Discounted Market Homes for First-Time Buyers Given a Boost.

On 1st April 2021, The Ministry of Housing (MHCLG) announced that it will require Councils to support the development of unplanned exception sites to increase the delivery of discounted market homes for first-time buyers – ‘First Homes’ (i.e. on sites not allocated in the local plan). The government intend to issue a written ministerial statement and develop guidance on the requirements. No date has been set for these new measures to come into effect.

It is understood that the First Homes exception developments can include a small proportion of market housing but a quarter of the dwellings proposed will need to be First Homes. There will also still be an expectation to provide social housing on these exception sites in line with local plan policies requirements.

There is no fixed size limit on the First Homes exception sites although they will need to be ‘proportionate in size to existing settlements’ which will need to be determined by the local authority.

First Homes will be expected to be offered with a discount of at least 30% below market value. Where there is an identified local need, local authorities and neighbourhood planning groups may require a higher minimum discount. The discount will need to be in perpetuity secured through legal agreement.

First Homes exception sites will not apply in designated rural areas, such as Areas of Outstanding Natural Beauty (AONB). Exemption from the need to provide First Homes would apply to the same types of development that are currently exempt from the requirements to deliver affordable home ownership units, such as specialist elderly care accommodation.

There will be transitional arrangements for implementation of the First Homes exemption sites policy. For example, local or neighbourhood plans submitted for examination within 6 months from implementation of the new requirement will not need to reflect the First Homes requirements.