Housing and Planning Act 2016

CHAPTER 1 Starter homes

1 Purpose of this Chapter

The purpose of this Chapter is to promote the supply of starter homes in England.

2 What is a starter home?

(1) In this Chapter “starter home” means a building or part of a building that—

(a) is a new dwelling,

(b) is available for purchase by qualifying first-time buyers only,

(c) is to be sold at a discount of at least 20% of the market value,

(d) is to be sold for less than the price cap, and

(e) is subject to any restrictions on sale or letting specified in regulations made by the Secretary of State (for more about regulations under this paragraph, see section 3).

(2) “New dwelling” means a building or part of a building that—

(a) has been constructed for use as a single dwelling and has not previously been occupied, or

(b) has been adapted for use as a single dwelling and has not been occupied since its adaptation.

(3) “Qualifying first-time buyer” means an individual who—

(a) is a first-time buyer,

(b) is at least 23 years old but has not yet reached the age of 40, and

(c) meets any other criteria specified in regulations made by the Secretary of State (for example, relating to nationality).

(4) “First-time buyer” has the meaning given by section 57AA(2) of the Finance Act 2003.

(5) “Purchase”: the reference to a building or part of a building being available for purchase is to a freehold or a leasehold interest in the building or part being available for purchase.

(6) The “price cap” is set out in the table.

Location of starter home	Price cap
Greater London	£450,000
Outside Greater London	£250,000

(7) The Secretary of State may by regulations—

(a) amend the definition of “first-time buyer”;

(b) disapply the age requirement in subsection (3)(b) in relation to specified categories of people;

(c) specify circumstances in which a dwelling may still be a starter home even if it is available for purchase by joint purchasers not all of whom meet the age requirement.

(8) The Secretary of State may by regulations amend the price cap; and the regulations may provide for different price caps to apply—

(a) for starter homes in different areas in Greater London;

(b) for starter homes in different areas outside Greater London.

(9) Before making regulations under subsection (8) the Secretary of State must consult—

(a) each local planning authority in England,

(b) the Mayor of London, and

(c) any other person the Secretary of State thinks appropriate.

(10) Regulations under this section may amend this Chapter.

3 Power to require payments or discounts on resale (subject to tapering) etc

(1) The restrictions on sale that may be specified by regulations under section 2(1)(e) in relation to a dwelling that has been sold to a qualifying first-time buyer include, in particular, restrictions —

(a) requiring a person who sells the dwelling within a specified period to make a payment to a specified person in respect of the starter homes discount, or

(b) prohibiting a person from selling the dwelling within a specified period unless the dwelling is sold to a qualifying first-time buyer at a discount.

(2) Regulations made by virtue of subsection (1) must—

(a) set out how the amount of the payment or discount is to be determined, and

(b) provide for reductions in the amount of the payment or discount according to the length of time since the dwelling was first sold to a qualifying first-time buyer.

(3) The person specified in regulations under subsection (1)(a) may be the Secretary of State, a local planning authority in England or any other person.

(4) Regulations under section 2(1)(e) may impose restrictions that require a person selling the dwelling to sell it subject to any restrictions to which he or she is subject.

(5) Regulations under section 2(1)(e) may include provision about the legal mechanism by which any requirement is to be imposed.

(6) The Secretary of State may by regulations make provision about the use of sums that are paid to a person in accordance with a requirement imposed by regulations made by virtue of subsection (1)(a) (including provision permitting or requiring the payment of sums into the Consolidated Fund).

(7) In subsection (1)(a) “starter homes discount” means the discount mentioned in section 2(1)(c) or subsection (1)(b) above.

4 General duty to promote supply of starter homes

(1) An English planning authority must carry out its relevant planning functions with a view to promoting the supply of starter homes in England.

(2) A local planning authority in England must have regard to any guidance given by the Secretary of State in carrying out that duty.

(3) “English planning authority” means—

(a) a local planning authority in England, or

(b) the Secretary of State when exercising a function relating to the grant of planning permission on an application in respect of land in England.

