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Starter homes policy flops and delivers no homes

Words: Huw Morris

A  flagship government policy to build 200,000 homes for first-time buyers has resulted in no homes being built, according to Whitehall’s spending watchdog.

The Starter Homes programme, unveiled in 2014 and a key Conservative Party manifesto pledge in 2015, was aimed at people under 40 and sold at a 20 per cent discount to tackle the affordable housing crisis. The policy also aimed to support wider regeneration and growth, but legislation for the policy was never passed.

The homes were meant to be built across the country by the end of the decade and the government set aside £2.3 billion for the first tranche of 60,000 homes.

The National Audit Office (NAO) reveals that between 2015-16 and 2017-18, the Ministry of Housing, Communities and Local Government and its predecessors spent almost £174 million buying and preparing sites originally intended for starter homes. These included sites in Basildon, Bridgwater, Bristol, Bury, Cinderford, Plymouth and Stockport.

The NAO says the sites are all now being used for general housing, only some of which has been affordable. It said the scheme had flopped because the necessary legislation and planning guidance had never been put through parliament, despite expectations it would happen in 2019.

The Housing and Planning Act 2016 had created the framework for the policy to go ahead but relevant sections of the legislation had yet to come into force, the NAO added. As a result, even new homes conforming to the intended specifications cannot be marketed as Starter Homes, which has discouraged developers.

The NAO said the government also no longer had a budget dedicated to the Starter Homes project.

"Despite setting aside over £2 billion to build 60,000 new starter homes, none were built,” said Commons public accounts committee chair Meg Hillier. “Since 2010 many housing programmes announced with much fanfare have fallen away with money then recycled into the next announcement.

"The MHCLG needs to focus on delivery and not raise, and then dash, people's expectations.”

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