Concerns new policy could see first homes prioritised over social housing and shared ownership

Councillors have expressed concerns over new government guidance which could see more homes earmarked for first-time buyers.

‘First Homes’ were announced in May last year and a ministerial statement set out how this would be the government’s preferred type of affordable housing going forward.

This means that 25 per cent of ‘affordable’ homes must be earmarked for first-time buyers who have a combined household income of no more than £80,000. The ‘first homes’ must cost 30 per cent less than the market value and can only be sold on to first-time buyers at a maximum price of £250,000. Currently, Adur District Council requires 30 per cent of homes at new developments to be ‘affordable’ when ten or more properties are built.

Of these homes, 75 per cent must be social housing or affordable rent with the remaining 25 per cent earmarked as ‘intermediate housing’ (homes above social rent, but below market levels). But the new guidance means first homes will take up 25 per cent of affordable housing provision, with a minimum of 56 per cent social or affordable housing. Shared ownership would make up the remaining 19 per cent.

If a developer built 50 homes in Adur, under the new policy four would have to be ‘first homes’, eight would be affordable or socially rented, and three would be shared ownership.

ADC planning officers said: “This is untested, this is new, we’re really not sure how the development industry or first-time buyers are going to respond.”

The new policy was a cause of concern for several councillors.

Jeremy Gardner (Lab, St Mary’s) asked: “Does this mean the quantity of homes available for social rent might actually fall?”

During a planning meeting earlier this month, it was revealed that 750 households are on the council’s housing waiting list.

Carol O’Neal (Lab, Eastbrook) said there is a ‘desperate need’ for more socially rented and affordable accommodation.

She expressed concerns that the policy would be unlikely to benefit those living in council housing, while reducing the number of socially rented properties available.

Brian Boggis (Con, Peverel) warned of ‘unintended consequences’ as a result of the new policy.

“Surely, if you increase discounts, then properties on the market side of the equation have got to be increased to retain the viability of the development,” he said.

“You’re putting prices up on one in order to reduce prices on the other, so I can see lots of unintended consequences.”

A report before the planning committee said the new policy could benefit Adur residents looking to purchase their first home.

But it added that ‘other tenures’ of affordable housing would ‘inevitably reduce’.

Although shared ownership options could still be delivered by other providers, according to the report, there may be an ‘adverse impact on the amount of social or affordable rented accommodation being delivered’.

According to the Land Registry House Price Index, the average price for a terraced house in Adur was £367,281 in October 2021 with flats and maisonettes costing an average of £226,181.

Planning officers expressed concern that this could limit the type or size of properties available under the ‘first homes’ scheme.