Source · Select Committees · Public Accounts Committee
Thirty-first Report - Starter Homes
Public Accounts Committee
HC 88
Published 9 December 2020
Recommendations
10
We have previously challenged the Department on its detailed plans and projections for how it...
Recommendation
We have previously challenged the Department on its detailed plans and projections for how it would achieve its target of building 300,000 new homes per year by the mid- 2020s, most recently in our report Planning and the broken housing …
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HM Treasury
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Conclusions (19)
2
Conclusion
The Department’s reliance on developer contributions to fund First Homes is a complex mechanism lacking transparency and risks less money being available to local authorities for housing and infrastructure. First Homes differ from Starter Homes as they will be sold at a higher discount, only to local first-time buyers, and …
3
Conclusion
We are disappointed that the Department remains unable or unwilling to clarify how it will achieve its ambition of 300,000 new homes per year by the mid-2020s. We are wearily familiar with the Department’s lack of clarity over how it intends to meet its ambition—not target—of 300,000 new homes per …
4
Conclusion
We welcome Homes England’s commitment to provide us with regular updates on its progress delivering affordable housing, but we are concerned that it and the Department has yet to clarify what ‘affordable’ actually means, and how much it costs to deliver affordable housing. The Department claims that ‘affordable’ means different …
5
Conclusion
The long-term success of the Department’s housing policies depends on it being able to engage effectively with organisations across the housing sector and provide clarity on funding, without losing sight of the needs of those who are unlikely to be able to buy or rent their own home without support. …
1
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Housing, Communities & Local Government (the Department) about its Starter Homes policy and other policies that aim to support people who need help to secure a home.1
40
Conclusion
The November 2015 Spending Review provided £2.3 billion to support the delivery of 60,000 of these planned homes.4 From 2015, the Home Builders Federation administered a register of people interested in buying a Starter Home, on behalf of the Department.5
6
Conclusion
Homes England forecasts that around 36% of homes (2,370 of the total 6,600 planned homes) built on the land remediated through funding intended for Starter Homes will meet the definition of affordable housing.16 We were concerned though that funding intended to support first-time buyers will in fact result in so …
7
Conclusion
We asked the Department about the similarities between the new First Homes policy and the Starter Homes policy. The Department emphasised how they differ: • First Homes will be sold at a higher discount of at least 30%, compared with 20% for Starter Homes; • the discount will exist in …
8
Conclusion
The Department told us that this was not going to be a quick policy to implement and it did not yet have a timetable for implementing First Homes or a target for how many it wants built.21 It explained that it was planning a pilot to build 1,500 First Homes …
9
Conclusion
The Department explained that the First Homes discount will be funded through contributions from developers.24 Local authorities will be expected to ensure 25% of affordable homes built by developers contribute to the First Homes initiative.25 However, we have previously criticised approaches which rely on developer contributions—the Community Infrastructure Levy and …
11
Conclusion
We were disappointed that the Department remained unwilling to clarify how it will achieve this rate of building, which it now refers to as an ambition rather than a target. We asked why it thought that there should not be greater transparency about how it would achieve 300,000 new homes …
12
Conclusion
The Department explained how its reforms to the planning system were intended to speed up building and, through increasing certainty with the system, encourage more small and medium-sized developers to build homes. It told us that it was also looking to encourage a greater range and variety of homes on …
13
Conclusion
We asked the Department what it now meant when it referred to ‘affordable’ housing, particularly in relation to the funding originally intended for Starter Homes that was subsequently redirected to a broader range of housing, including affordable homes.33 The 28 PAC’s Report, para 1 29 Q 68, HM Treasury, Government …
14
Conclusion
Homes England told us that the number and proportion of affordable homes planned for the sites intended for Starter Homes has increased from 1,700 (29%) to 2,370 (36%), reflecting an increased focus on affordable housing.37 However, Homes England was unable to tell us how much each affordable home on these …
15
Conclusion
First Homes, and previously Starter Homes, are aimed at people who want to own their own home and have an income, as the schemes require applicants to raise a mortgage. They are not schemes intended to help house people in temporary accommodation or who are homeless. We asked the Department …
16
Conclusion
The Department and Homes England told that they were trying to encourage the building of smaller, cheaper homes through investing in firms that build modular homes and encouraging sites with high levels of modular construction. It explained it was looking to increase demand for this type of home. However, Homes …
17
Conclusion
We asked the Department how it would ensure that its approach delivered the right kind of homes in the right places.44 We heard from the Department about a range of other actions it is pursuing: • It wants its planning reforms to encourage more small and medium-sized developers to be …
18
Conclusion
We queried why student accommodation and converted offices count, in the Department’s statistics, as new housing when student accommodation is not necessarily a permanent home, and many office conversions are tiny, lack proper insulation, and could not be said to constitute a home. The Department countered that student accommodation relieved …
19
Conclusion
Homes England recognised that success in delivering housing would rely on close working with local authorities, good relationships with developers and mindfulness over land value as the key determinant of delivery and maximising value for money from public subsidy of housing.50 We asked the Department about its plan for long-term …