The Housing and Planning Bill becomes law
13th May, 2016
New plans affecting starter homes have today (Friday May 13) been granted Royal Assent as a part of the Housing and Planning Bill.
What is changing?
As we explained in a previous newsflash the Government is looking to introduce Starter Homes as new affordable housing products which first-time buyers can purchase at a discount of at least 20% on the market value.
There has been much to-ing and fro-ing between the House of Commons and the House of Lords over the precise details of Starter Homes. The final position sees the House of Commons inserting provisions providing flexibility for regulations to set out restrictions on the sale of Starter Homes. The Lords’ proposals to taper the 20% discount over a 20 year period have been watered down.
How will the Starter Homes programme work?
Unfortunately, the detailed mechanisms for the on-site provision of starter homes are not set out in the Housing and Planning Act 2016 and therefore secondary legislation will be key to understand how Starter Homes will work in practice.
There are certain important changes that both buyers and sellers of housing sites will need to bear in mind both in terms of how a deal may be structured and how section 106 obligations should be drafted.
The Government is currently consulting upon the details for the delivery of Starter Homes and responses are invited by 18 May.
The Bill hits the statute books today (Friday) with provisions on Starter Homes set to come into effect once the Secretary of State has issued a commencement order.
What else has happened in the housebuilding sector this week?
The Government won a victory in its plans to allow developers to waive the need to build affordable housing or make a contribution to affordable housing on sites with 10 houses or fewer or with an area of 1,000 sq m or less.
The Court of Appeal overturned a High Court ruling which had declared that introducing such a policy as part of a Written Ministerial Statement was unlawful.
The ruling will result in the reinstatement of the vacant building credit, which allows developers to set off the area of a building which they have brought back into use or demolished for redevelopment against affordable housing requirements of the scheme (whether by way of payments or on-site provision).
What does this mean for me?
There has been a period of uncertainty during this legal dispute and, in our experience, a number of Local Authorities have been requiring affordable housing contributions on small sites and at times have been unwilling to take account of the re-use of vacant buildings in the interim.
Following the Court of Appeal ruling, this approach may no longer be sustainable.
How can Ward Hadaway help?
If you would like further advice on either of these developments and how they may affect proposals for new housing going forward, please get in touch with our property and planning teams in order that we can help you to negotiate a better solution for the delivery of housing from your sites.
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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