A blog by Thomasin Renshaw, Development Director
When the Government announced the First Homes policy, Pocket Living welcomed the ambition. The premise of the policy is identical to what we have been doing for years, namely opening up homeownership to young middle earners by selling at a discount.
Along the way, we’ve learnt how to navigate the challenges many local authorities and developers will now be grappling with as they look to implement this policy. This is learning we want to share as we all work towards the same goal of ending the housing crisis.
It remains to be seen how the newly rebranded Department for Levelling Up, Housing and Communities chooses to take this policy forward. For now, it remains the direction of travel and provides an important opportunity to think about routes into homeownership and how these are reflected in local plans.
The first challenge when approaching discount sale is, of course, viability. At Pocket Living, our 20% discount and efficient design works for our customers but also allows us to deliver in a sustainable, additional way without grant funding. First Homes requires a minimum discount of 30%. In higher value areas and/or for larger homes, our analysis suggests that a deeper discount may be needed to make the homes accessible to local people on similar incomes when compared to other intermediate tenures, for example shared ownership.
As First Homes will be delivered as part of the affordable component of a traditional market-led scheme, the deeper the discount, the greater the need to cross subsidise from other tenures. While we know the demand is there for discount sale, when delivered through the cross-subsidy route, authorities will have to think carefully about what loses out.
Once the homes have been built, for First Homes or any discount sale product to work, affordability needs to be meaningfully locked in and steps taken to ensure that homes stay in the hands of people who need them most. At Pocket Living, this means we play a comprehensive administration role, covering:
- Determining eligibility for the homes so they are sold to the people who will most benefit from them;
- Monitoring who lives in the homes and subletting – running an annual verification process of our homes to ensure that they do not become sources of profit; and
- Overseeing the onward sale of homes when people are ready to move on – ensuring that again the homes are sold to local people they can most help.
To deliver this, we have delivered and perfected a sophisticated system of management and found innovative ways to streamline the process via our Pocket App. We have learnt and iterated our approach based on years of experience and understanding our current and prospective buyers.
For us, this is something we see as essential to our mission to help first time buyers navigate the housing ladder. But as First Homes is implemented, questions will have to be asked about who leads the effort to keep these homes affordable and helping those who need them most?
A First Home cannot just be built and then left, it should represent an ongoing commitment to affordability and to the buyers who have taken their first step on the housing ladder. When incorporating this tenure into local plans, we need to be thinking longer term, about management and monitoring as much as delivery.
If you’d like to chat to us about this policy and how it can be implemented, email email@example.com and we’d be happy to talk.