George Osborne calls for more rural starter homes

Chancellor George Osborne has said he wants to reform planning laws to make it easier for villages in England to build new starter homes.

Mr Osborne said the changes would allow councils to allocate more sites for building homes specifically for people who already live or work in the area.

He said he also wanted to improve transport, schools and broadband in rural areas to boost the rural economy.

But Labour said the plans were ignoring the need for more affordable homes.

The chancellor wants to extend the government's "starter homes" scheme, announced before the election for brownfield sites, to some villages.

The initiative offers young local first-time home buyers a 20% discount on the price of the property. As it stands, the discount will be offered on homes up to £250,000 outside London and £450,000 inside London.

The measures are part of Mr Osborne's new rural productivity plan, which will be unveiled later.

Steve Reed, Labour's shadow local government minister, said the Conservatives' housing policies had made things worse for people in rural communities.

"The government says it wants to build starter homes in rural areas but it seems these will replace affordable homes to buy and rent - starter homes should be additional to affordable housing supply not instead of it," he said.

"In many rural areas buying or renting a home has become increasingly unaffordable. Yet the government has undermined the provision of affordable housing at every step by watering down requirements on developers to build new affordable homes."

Writing in the Daily Telegraph, Mr Osborne said rural areas were an increasingly dynamic part of the economy, with 60,000 people moving from the city to the countryside each year.

He has pledged to continue to protect the Green Belt but said he wanted to "make it easier for people to stay in their rural communities and for newcomers to settle there too".

He and Environment Secretary Liz Truss write in their joint newspaper editorial: "For rural areas, we want better internet and mobile phone communications, better transport, better schools, better skills, better housing, better business growth and better local government.

"And we'll look at planning and regulatory constraints facing rural businesses. In a recent survey of rural businesses the main barrier to growth that most identified was planning restrictions.

"So for a start, we'll review rules around agricultural buildings such as barns to allow rural businesses to expand more easily."

The Campaign for Rural England said it welcomed the government's recognition that rural areas could boost the economy, but it voiced concern that the "beautiful English countryside" was at risk of "inappropriate developments".

Planning officer John Rowley said: "We recognise that providing the right houses in the right places that meet local need is a vital part of ensuring our villages remain vibrant and sustainable.

"However, the proposals risk alienating local communities and reducing the amount of affordable housing in rural areas. The government's suggestion that young families will be able to afford houses at even 20% discount will not ring true in many low-waged rural economies."

He added it was likely that commuters would be able to outbid local families, taking advantage of the discount which would not continue on resale - and therefore there would be no incentive for local people to back any new developments.