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Member Briefing: Prime Minister’s Announcements on Direct Commissioning & Starter Homes

Date: 04/01/16

Prime Minister’s Announcements on Direct Commissioning & Starter Homes


Direct commissioning

The PM today announced that the Government will directly commission the building of homes on publicly-owned land, in what he described as “a radical new policy shift”. The Coalition Government first announced a direct commissioning pilot at Northstowe in the 2014 Autumn Statement. The University of York was subsequently commissioned to undertake a study of direct commissioning, although its report has not yet been published.

The objective is to speed up housing delivery on large public-sector sites. Today’s announcement includes a proposal to release land on these sites for “small and up-and-coming” house builders. The press release commented:

“Currently the top 8 house builders provide 50% of new homes. The direct commissioning approach will support smaller builders and new entrants who are ready to build but lack the resources and access to land.”

We understand the Government will ask the HCA, land owners and local authorities to determine how large public-sector sites are to be divided up into phases of different sizes, suitable for large, medium and smaller house builders, to ensure high rates of housing delivery. Land will be sold with some form of planning permission, although it is not yet clear whether this will be an outline consent or a detailed permission. While today’s press release compared current proposals with the London Docklands regeneration in the 1980s, there does not appear to be any suggestion that planning decisions will be taken away from local authorities.

No decision has yet been made about what might constitute an appropriate size of phase/site for a smaller developer (one newspaper’s speculation that sites will be offered in parcels of 500 units is not correct), nor is it clear whether this will be decided by central Government or left up to the HCA, land owner and local authority to decide on a site-by-site basis.

The first wave of direct commissioning will apply to four sites outside London, covering up to 13,000 new homes, with up to 40% affordable Starter Homes. The approach will also be used for the Old Oak Common site in west London (more than 25,500 homes). The initial list of sites where the Government wants to see direct commissioning under way as soon as possible is: 

  • Connaught Barracks in Dover
  • Northstowe in Cambridgeshire
  • Lower Graylingwell in Chichester
  • Daedelus on Waterfront in Gosport
  • Old Oak Common in north west London

Starter Homes & brownfield sites

The PM also announced a £1.2bn “starter home fund” to prepare brownfield sites for new homes. He said this will fast-track the creation of at least 30,000 Starter Homes and up to 30,000 market homes on 500 new sites by 2020.

“The new investment will help kick-start regeneration and secure planning permission in urban areas – renovating disused or under-occupied urban sites so builders can get to work without any delays.”

HBF understands the fund will cover costs such as site remediation and infrastructure, and even possibly the cost of gaining planning permission.

We understand details of how house builders will be able to access the fund should be made available in February. In the meantime, the Government is keen to see house builders identifying sites suitable for the exceptions site Starter Homes scheme (“unused and previously undeveloped commercial, retail and industrial land” not already identified in a Local Plan, with exemptions from Affordable Housing and the Community Infrastructure Levy).

There is a lot of detail yet to be decided, but HBF will seek to work with Ministers and officials and we will keep members informed about progress with direct commissioning and the £1.2bn Starter Homes Fund.


John Stewart

Director of Economic Affairs