Housing minister Gavin Barwell pledges that the first wave of discounted ‘starter homes’ will be built in 2017 in 30 local authority areas – but critics say they may not be ‘affordable’. Some commentators have argued the new homes will do little to help those on middle to low incomes.
The houses to be built this year will be made available exclusively to first-time buyers aged between 23 and 40, at a discount of at least 20 per cent below market value. That means a cap of £250,000 outside London – but at a ceiling of £450,000 in the capital.
Most controversially, the starter homes will count towards the Government’s target to build 400,000 new “affordable homes”.
Labour and the housing charity Shelter said it was nonsense to describe them as “affordable” when they would cost up to £450,000 each. Ministers had suggested that – under Theresa May’s leadership – the Government would refocus the starter homes project to include some properties to rent, as well as to buy.
Labour's shadow housing secretary, John Healey has said that: "These so-called 'starter homes' are a symbol of the Conservative record on housing. Ministers launched them in 2014 but will only start to build the first in 2017, promised they'd be affordable for young people when they'll cost up to £450,000, and pledged to build 200,000 by 2020 but no one now believe that's possible."
Duncan Lewis Solicitors' Manjinder Kaur Atwal, a solicitor in the Housing department, comments on the affordability of the so-called “starter homes” stating that:
“They would only be affordable by Britain’s very highest earners. An analysis published by the charity Shelter found that homes built under the scheme in London would only be available to the richest four per cent; those on salaries of over £76,957. The starter homes are normal homes, with a 20 per cent discount applied to them. The 20 per cent discount on an average priced home in London would mean it cost £417,600. It appears unlikely that many homes in the capital would be available at £150,000, even with a 20 per cent discount. It appears that the starter homes would benefit those wishing to purchase outside London.”
Duncan Lewis Solicitors’ specialist Housing team is ranked by Legal 500 2016 for its services nationwide to social tenants across London. They provide guidance for landlords and tenants on all housing issues and are highly experienced at finding solutions for you that aim to address cases quickly and effectively. The Housing team can advise on all matters, including issues with local housing authorities, housing applications, tenants, landlords, ownership, repairs and many more. If you have any issues relating to housing please do not hesitate to contact our team on 0333 772 0409.