Housing and Planning Bill and the Starter Homes requirement – the debate continues
22nd April, 2016
The planning regime covering starter homes is set for change as the Housing and Planning Bill continues its passage through the Houses of Parliament.
The 3rd and 4th days of the report stage took place on Monday and Wednesday this week, with a 5th day being arranged for 25 April.
The starter homes provisions were considered on 13 April with, as previously reported, a number of key amendments being made.
What happens next?
Following the end of the report stage, a Bill which incorporates all agreed amendments will be printed and considered during the 3rd reading in the House of Lords (during which further amendments can be made).
Given that amendments have been made to the Bill, the Bill will be returned to the House of Commons after the 3rd reading for consideration of the amendments. The Bill will then go back and forth between the House of Commons and House of Lords until the wording of the Bill can be agreed (often likened to “ping pong”).
Unfortunately, there are no set timescales in relation to this process however. Assuming that wording can be agreed, the Bill will then proceed to Royal Assent.
Can we prepare for starter homes?
The Bill is limited to the basic provisions relating to starter homes and is absent of the specific detail regarding the delivery of the homes.
For example, there is no set percentage discount at which starter homes must be sold. The provisions only provide that they are “to be sold at a discount of at least 20% of the market value”. Regulations are therefore required to set out the detailed provisions, however the likely content of such regulations is currently unknown.
In the meantime, it is important to consider any requirements for starter homes when negotiating Options and Conditional Contracts in respect of new sites.
Viability assessments will need to cater for the potential future requirement to provide starter homes on site and, although the House of Lords have voted against the strict 20% on-site provision (in favour of a discretion for each Council), this may be a good starting point for these purposes.
It may be sensible, however, to take a cautious approach to the discount to be applied in light of the “at least 20%” wording as described above.
In addition, there is some difficulty in negotiating Section 106 Agreements relating to a site on which starter homes may become relevant or desirable in the future.
How can Ward Hadaway help?
It is likely that a Deed of Variation will be required once the detail of starter homes requirements is known, however, we could consider potential drafting options with you at this stage.
We would also expect that amendments may need to be made to the CIL relief provisions given that the relief for the onsite provision of affordable housing will not extend to starter homes in the form in which they are envisaged in the Bill. Therefore we expect it is likely that the changes will herald in further amendments to the CIL Regulations going forward.
At Ward Hadaway we have a dedicated team of planning lawyers who are very experienced in representing the interests of both public and private sectors in the housebuilding sector.
If you have any questions about the Housing and Planning Bill, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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