Starter Homes won’t solve ‘affordability crisis’
The plans, under which the government has pledged to build 200,000 starter homes by 2020, were criticised by Campbell Robb who said the initiative would only make starter homes affordable for higher earners.
First-time buyers under the age of 40 will be eligible for a discount of 20% off the market price of their home purchase through the scheme. Since February, when first-time buyers were invited to start signing up for cut-price homes, the Starter Homes scheme began to attractive criticism from industry experts who said the government has failed to account for the cost of the initiative.
During his closing speech at the Conservative Party conference in Manchester, Prime Minister David Cameron highlighted the government’s plans for UK housing, explaining that housing was the government’s ‘only’ unfinished business in the current economy.
He said: “A greater Britain must mean more families owning a home of their own. We need a national crusade to get homes built; that means getting banks lending, government releasing land and planning being reformed.”
However, Shelter’s Robb said the government needed to focus on investing in ‘genuinely affordable’ homes to buy and rent for individuals on ordinary incomes.
“Today’s announcement confirms our fears that Starter Homes costing up to £450,000 will be built at the expense of the genuinely affordable homes this country desperately needs,” he said.
“Our research has shown that these Starter Homes will too often only be ‘affordable’ for higher earners, not the millions of people working hard for an average wage who will be left stuck in expensive private renting.”
While a number of industry commentators welcomed the announcement, Lawrence Hall of online property portal Zoopla agreed that Cameron’s pledge to ‘turn generation rent into generation buy’ would be difficult to achieve.
“The Prime Minister’s pledge to build more starter homes for first-time buyers and amend requirements for developers represents positive news for those trying to take their first step on the property ladder and affords more flexibility to those attempting to provide the houses they will actually live in,” he added.
“However, while 200,000 starter homes by 2020 sounds like an impressive figure in isolation, the UK needs this many new homes each year to address the housing supply shortage that has plagued the nation for some time and caused real issues for prospective home buyers.”