Housing for the young and urban
One of the more unheralded parts of George Osborne’s Budget last week was the announcement of the £1.2BN Starter Homes Land Fund designed to support both the delivery of at least 30,000 starter homes on brownfield land, and wider aspirations for local growth and regeneration.
The question here is not whether we should have a starter homes policy at all (that is a whole other debate in itself), but whether or not the Land Fund will have the desired effect of bringing forward sites for development that provide the opportunity for the policy to work, and in turn, increase the rate at which owner occupier housing is delivered to the market.
The fund is designed to support the acquisition, remediation and de-risking of suitable land for starter home developments. Local authorities are asked to identify sites which would be suitable for developments with a high proportion of starter homes, and which can support wider development aspirations. Town centres, commuter hubs and stations are particularly identified as being places in which suitable sites might be found. The Homes and Communities Agency will then form partnerships with local authorities to bring forward packages of sites capable of bring forward starter home developments by 2020.
For this to work, the Starter Homes Prospectus rightly calls for evidence of local leadership with vision, and an ability to put in place a supportive planning environment and a commitment to establish partnerships which will seek to lever in additional public and private sector investment. It, rightly, remains agnostic about the nature of these partnerships, as the requirements will change from location to location. However, the critical point here is that the Starter Homes Land Fund requires there to be suitable sites. This seems to be the nub of the issue.
What is a suitable site? Sites which can be found in the right ownership, at the right price? With feasible and affordable remediation capable of being delivered to facilitate development before 2020? In the right location, with the right neighbours, and where a supportive planning framework can be established? These are tricky criteria to meet, especially given the effort already expended to bring forward brownfield land for development. Some may wonder why it will come forward now if previous incentive schemes have not already delivered it to the market. Others may think that brownfield sites might come forward because of the ability to access funding, but in places where starter homes are not really suitable.
The main issue is that if significant subsidy is being made available to support development in town centres and around stations, then this should be being used to create attractive sites which help to raise values in the area, and create a regeneration model which becomes attractive to investors over the longer term. This would make the public sector grant worth expending.
The focus on brownfield land is not really helpful, because the development of an investable development proposition might require other solutions for the brownfield land, thus reducing development costs, perhaps with development taking place on land elsewhere. Schemes need to have this flexibility, so that the best balance can be reached between cost of development and quality and value of the place it creates.
Without freeing the Starter Home Land Fund from its relationship with brownfield land, it seems unlikely that it will achieve its objective of bringing more young people into the hearts of our towns and cities in a way that helps to create a more sustainable housing market for the future. Of course, there will be places where the criteria can be met, and we shouldn’t stand back from delivering these to the market where this can contribute to a more sustainable investment proposition.