn from the Single Land Programme and the Land Assembly Fund (LAF).<\/span><\/p>\n

MHCLG is forecasting receipts of \u00a3137.2m from the onward sale of land <\/span>purchased under the SHLF. This would leave a net cost to the taxpayer of \u00a347.8m.<\/span><\/p>\n

Net of estimated receipts, Homes England\u2019s forecast spend equates to around <\/span>\u00a39,200 per home. At 31 March 2019, MHCLG had received \u00a38.9m of this <\/span>expected income. <\/span><\/p>\n

\"\"
Figure 7<\/figcaption><\/figure>\n

Read the full report here<\/a>.<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

The Conservative Government has failed to build a single \u2018Starter Home\u2019 despite pledging to build 200,000 by 2020, according to the National Audit Office 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