Out-Law News 1 min. read

Government promises to deliver 200,000 starter homes through exemptions from CIL and s106 obligations


The UK government has opened registrations for a scheme through which up to 100,000 starter homes are to be offered to young first time buyers at a 20% discount, paid for by exempting developers from infrastructure payments.

Following a consultation in the winter, David Cameron announced this week that the government will press ahead with plans to introduce its Starter Homes Initiative. Under the Initiative developers would be exempted from having to pay section 106 affordable housing charges and tariffs in exchange for building homes on under-used or unviable brownfield sites and offering the homes for sale to first time buyers under the age of 40 at a discount of at least 20% from market value.

Cameron said 100,000 starter homes were expected to be brought forward under the Initiative and promised that this target would be increased to 200,000 homes by 2020 should the Conservative Party win May's general election. The prime minister also said the government would look to exempt starter homes from the community infrastructure levy (CIL) in the next parliament.

A statement from real estate investors' trade body the British Property Federation (BPF) welcomed the Initiative, but cast doubt upon whether it would deliver the proposed 100,000 new homes. The statement noted that many sites would not be eligible to become 'starter home exception sites' and that the proposals might cross over with other government schemes promoting brownfield development.

"With an ever increasing housing shortage, it is crucial that measures such as this are put in place to bring forward homes of the right type, in the right places, to enable first time buyers to step onto the housing ladder," said BPF chief executive Melanie Leech.

"Given that government is already consulting on how to make it easier for developers to build on brownfield land, however, it will be interesting to see whether this initiative delivers as many homes as it has promised, as developing brownfield sites for market sale may well be preferable to some developers," Leech said.

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