I don't think anyone involved in housing disagrees with the Government's ambition to find a way of increasing the supply of housing in the UK to address the current shortage.  A lot has already been written about the Starter Home initiative and in this blog I don't intend to cover the rights or wrongs of what the Government is trying to achieve with this particular policy.  The question that I have been asking myself is whether or not this particular policy will help it achieve its publically stated objective to build a million homes by 2020.

Whilst it is possibly too early to say for certain, I am concerned by what I have read so far. A policy that sounded so simple when George Osborne stood in front of the dispatch box last July may not prove so straightforward to deliver.

A Statutory Instrument is expected to be issued in March for consultation on the Starter Homes proposal but the greatest risk based on what we know is whether it will simply add another layer of complexity to the planning process and in fact stifle the delivery of new homes.

To take an extreme example:  consider a London borough with a policy level of affordable housing of say 50% for a site, which has historically expected to see that allocation split 70% for social/affordable rented accommodation and 30% for intermediate housing.  I believe the Government's aspiration is for new schemes to provide 20% starter homes (although even here clarity is sought on the exact percentage), so is that 20% in addition to the 50% affordable housing already being sought or is it intended to be part of that 50%?

I believe the intention is for it to be the latter.  That helps to a degree, but still leaves the question as to what happens to the other 30% affordable housing the local authority requires in line with its policy.  Is that still expected to be shared 70%/30% between social/affordable rent and shared ownership housing?  The local authorities are presumably  going to be looking for the scheme to be policy compliant as they are no longer receiving the 50% affordable allocation that they were expecting while the developer will be arguing that they are providing 20% starter homes -  capped at £450,000 in London -  and that this will affect  the viability of the scheme.  Hence the confusion and uncertainty.

I do not believe that it is the Government's intention to over-complicate the viability process ( see previous blog on the Comprehensive Spending Review and viability) but there is a very distinct chance that unless greater clarity is provided in the Statutory Instrument then the Government could find itself walking into a trap of its own making and falling short on its ambitions. 

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