UK Inquiry Tracker

Starter Homes

Public Accounts Committee Closed Inquiry

Opened: 17 Sep 2020 Closed: 25 Mar 2021 Parliament page

In April 2015, the Conservative Party manifesto committed to “200,000 Starter Homes, which will be sold at a 20% discount and will be built exclusively for first-time buyers under the age of 40”. The November 2015 Spending Review subsequently provided £2.3 billion to support the delivery of 60,000 Starter Homes, … Read more In April 2015, the Conservative Party manifesto committed to “200,000 Starter Homes, which will be sold at a 20% discount and will be built exclusively for first-time buyers under the age of 40”. The November 2015 Spending Review subsequently provided £2.3 billion to support the delivery of 60,000 Starter Homes, of the 200,000 previously announced. Between 2015 and 2018, government’s policy towards Starter Homes shifted. In May 2018, the Minister of State for Housing and Planning stated that the government had spent an estimated £250 million of the Starter Homes Land Fund, but in July 2018, the Ministry of Housing, Communities & Local Government (MHCLG) clarified that it had spent £250 million buying land to build affordable properties from two funds, the Starter Homes Land Fund and the Land Assembly Fund, with work under way to get the land ready for development, but that building had not yet started – and not one home has yet been built. The Government now has an “ambition” to build 300,000 new homes a year from the mid-2020s – but despite the hundreds of millions of pounds spent, the fate of the 200,000 Starter Homes pledged in the 2015 Conservative manifesto is unclear. Key findings of the NAO report on the Starter Homes project : - No Starter Homes have been built to date. The funding originally intended for Starter Homes has instead been spent on acquiring and preparing brownfield sites for housing more generally, some of which is expected to be affordable housing - MHCLG expected to introduce the legislation and planning guidance required for Starter Homes in 2019 but it is yet to lay the regulations in Parliament. - The Department no longer has a budget dedicated to the delivery of Starter Homes. After the 2015 manifesto pledge, the housing white paper in 2017 shifted housing policy. The original target of 200,000 Starter Homes morphed into a target to help 200,000 households into home ownership through a range of government-backed schemes. - The November 2017 Autumn Budget reallocated the funding earmarked for Starter Homes to the £9 billion Shared Ownership and Affordable Homes Programme and the Land Assembly Fund (LAF). - Between 2015-16 and 2017-18, the Department spent almost £174 million preparing sites originally intended for building Starter Homes – though no Starter Homes have been built on that land. In 2016-17 and 2017-18, the Department spent £151 million under the Starter Homes Land Fund (SHLF), but that spending also has not supported the building of Starter Homes. Instead, the Department used the SHLF to acquire and remediate suitable land, to then sell on to developers. In July of this year, after the UK’s Covid lockdown exposed and exacerbated the shortage of affordable housing in the UK, the Government announced new, sweeping reforms to the building planning regulations. It is not clear how this impacts or interacts with the Government’s previous targets, allocated and re-allocated, and spent funding, intended to build affordable new homes. In October, the Committee will question senior MHCLG officials on what is happening with plans to address the affordable housing crisis. If you have evidence on the issues raised in this inquiry please submit it here by Thursday 15 October. Show less

6 Recommendations

14 Conclusions

1 Report

1 Oral session

1 Letter

1 Event

Activity timeline 4 events

13 Jul
2021

Correspondence

Correspondence from Gordon More, Interim Chief, Executive Homes England, re Public Accounts Committee: Starter Homes Inquiry – Affordable H…

24 Mar
2021

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty first report from Session 2019-21

9 Dec
2020

Report published

Thirty-first Report - Starter Homes

22 Oct
2020

Oral evidence

Stater Homes

Oral evidence sessions 1 session

22 Oct 2020

View on parliament.uk

Stater Homes

Jeremy Pocklington · Ministry of Defence Nick Walkley · Homes England Tracey Waltho · Ministry of Housing, Communities and Local Government

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Thirty-first Report - Starter Homes	HC 88	9 Dec 2020	20	Responded

Recommendations & Conclusions

7 results

2 Recommendation Accepted

Thirty-first Report - Starter Homes

The Department’s reliance on developer contributions to fund First Homes is a complex mechanism lacking...

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 … Read more

Government Response

The government agrees with the recommendation and states it has published modelling on the policy's effect on developer contributions. It has also developed a legal framework for the secondary resale market with HM Land Registry, which will be publicly set out in due course.

HM Treasury

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7 Conclusion Accepted

Thirty-first Report - Starter Homes

We asked the Department about the similarities between the new First Homes policy and the...

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 … Read more

Government Response

The department has developed and started testing a legal framework with HM Land Registry to ensure First Homes discounts are passed on perpetually and will continue to work with stakeholders to ensure a smooth secondary market.

HM Treasury

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13 Conclusion Accepted

Thirty-first Report - Starter Homes

We asked the Department what it now meant when it referred to ‘affordable’ housing, particularly...

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 … Read more

Government Response

The government agreed with the committee's recommendation and stated it was implemented, clarifying its definition of affordable housing in the National Planning Policy Framework and reiterating its commitment to investing over £12 billion in diverse affordable housing.

HM Treasury

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14 Conclusion Accepted

Thirty-first Report - Starter Homes

Homes England told us that the number and proportion of affordable homes planned for the...

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 … Read more

Government Response

The government stated it agreed with the committee's recommendation and considered it implemented, by defining affordable housing in the National Planning Policy Framework and committing over £12 billion to delivering a variety of affordable homes through the new £11.5 billion Affordable Homes Programme.

HM Treasury

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15 Conclusion Accepted

Thirty-first Report - Starter Homes

First Homes, and previously Starter Homes, are aimed at people who want to own their...

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 … Read more

Government Response

The government accepted the committee's recommendation to explain its approach to homelessness, rough sleeping, and temporary accommodation, committing to provide an update to the committee within three months (by April 2021).

HM Treasury

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16 Conclusion Accepted

Thirty-first Report - Starter Homes

The Department and Homes England told that they were trying to encourage the building of...

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 … Read more

Government Response

The government agrees with the committee's observation and commits to specific actions by Autumn 2021 to increase the use of modern methods of construction (MMC). These include Homes England funding for showcase sites, industry collaboration on warranties, research into safety, and setting a 25% MMC target within the Affordable Homes Programme's Strategic Partnerships.

HM Treasury

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19 Conclusion Accepted

Thirty-first Report - Starter Homes

Homes England recognised that success in delivering housing would rely on close working with local...

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 … Read more

Government Response

HM Treasury

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Government Response AI assessment · 19 of 6 classified

Accepted 7

Accepted in Part 1

Acknowledged 1

Not Addressed 4

Rejected 6

Total 6 recs + 14 conclusions

Correspondence 1 letter

13 Jul 2021 Correspondence from Gordon More, Interim Chief, Executive Homes England, re Public Accounts Committee: Starter Homes Inquiry – Affordable Housing Statistics, dated 30 June 2021

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