GMCA: First Homes scheme should not trump affordable homes

The government’s planned First Homes scheme risks limiting councils’ abilities to build affordable homes for those most in need of them, the Greater Manchester Combined Authority (GMCA) has said.

In its response to the consultation on the scheme on 1 May, the GMCA said that the planned policy to help first-time buyers buy homes in their local area will be ‘difficult and costly to administer’, burdening local authorities already stretched by public spending cuts.

The GMCA’s housing lead, Salford Mayor Paul Dennett, also warned that the scheme may make it harder for councils to provide homes for people on lower incomes, and expressed concern that it will do little to provide ‘truly affordable’ homes for those who need them.

Writing to the Ministry of Housing, Communities and Local Government, Dennett wrote: “At this time the top priority for government should be to support these vulnerable households through the provision of more social and affordable homes.

“Whilst we welcome commitment to support local first-time buyers and increase home ownership, we think this priority should not be at the expense of building homes for people most in need.”

The GMCA’s consultation response to the First Homes scheme comes after MHCLG announced the scheme back in February in its first major housing announcement of the year.

The planned First Homes scheme will see the cost of some new homes cut by around a third for first-time buyers, key workers, and members of the armed forces in England, with the aim of making it easier for them to buy a home in their local area rather than being forced to look elsewhere.

The 30% discount will be ‘locked’ into the property in perpetuity to enable future first-time buyers to purchase it at the same price when the home is sold.

The housing secretary Robert Jenrick said at the time that the scheme will be ‘genuinely life-changing’ for people across England looking to buy their first home.

However, the GMCA has described plans to fund the scheme through section 106 contributions – routine agreements made by councils with developers through the planning system – as a ‘major concern’, as it will reduce the number of affordable homes that councils can provide.

The limited value of and costs involved with many s.106 schemes on brownfield land can also make it harder to councils to secure these contributions – a particular concern in areas with high proportions of brownfield land such as Greater Manchester, and ‘the North of England as a whole’, the GMCA added.

Instead of prioritising the First Homes scheme, the government should focus on providing more homes at social and affordable rents to help those in the most acute housing need, scrapping the Right to Buy scheme and redesigning the welfare system, the authority concluded.

“Where we make recommendations on the operational details of the policy, these do not imply our endorsement of the approach,” Dennett concluded.

“Rather we are seeking ways to make the First Homes proposals work as effectively as possible, with the minimum of detriment to positive outcomes for Greater Manchester.”

The government’s consultation on the First Homes scheme closed on 1 May. Its response to the consultation is expected later this year.

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