Position Statement on First Homes

A Written Ministerial Statement and update to the Planning Practice Guidance were issued on 24 May 2021. The First Homes requirement came into effect on 28 June 2021, and from this date, a home meeting the criteria of a First Home will also be considered to meet the definition of ‘affordable housing’ for planning purposes.

The First Home Criteria means:

  • A First Home must be discounted by a minimum of 30% against the market value; and,
  • After the discount has been applied, the first sale of the home must be at a price no higher than £250,000 (outside London) Local authorities can set a deeper minimum discount at either 40% or 50% and impose lower price caps, if they can demonstrate a need for this through evidence. The discount in perpetuity should be secured through a planning obligation. Eligibility:
  • For first time buyers only
  • Household with a combined annual income up to £80k (over this and you are not eligible)
  • All purchasers must use a mortgage or home purchase plan for at least 50% of the discounted purchase value.

Importantly, a minimum of 25% of all affordable housing units secured through developer contributions should be First Homes.

Local authorities can set a lower income cap, prioritise key workers and /or specify local connection requirements. However, these local eligibility restrictions will be time-limited to the first three months from the start date of marketing the property. Upon expiry of the three-month period, any homes which have not been sold or reserved will revert to the national standard criteria above.

Mortgage lenders enforcing security over a First Homes should be able to realise the full market value of the property, returning any surplus up to the value of the First Homes discount to the local authority. A Mortgagee Exclusion Clause is required.

A local planning authority should make clear how existing policies should be interpreted in the light of First Homes requirements using the most appropriate tool available to them.

First Homes Exception Sites are not applicable in National Parks.

Our approach:

Planning law requires that applications for planning permission be determined in accordance with the development plan, unless material considerations indicate otherwise. The Written Ministerial Statement is a material consideration and weight applied to it accordingly.

Our Local Plan was adopted on 19 May 2021, so is up to date. Policy 15: Housing and Housing Supplementary Planning document sets out our approach to new housing development in the Lake District. Essentially, all new housing is for permanent occupation and subject to local connection criteria.

First Homes is a government recognised affordable housing product, and is their preferred discounted for sale product. We consider all affordable housing products in our assessment of planning applications for new homes, so we could consider the product in the context of how it contributes towards meeting an identified need, if put forward by the applicant.

However, there is a degree of conflict with the Ministerial Statement and Practice Guidance which is significant and serves to undermine our Local Plan policy 15: Housing. If a first home is not sold after three months of marketing, then the local eligibility criteria will be removed, and occupancy would not be limited to a local geography. The National Planning Policy Framework paragraph 78 states ‘in rural areas, planning policies and decisions should be responsive to local circumstances and support housing developments that reflect local needs.’ Removing the local eligibility criteria also goes against the spirit of the English National Parks and the Broads Circular 2010, were the emphasis is on providing affordable housing to meet the needs of local communities.

Given the significant degree of conflict with our recently adopted Local Plan, First Homes is not an affordable housing product that the Authority supports in planning applications for new affordable housing in the Lake District National Park.