From 28 June 2021 First Homes will be part of the Planning System. This change to National Planning Policy requires that at least 25% of all affordable homes delivered through developer contributions should be sold as First Homes.
First Homes are discounted market sale units which:
a) must be discounted by a minimum of 30% against the market value;
b) are sold to first time buyers from households with a combined annual income under £80,000 (or £90,000 in Greater London) and are only available with a mortgage to be used as a sole or primary residence.
c) on their first sale, will have a restriction registered on the title at HM Land Registry to ensure this discount (as a percentage of current market value) and certain other restrictions are passed on at each subsequent title transfer; and,
d) after the discount has been applied, the first sale must be at a price no higher than £250,000 (or £420,000 in Greater London).
There will however, be some transitional arrangements as follows:
- Local plans and neighbourhood plans submitted for examination before 28 June 2021, or that have reached publication stage by 28 June 2021 and subsequently submitted for examination by 28 December 2021, will not be required to reflect the First Homes policy requirement.
- Where local and neighbourhood plans are adopted under the above transitional arrangements, the First Homes requirements will also not need to be applied when considering planning applications in the plan area until such time as the requirements are introduced through a subsequent update.
The new First Homes policy requirement also does not apply for the following:
- sites with full or outline planning permissions already in place or determined (or where a right to appeal against non-determination has arisen) before 28 December 2021;
- applications for full or outline planning permission where there has been significant pre-application engagement which are determined before 28 March 2022;
In order to maximise the number of First Homes made available to those keen to get on the housing ladder, the Government is also seeking to deliver First Homes via exception sites. Exception sites are small sites brought forward outside of development plans in order to deliver affordable housing.
First Homes exception sites should be on land which is not already allocated for housing and should be adjacent to existing settlements, proportionate in size to them, not compromise the protection given to areas or assets of particular importance in footnote 6 the NPPF, and comply with any local design policies and standards.
A small proportion of market homes may be allowed on the exception site at the local authority’s discretion, for example where essential to enable the delivery of First Homes without grant funding. Also, a small proportion of other affordable homes may be allowed on the sites where there is significant identified local need.
If you would like advice about your land or for more information regarding First Homes please contact us.