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Shelter report questions starter homes affordability

Words: Laura Edgar
New houses / iStock

The government’s starter homes policy “is no silver bullet” for affordable housing, according to a report.

In its report Starter Homes: Will they be affordable? Shelter, a housing and homelessness charity, analyses whether or not the government’s starter homes initiative will create more affordable homes.

Announced in May in the run-up to the general election, the programme is open to first-time buyers under 40. They will receive a 20 per cent discount on the property.

But the report says Shelter’s analysis shows that the starter homes programme “will not help the majority of people on the new National Living Wage or average wages into home ownership in England by 2020”.

It won’t, the report states, help many people on “higher-than-average wages” in many areas of England. Instead, the only group it appears to help is those on higher salaries “who should be able to afford on the open market without government assistance”.

The report found:

  • Families living in 58 per cent of local authorities across England, earning average wages, will not be able to afford a starter home in 2020.

  • Families earning the National Living Wage will only be able to afford a starter home in 2 per cent of local authorities.

  • Single people on the National Living Wage won’t be able to afford a home in any local authority while single people on an average salary will only be to afford a home in six local authorities.

  • London, the South-East and the East have the lowest number of areas where affordable starter homes under the scheme's threshold could be built, despite the high demand in these areas.

This means, the report states, the starter homes policy “is no silver bullet for affordable housing”.

Instead of replacing other forms of affordable housing, like Shared Ownership and Social Rent, the report argues that starter homes should be in addition to them, “as was suggested originally in the Conservative manifesto for the general election but no longer seems to be government policy”. 

Housing Minister Brandon Lewis said the government is determined to ensure that “anyone who works hard and aspires to become a homeowner has the opportunity to do so”.

He said initiatives like Help to Buy have helped more than 200,000 households into home ownership since 2010 and the government will now deliver 200,000 starter homes to enable young first-time buyers to buy newly built homes with a 20 per cent discount.

“We have also got the country building again with new housing completions at a six-year high, planning permissions at an eight-year high and almost 800,000 additional homes have been delivered since the end of 2009.

“This is real progress, but we know there is more to do. That’s why over the next five years we are committed to deliver 275,000 extra affordable homes – the fastest rate of delivery for 20 years.”