Mortgages  

Tories aim for accessible housing market

Tories aim for accessible housing market

David Cameron has pledged to build 200,000 starter homes for first time buyers by the end of this parliament as part of an “all-out assault on poverty”.

The properties will be sold to those under 40 at a 20 per cent discount off the market price, and property values will be capped at £450,000 in London and £250,000 in the rest of the UK.

The announcement was made at the Conservatives’ annual conference, but the promise had first been made in March this year, during his campaign for re-election.

Article continues after advert

The plans have been dismissed by some critics who claim that these houses are still unaffordable to those on low incomes and are instead more appropriate for middle class earners, as well as pointing out that 200,000 homes is not nearly enough.

Andy Knee, chief executive of property services provider Legal Marketing Society (LMS), called the initiative a good starting point, but not a solution, and raised concerns that it could create more problems than it solves. Mr Knee said, “The biggest concern around starter homes is that the scheme equips developers with a convenient escape route to build marginally less expensive homes, which many people will still be unable to afford.

“The impact of starter homes on social housing is also of concern as this policy could ultimately be more damaging than it is beneficial for those on middle to low incomes. The government’s new scheme, like Help to Buy, is only a short-term solution and addresses just one part of the problem,” Mr Knee said.

Housing minister Brandon Lewis has proposed an alternative strategy – to build 1m homes by 2020. This would require about 200,000 homes to be built each year to meet the target. The UK has not built this many homes since 1989, and, in comparison, just 124,520 homes were built during the 2014 to 2015 financial year.

Those calling for more housing have encouraged the government to focus their efforts on London and the South East, where the housing shortage is most obvious. This may force the government to consider building on the greenbelt that surrounds London, a route that it has previously resisted. .