Discounted Starter Homes Will Not Help Many Families According To Research

Claims have arisen that the new discounted starter homes could be out of reach for the majority of families in need of an affordable home in many parts of the UK.

The government proposed 200,000 new starter homes that would be available to first time buyers over the next 5 years with a minimum discount of 20% off the market value with discounted prices capped at £450,000 in London and £250,000 elsewhere.

However, according to an analysis by the Local Government Association (LGA) that the national starter homes scheme could help some people onto the housing ladder it won’t help everyone who wants one of these homes.

The LGA pointed out that crucial details of the scheme are yet to be confirmed. However there is a concern as to whether it will help the fewest numbers of people in areas where the housing affordability crisis is most acute and it questions whether the scheme will be out of reach for many people in need of an affordable home in the majority of local areas.

The analysis by real estate services firm Savills for the LGA reveals that discounted Starter homes prices will be out of reach for all people in need of affordable housing in 67% or 220 council areas and are out of reach for more than 90% of people in need of affordable housing in a further 80 council areas.

The LGA is urging Lords to back amendments allowing councils to continue to ensure a mix of affordable homes 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.

Furthermore, the LGA are insisting that discounts on starter homes should also be applied to them when they are resold to benefit future generations and help them also get on the housing ladder.

David Gascoyne, Manager of Sales and Lettings at Residential Estates said “It’s a positive step forward that the government is thinking about new schemes to help first time buyers, however a national scheme may not be the way forward as house prices and salaries vary greatly countrywide and what might work in North West might not work in the Midlands, for example. Flexibility is key with this scheme.”