The Starter Home Initiative

This initiatve was launched earlier last year as a means of kick starting the availability of starter homes for people under 40. The idea is that it would help release sites on unviable or underused commericial and industrial sites, commonly known as "brownfield land". Unlike other intiatives to stimulate house building such as "Help to Buy" this proposal makes changes to the underlying planning system to allow these sites to be brought forward for development.

Developing brownfield sites isn't new and they still remains large areas of brownfield land,  enough for over 200,000 houses. It is very likely that some of these sites may already have planning permission. What is a challenge though is making these sites economically viable. On some sites the legacy industrial uses can be expensive to clean up and when you add to that the requirements for afforadable housing, S106 contributions and the Community Infrastructure Levy (CIL) so I am sure some sites will fall by the wayside. There are others though where remediation can be achieved but other costs could still make the scheme unviable. 

You therefore have to hope that the emerging regulations are clear and that developers and landowners are not burdened with costs that prevent schemes progressing. For example an affordable requirement or the addition of CIL could tip the balance. Afterall the starter homes have to be made availabe at 20% below market value subject to a cap of £250k for the UK except London where it is £350k. 

I feel that you need to add to this land owner expectations, they are key to this happening. Historically we have seen good residential land fetch above £1m/acre and sometimes more. For this scheme to work it appears that everyone will have to accept a little bit less. The planning authority may have to make concessions, the developer may have to work to a lower margin and the landowner may have to accept a lower price. The result of this could be that these brownfield sites are better suited to regional and local builders. In addition to all of the the above we also have to strive to build good quality homes, buiulding costs will though also be under pressure.

I can forsee that this initiative will also weed out some additional sites. There will be commercial/industrial sites which are currently marginal but potentially in interesting locations. I can think of a few sites in the construction materials sector (eg old concrete products sites) which may have potential. Some of these will be in Greenbelt and I understand that these sites won't be ruled out.

There will be a lot to iron out. Similar to converting old farm buildings to residential it hasn't in many cases been starightforward. I know of a couple of cases that the planners have refused or resisted development because they are not "sustainable locations". Farms being in the countryside generally aren't going to fulfill this requirement and I don't believe that this should be a reason to refuse permssion.

Regulations are still being drafted and as they say the "devil is in the detail", lets hope it actually results in some new houses.