Our Conference Message: Security, Stability, Opportunity
- We are modern, compassionate Conservatives who are truly on the side of working people – whatever stage of life they are at.
- A home-owning revolution: Generation Rent to Generation Buy
Summary: The Prime Minister has announced a major boost to affordable home ownership. We will ensure affordable housing includes low cost home ownership, so young people are not locked into renting when what they really want is a home of their own.
- For years, politicians have been talking about building what they call ‘affordable homes’–but the phrase was deceptive.It basically means homes that were only available to rent. What people want are homes they can actually own. Old rules said to developers: you can build on this site, but only if you build affordable homes for rent. We are replacing them with new rules: you can build here, and those affordable homes can also be low costs homes to buy.We are helping Generation Rent move to Generation Buy.
- Current planning rules prevent Starter Homes, which give first time buyers at least a 20 per cent discount on a new build home, as counting as affordable. But such homes are a key way for many to turn their dream of owning their own home into a reality as part of a sensible affordable housing mix. This will help deliver more homes for first time buyers, more quickly.
- Starter Homes are only a part of the Conservative proposals on home ownership. We will extend the Right to Buy to housing association tenants, support Help to Buy up to 2020, and increase the supply of new homes by helping small and medium sized builders,and ensure councils deliver enough homes to meet their local housing need.
- Extend the definition of affordable homes to include Starter Homes.Starter Homes are a new Government programme to build low-cost homes for first time buyers, under 40 years old. Prices are at least 20 per cent lower than the market rate. However, they are not currently classed as ‘affordable’ housing under government planning rules. The current policy says: ‘low cost market housing may not be considered as affordable housing for planning purposes.’1
- Holding out for unrealistic types of‘affordable’housing hinders house building. While house builders need to support affordable housing, in some cases local authorities demand a particular type, or level, of a particular type of affordable housing that is simply not financially viable to sell and maintain. This stops homes from being built in the first place, and prevents house builders from meeting the untapped market demand of low cost homes to buy. By introducing more flexibility, more sites will be built out, and as a result, more affordable housing provided than would otherwise be the case.
- People want a home of their own: Thanks to these rigid rules, young people are being locked in to renting, when actually they want to buy their own home –at an affordable price. Given the choice, 86 per cent of people want to own their own home rather than rent, and a fifth say the high cost of housing is the barrier.2 There is massive untapped demand for low cost homes to buy, which the market is being prevented from providing due to state rules.
- We are going to change the rules to include Starter Homes in the affordable housing definition. At present such a model of a discounted home for outright purchase is not covered by the definition. We want this model of discounted home ownership to be seen as part of the affordable housing mix. This does not reduce the total financial value of affordable housing provided –but actually can help increase the total level of affordable housing by making more sites economically viable.
- We will also make it clear that councils cannot hold out for one type of affordable housing over another. We will be making clear that significant delays based on the type of affordable housing rather than the overall cost of affordable housing are not acceptable,giving flexibility to developers to bring forward sites with different types of affordable housing.This will not reduce the total amount of support toward affordable homes. Existing guidance already states that councils should be flexible in delivering affordable housing through Section 106 agreements. DCLG will be strengthening this guidance, writing to the Chief Executive of the Planning Inspectorate, writing to Chief Planning Officers, and considering any other measures necessary if these measures fail to have the desired impact. Local authorities should be flexible on the type of affordable housing on any specific site in order to make sites viable and get homes built.
- This will go alongside measures to ensure Starter Homes on all reasonable sized sites. As set out in our Productivity Plan we have said that all reasonably sized sites should have Starter Homes on them. We will also take forward measures at the Spending Review to refocus support on low cost home ownership rather than primarily homes for sub-market rent.
- Delivering affordable homes. We have built 260,000 affordable homes since 2010–with a quarter of them in London.1
- Higher level of council houses built. Twice as many council homes were built between 2010-11 and 2014-15 than under 13 years of Labour Government.2
- Housing starts are at their highest since 2007. Moreover, last year, councils across England granted permission for 261,000 new homes–showing that our locally-led planning reforms are working.3
Costing and funding
- There is no cost to taxpayers.This is about allowing affordable housing to be for sale as well as for rent.