Member Article

Government affordable housing will be 'out of reach for majority of people'

The government’s affordable housing plans will do little to help the majority of most first-time buyers, according to research by Savills and the Local Government Association (LGA).

Under the scheme, the government has vowed to construct 200,000 homes in England that can only be sold to first-time buyers at a discount of at least 20% of the market rate.

Built on brownfield sites, the homes will also be capped at a maximum value of £450,000 in London, and £250,000 elsewhere.

However, research released today by the LGA has shown that, even at the discounted rate, starter homes will still be out of reach for all people in need of affordable housing in 220 councils, and out of reach for 90% of those in need in a further 80 councils.

The report also found that an average earner with a 5% deposit looking to buy an average price house with the 20% discount applied would still only be able to buy an affordable home in 45% of all council areas in England.

Furthermore, an average earner living in 85% of London Boroughs would need a deposit greater than 20% to buy an average priced home with the discount applied.

The findings are a blow to the government who are hoping to tackle the acute nationwide housing shortage causing house prices to continue to rise.

Peter Box, spokesperson at the LGA, commented: “This new analysis shows that starter homes will be out of reach for the majority of people that are in need of an affordable home.

“Not everybody is ready to buy, and it is crucial that councils are still able to ensure there is a mix of homes that are affordable for those people that need them.

“In some places, such as the North-East and Midlands, the scheme will give people better chance to get on the housing ladder. However, a national scheme will not work for every area and fewer people will benefit from Starter Homes in areas where the housing crisis is most acute.

“Councils must have the flexibilities to shape the number, location and types of starter homes to ensure that they meet local need, and the powers to secure vital investment in associated roads, schools, health and other community services that people will rely on.

“The private sector has a key role to play in solving the housing shortage, but it cannot build the 230,000 needed each year alone. Councils need to be able to ensure genuine affordable homes continue to be built for rent and sale across the whole country for future generations and the millions of people stuck on waiting lists.”

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