A new government scheme to provide more affordable homes for local people has been welcomed by community leaders in Hertsmere, but they have also voiced concerns it could have unintended consequences.
Plans to increase the minimum level of discount off the market price of some new homes offered for sale from 20 to 30 per cent have been mooted under the government’s new First Homes initiative. The aim is to support more local people, especially first-time buyers, to get on the property ladder. We have responded to a consultation on the potential change by welcoming the step but has warned that if not implemented in a locally sensitive way, it could have an impact on the range and number of affordable homes available to the local community.
Currently the mid-point house price for Hertsmere is more than 14 times greater than the average annual salary, making home ownership beyond the reach for many in the borough.
Portfolio Holder for Planning, Councillor Dr Harvey Cohen, said: “Hertsmere, like other areas in and around London, has unaffordable house prices.
“For us, the current government standard of a minimum of 20 per cent discount off homes is insufficient to make them truly affordable and we are keen to see an increase to 30 per cent or above.
“However, while this step may bring home ownership within the reach of some who currently cannot afford it, we would not want it to come at a cost for our lowest earners.
“If it means developers no longer deem it viable to deliver as many affordable homes, including properties for rent, this could restrict access to the housing market even further.
“We would like to see as much flexibility as possible given to local authorities to set the level of discount, because we understand the local housing market best.”
When new homes are built, developers have to make a certain proportion available with a discount off the market price in order to make them more affordable for local people.
As well as increasing the minimum level of discount on some of the new homes offered for sale, under the scheme, discounts would last in perpetuity to ensure that future generations are not priced out of the area.
Portfolio Holder for Housing, Councillor Jean Heywood, added: “It’s essential that the discount on First Homes properties is applied on future sales for the long-term benefit of the community.
“We’ve asked that the discount requirement is registered as a local land charge and restrictive convenant, so that future purchasers know what the deal is.
“We also want to ensure that as well as first-time buyers with local connections, key workers who are moving into the area and would not otherwise be able to afford to do so, and current or former members of the Armed Forces are eligible for this scheme.
“Local authorities need to have the flexibility to decide if and when it is appropriate to waive first time buyer prioritisation.”
The government’s First Homes scheme consultation covers both the design and delivery of the scheme. The consultation closes tomorrow (1 May) and can be accessed at https://www.gov.uk/government/consultations/first-homes
Our full response to the consultation is available to read here.
Posted on Thursday 30th April 2020