Latest Public Sector News

18.02.16

Government starter homes still out of reach for most families – LGA

Starter homes will not be affordable for the majority of families who need them and the House of Lords should help ensure that councils have the means to supply houses for local needs, the Local Government Association (LGA) has stated.

New research from the LGA shows that discounted starter homes prices will be out of reach for all people in need of affordable housing in 220 council areas (67%), and for more than 90% in 80 (25%) council areas. People in need of affordable housing are defined as those who have to spend more than 30% of their household income to rent or buy a home.

The LGA is urging the House of Lords to back amendments to the controversial Housing and Planning Bill allowing councils to ensure a mix of affordable homes are available based on local needs, and to ensure that councils have the means to invest in the vital infrastructure home buyers and communities will rely on.

Cllr Peter Box, LGA housing spokesperson, said: “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.”

Last year Chartered Institute of Housing figures revealed that the number of affordable housing projects completed has fallen from 53,172 to 36,352 in the period 2009-15.

The government has promised to build 200,000 starter homes, available at 20% below the market value, by 2020, and scrapped rules that require developers to build affordable homes to rent.

However, the LGA’s analysis shows that a 20% discount would make it possible to buy a discount starter home in just 45% of council areas with a 5% deposit, including areas in the north and the East Midlands.

A 20% deposit would allow buyers to purchase a house in 79% of areas, including a third of areas in Yorkshire and Humber and the West Midlands.

However, in London, where discounted houses are capped at £450,000 instead of £250,000, an average earner in 85% of boroughs will need a greater deposit than 20% to buy a starter home.

The LGA has launched a housing commission to look at the role of councils in housebuilding, shaping communities, supporting tenants to find sustained employment.

The commission is open to evidence from councils, partners and individuals until 26 February. To find out more and submit evidence, click here.

 

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