(4) “Relevant planning functions” means—

(a) functions under Part 3 of the Town and Country Planning Act 1990, other than functions relating to the grant of permission in principle;

(b) functions under Part 8 of the Greater London Authority Act 1999;

(c) functions under Part 2 of the Planning and Compulsory Purchase Act 2004.

(5) The Secretary of State may by regulations—

(a) amend the definition of “English planning authority” in subsection (3);

(b) amend the definition of “relevant planning functions” in subsection (4).

5 Planning permission: provision of starter homes

(1) The Secretary of State may by regulations provide that an English planning authority may only grant planning permission for a residential development of a specified description if the starter homes requirement is met.

(2) Where the Secretary of State makes regulations under this section, the regulations must give an English planning authority power to dispense with the condition requiring the starter homes requirement to be met where—

(a) an application is made for planning permission in respect of a rural exception site, and

(b) the application falls to be determined wholly or partly on the basis of a policy contained in a development plan for the provision of housing on rural exception sites.

(3) “English planning authority” means—

(a) a local planning authority in England, or

(b) the Secretary of State when exercising a function relating to the grant of planning permission on an application in respect of land in England.

(4) “The starter homes requirement” means a requirement, specified in the regulations, relating to the provision of starter homes in England.

(5) Regulations under this section may, for example, provide that an English planning authority may grant planning permission only if a person has entered into a planning obligation to provide a certain number of starter homes or to pay a sum to be used by the authority for providing starter homes.

(6) The regulations may confer discretions on an English planning authority.

(7) The regulations may make different provision for different areas.

(8) In section 70 of the Town and Country Planning Act 1990 (determination of applications: general considerations), for subsection (3) substitute—

“(3) Subsection (1) has effect subject to the following—

(a) section 65 and the following provisions of this Act;

(b) section 15 of the Health Services Act 1976;

(c) sections 66, 67, 72 and 73 of the Planning (Listed Buildings and Conservation Areas) Act 1990;

(d) regulations under section 5 of the Housing and Planning Act 2016 (starter homes requirements).”

6 Monitoring

(1) A local planning authority in England must prepare reports containing information about the carrying out of its functions in relation to starter homes.

(2) The Secretary of State may by regulations make provision about reports under this section, including—

(a) provision about their form and content;

(b) provision about their timing;

(c) provision requiring them to be combined with reports under section 35 of the Planning and Compulsory Purchase Act 2004.

(3) The regulations may require a report to contain information about applications to which regulations under section 5 apply and details of how those applications have been dealt with.

(4) An authority must make its reports under this section available to the public.

7 Compliance directions

(1) The Secretary of State may make a compliance direction if satisfied that—

(a) a local planning authority has failed to carry out its functions in relation to starter homes or has failed to carry them out adequately, and

(b) a policy contained in a local development document for the authority is incompatible with those functions.

(2) A “compliance direction” is a direction that no regard is to be had to the policy for the purposes of any determination to be made under the planning Acts.

(3) A compliance direction remains in force until revoked by a further direction given by the Secretary of State.

(4) A direction under this section must include the Secretary of State’s reasons for making it.

(5) The Secretary of State must publish any direction under this section and give a copy to the local planning authority.

8 Interpretation of this Chapter

In this Chapter—

• “development” has the meaning given by section 336 of the Town and Country Planning Act 1990;

• “functions in relation to starter homes”, in relation to a local planning authority, means the authority’s functions under—

  (a)

  section 4, and

  (b)

  regulations under section 5;

• “local development document” is to be read in accordance with sections 17 and 18(3) of the Planning and Compulsory Purchase Act 2004;

• “local planning authority” means a person who is a local planning authority for the purposes of any provision of Part 3 of the Town and Country Planning Act 1990;

• “the planning Acts” has the meaning given by section 117(4) of the Planning and Compulsory Purchase Act 2004;

• “planning obligation” means a planning obligation under section 106 of the Town and Country Planning Act 1990;

• “planning permission” has the meaning given by section 336 of the Town and Country Planning Act 1990;

• “residential development” means a development that includes at least one dwelling;

• “starter home” has the meaning given by section 2.