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Subsidised starter homes project criticised for being unaffordable

Thousands of new starter homes for first-time buyers will be built on brownfield sites in 2017, the government has announced, but the plans have been criticised by council leaders and charities for not going far enough.

Thirty areas across England will receive funding to build the new developments from the government’s £1.2bn Starter Homes Land Fund, which was first announced by the coalition government in 2014.

Buyers must be aged between 23 and 40 and will receive a discount of at least 20% below market value on properties worth up to £250,000 outside London or £450,000 in the capital.

The housing minister Gavin Barwell said: “This government is committed to building starter homes to help young first time buyers get on the housing ladder.

“This first wave of partnerships shows the strong local interest to build thousands of starter homes on hundreds of brownfield sites in the coming years. One in three councils has expressed an interest to work with us so far.”

The first 30 local authorities chosen for the scheme, including Blackpool Council, Bristol City Council and Sheffield City Council, were chosen on the basis of their ability to build the properties quickly, with the properties expected to go on sale next year.

However, experts have criticised the plans for not going far enough, arguing that even with the 20% subsidy many young people will still not be financially strong enough to benefit from the new homes.

Roger Harding, Shelter’s director of communications, said: “Efforts to build more homes are welcome, but these starter homes are only likely to benefit people who are better off and already close to buying.

“The government recently signalled that it wanted affordable to start to actually mean affordable when it comes to building homes. We would urge them to keep to this rather than continuing with starter homes, which have been shown not to work.”

The LGA’s housing spokesman, Cllr Martin Tett, seconded Harding’s concerns, hinting that councils should be given the discretion to ensure a mix of rental and purchase homes on new developments in order to make sure that the homes are genuinely affordable for new tenants.

Research undertaken by Savills for the LGA previously revealed that the average earner living in 85% of London boroughs, 49% of council areas in the south east and 40% in the south west would need a deposit greater than 20% in order to buy an average priced home under the plans.

Yesterday, the government revealed proposals for England's first garden villages on 14 sites across the country, saying the new developments could provide up to 48,000 homes.

The government is due to publish its Housing White Paper to discuss the country setting out its plans for building new homes later this month as it continues to attempt to tackle the UK’s housing crisis. PSE has discussed this in its Dec/Jan issue.

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