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Last week the Royal Assent was given to the Housing and Planning Bill, passing what has been one of the most highly contested pieces of legislation ever into law. The Queen’s Speech this week reiterated the government’s commitment to housing in the UK – particularly home ownership. 

The Housing and Planning Act reflects the extremely high level of demand for home ownership – 86% of people in the UK would rather own their own home than rent.

However, we are concerned that if the threshold for starter homes is set at 20% of a development, as proposed by the Government, this will be detrimental to the availability of other forms of affordable housing.

Delivery of affordable housing within development schemes nationally averages 25%. Inclusion of starter homes on every scheme at 20% would therefore mean that in many areas their affordable housing provision is almost entirely consumed by starter homes.

Some first-time buyers will be assisted by the starter homes proposals, which will enable them to receive a 20% discounted purchase. However, there will remain a large proportion of aspiring homeowners that will continue to be locked out of the market due to income and deposit requirements. Research from the Home Builders Federation report states that 73% of first-time buyers cite saving for a deposit as a main obstacle to home ownership.

Innovative low-cost home ownership products, such as our rent to buy model, uniquely overcome this barrier by enabling aspiring first-time buyers to save for a deposit through paying an affordable intermediate rent and receiving a gifted deposit of 10%.

If products like this were included within the starter homes requirement it would make a real difference to those aspiring home owners that cannot afford even a discounted purchase.

Complementary to the Government’s ambitions, this would ensure that the opportunity for home ownership is extended far more widely and local authorities are able to plan more inclusive mixed tenure communities.

With the Government turning its attention to the Neighbourhood Planning and Infrastructure Bill announced in the Queen’s Speech this week, it’s clear that increasing the supply of homes remains a top priority.

This new Bill will streamline the planning process and give local communities more control in the process of constructing new homes. This is something we support, as it should spur future development across the country. However, if the government doesn’t focus on affordability in this new bill or include affordable tenures within the definition of ‘starter homes’, we may still face a shortage of genuinely affordable homes.

Richard Connolly, CEO of Rentplus


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