According to evidence given to the Communities & Local Government Committee, targets to build 200,000 starter homes by 2020 means a third of new properties built will have to be starter homes.
However, local Councillors have concerns that many of these properties will still not be financially viable options to local residents.
Councillor Ferris Cowper, leader of East Hampshire District Council said: “We have an average house price-to-income ratio of 11.25. Even with the 20 per cent discount, this takes it down to around 10.
“Starter homes are a useful idea in areas with an exception site to put shared ownership homes on the land, but as a key part of an affordable housing strategy they are not really that useful.”
Councillor Keith House, Deputy Chair, Environment, Economy, Housing and Transport Board said: “Cambridge has similar values as the city and the price of an average home costs £450,000.
“Even though the area has a high level of average income, this isn’t enough and many people can not afford that price, meaning that there will be a shortage of homes.”
The starter homes initiative was announced in February 2015 as a way to get young people on the property ladder.
Under the scheme, builders that develop on unused commercial and industrial land will be freed from the requirement to provide affordable housing. As a direct result, young buyers will be able to purchase a property with a 20 per cent discount to the market value.
Martin Stewart, director of London Money, said: “Starter homes legislation is a sticking plaster over a huge, gaping wound. There have been 2 million properties sucked out of the supply chain through buy to let in the past 20 years, therefore 200,000 starter homes is going to make little or no difference.
“By the time they are built, HPI could have added a further 10 per cent to the price unless they can guarantee a price freeze the day the first brick goes down. And what happens after three years when that first-time buyer wants to move? We need to tackle the two-headed monster in this country of people wanting to own property, while never wanting to sell any.”