Getting on the ladder: First Home *exception sites*
Spring has sprung, the rain has finally stopped, and the wait is over. It’s the season of First Homes. Long-promised from last year. An April consultation response confirming they were on their way. And now… praise be… they’re here. Well, they will be soon anyway.
So to get you caught up, and before we get into any nitty gritty, can I offer you this reading list:
The Written Ministerial Statement which tells us what’s happening.
The Planning Practice Guidance which adds flesh to those bones.
For a tip-top introduction to all of that, see this summary from Jennie Baker of Lichfields and another from Stuart Tym of Irwin Mitchells.
For a more detailed look at three key dates for the policy’s implementation, go to Simon Ricketts’ explainer here.
For a deeper dive into those areas of the country where the First Homes policy might actually work (balancing price, size, need and viability) can I point you to this brilliant blog from Rachel Clements and Bethan Haynes, also of Lichfields.
For a really useful summary of how First Homes have been beefed up over the dearly departed and not altogether successful idea for Starter Homes (only unsuccessful in that none were ever actually built) - Matthew White and Fiona Sawyer of Herbert Smith Freehills have you covered (written during the consultation, but still holds good).
So what are First Homes - well, if you’ve glanced at that reading list you know already, but in a nutshell… they’re a new limb to the Government’s definition of “affordable housing”. We’re talking about discounted housing for first-time buyers from households a combined annual income under £80,000 (or £90,000 in Greater London). What sort of discount? At least 30% vs. market value, and the homes are subject to absolute price caps (£250,000, or £420,000 in Greater London). In the end, the requirement will be for a minimum of 25% of all affordable housing units secured through developer contributions to be First Homes.
What’s the point of all of this? Well, the PPG tells us “First Homes are designed to allow people to get on the housing ladder in their local area”. But, friends, this is not a blog about whether this policy’s actually likely to work or not (an interesting and controversial topic to be sure - but not one for us lawyers). It’s also not about whether it’s a good idea to push home-ownership in this way when it will (at least sometimes) come at the expense of delivering more affordable housing for rent (see e.g. Shelter’s consultation response here).
No. This blog’s about a different feature of the First Homes policy. A new feature which, I think anyway, is going to get a fair amount of action in the coming years. For some readers (and who knows: as the giant national lottery finger in the sky used to say, it could be you!) this policy may open a whole new chapter in your development strategy. What are we talking about? First Home exception sites.
Take a field, any field. Well not quite any field. No - our field’s on the edge of a village. Or a town. It’s not a particularly special field. Not in the Green Belt, say, or in a National Park, an AONB or anything like that. It may be pleasant enough, but it isn’t currently doing much of any great value. Now, it isn’t actually allocated for anything. Not yet. But part of you can’t help thinking - this field might just be a sensible place for some new homes.
But hang about. Along comes the planning system. And the reaction isn’t altogether positive. Objection number 1 = your field’s on the wrong side of the settlement boundary. Which means it’s deemed “open countryside” by local plan policies. Which means there’s a presumption against any new homes on it unless you fit into one of a few narrowly tailored exception policies in the plan. And - spoiler alert - you don’t fit into any of them. Sorry. Permission refused: in-principle conflict with the development plan.
Not looking good so far, is it.
Might it help if there was some kind of material consideration which could counter-balance, or even outweigh, that in-principle policy conflict?
Enter stage left: exception sites.
Now. To start at the beginning...
We currently have national policy on something called “entry-level exception sites”: see §71 NPPF here. Those are for sites which provide “entry-level homes suitable for first time buyers (or equivalent, for those looking to rent)”.
What’s exceptional about any of this? Well, these are “exception sites” because (a) they aren’t already allocated for housing, and (b) they’re outside settlement boundaries.
Entry-level exception sites have to be “adjacent to existing settlements, proportionate in size to them”. What does proportionate in size mean? The current policy tells us:
“Entry-level exception sites should not be larger than one hectare in size or exceed 5% of the size of the existing settlement”.
But farewell to that policy because, the Government have told us, they don’t think it’s “delivered affordable housing to the extent originally envisaged”.
In its place, here come First Homes exception sites. What are these new creatures?
They have to deliver primarily First Homes - but not exclusively. I’ll come back to that.
They too can come forward on unallocated land outside of a development plan (albeit not in the Green Belt, National Parks or AONBs).
They also should be adjacent to existing settlements, and proportionate in size to them - but this time, we don’t get a definition of what proportionate means. I’ll come back to that.
They shouldn’t “compromise the protection given to areas or assets of particular importance” in footnote 6 of the NPPF. And they need to comply with any local design policies and standards.
And Local Planning Authorities are told to support the development of these exception sites “unless the need for such homes is already being met within the local authority’s area”.
In all of that, we have two big shifts which are worth zooming in on:
Schemes on these exception sites can include market homes. How many market homes? It depends. The WMS says it may be a “small proportion” of market housing at local planning authorities’ discretion “for example where essential to enable the delivery of First Homes without grant funding”. The PPG says that “First Homes exception sites can deliver a small proportion of market housing, provided that it can be demonstrated that this is necessary in order to ensure the overall viability of the site”. How small is a small proportion? We will have to find out together. They can also include other tenures of affordable housing too “where there is significant identified local need”. So one thing this policy’s indubitably going to mean: more work for viability consultants.
Whether a site’s “proportionate” in size to the existing settlement isn’t fixed any more by policy criteria (e.g. no more “5% or 1 hectare”). No. Now it’s a judgment call case-by-case. And better still, the PPG positively encourages developers to hire more #planoraks to work out the right answer:
“What evidence can be used to in demonstrating that a proposed First Homes exception site is proportionate in size to the existing settlement?
For decision making, what constitutes a proportionate development will vary depending on local circumstances. As part of their process for preparing planning applications, applicants should consider engaging a relevant built environment professional to provide advice on the scale of their proposal and also consider proactively engaging with local authorities where possible to discuss their proposals.”
What does that actually mean? Well, we’ll be looking at overall settlement area (which itself can be tricky to define as the way settlements are drawn in development plans doesn’t always reflect real life), overall number of dwellings, physical features on the ground, how settlements are actually experienced…
And even when you’ve worked out how big a settlement is, what’s within a settlement and what’s outside it, there’s still an almighty debate to be had about “proportionality”. Or even what proportionality means. For instance: we see that the idea is to focus on a proportionate relationship between the scale of your scheme and the size of the settlement. But can that relationship be affected by the extent of local need for housing? Is the extent of need one of the relevant “local circumstances”? What are the others? Interesting debates for another day. We’ll all have to find out together.
So. Mark those calendars, friends. 28th June 2021. There’s a new exception site policy in town. Well. On the edge of town. And sure, we still have several issues to quibble about with what the policy actually means - don’t we always - which will inevitably need to be smoothed out in some appeals. Or even High Court challenges. And yes, there may be large swathes of the country where First Homes could still be too expensive for the first-time buyers they’re supposed to serve. Nonetheless. If, for whatever reason, your field ain’t getting allocated any time soon… well. Here’s some advice: read this First Homes exception site policy verrrrry carefully. It might just give you a way forward.
In the meantime, #planoraks, I hope you enjoyed your Bank Holidays. Only a few weeks until proper summer now. Stay well and, of course, #keeponplanning.
