First-time buyers told not to hold their breath

The managing director of the National Association of Estate Agents (NAEA), said he welcomed news that housing minister Gavin Barwell MP has given the green light for the construction of thousands of new starter homes.

But he remained to be convinced that it would help first-time buyers get onto the housing ladder.

Mr Hayward commented: "It may feel like a welcome start to the New Year but as always we need to see these plans put into swift action. The dream of home ownership is too far out of reach for thousands of aspiring first-time buyers."

While he acknowledged the building of new homes on disused brownfield sites, as well as a 20 per cent discount for buyers aged 23 to 40 would "go some way to bridging this gap", he warned first-time buyers not to "hold their breath".

We need to build more new homes, so it’s good to see the government follow through with its Autumn Statement pledge. John Eastgate

According to Mr Hayward: "However, we must not throw caution to the wind. The government has made promise after promise and pledge after pledge to help FTBs get on to the housing ladder, but until we see these houses built we won’t hold our breath.”

This came as John Eastgate, sales & Marketing Director, OneSavings Bank, said the government’s expanded £7bn affordable housing programme was a step in the right direction but not quite far enough.

He said: "It is generally accepted that we need to build more new homes, so it’s good to see the government follow through with its Autumn Statement pledge with this new £7bn affordable housing programme."

However, he agreed that even the government's pledge to build 200,000 new homes by 2020 would not solve the housing crisis, although it was "a step in the right direction".

As far back as 2004, the Barker review on housing and affordability - Review of Housing Supply: Delivering Stability and Securing our Future Housing Needs - said in order to boost the availability of housing in the UK and make it more affordable for first-time buyers, an additional 120,000 homes would need to be built a year. 

The latest government plans therefore fall far short of this recommendation.

Mr Eastgate added: "Critically, the government has expanded the scope of the scheme to cover several tenures, including affordable rent, and rent to buy, which will come as some relief to the growing number of people who are renting for longer as they save up for a house of their own.

“All eyes now turn to the Housing White Paper expected later this month, which we hope will back up this action with clear house-building targets, and a realistic plan for achieving them.”

As mentioned in chancellor Philip Hammond's first Autumn Statement, the  government also plans to create 14 new ‘garden’ towns and villages outside of existing settlements.

This may relieve some of the pressure on supply and demand, which should "as a catalyst to help first-time buyers fulfill their dreams of home ownership", Mr Hayward added. 

simoney.kyriakou@ft.com