Gavin Barwell, Minister of State for housing, has announced that the first of thousands of new Starter Homes will be built on brownfield sites across the country this year.
Starter homes are new homes built for first-time buyers between 23 and 40 years old, sold at least 20% below market value. The maximum price after the discount has been applied is £250,000 outside London and £450,000 in the capital.
The government has targeted 200,000 Starter Homes by 2020, however, it is argued that the government will not be able to implement the commitment to build these. This argument stems from the fact that it is known that only 60,000 of these starter homes has been allocated funds (circa £2.3 billion).
The government’s current plan is that developers will have to commit to ensuring that 1 in every 5 homes built will have to be a starter home.
This means almost one million new homes would have to be built by 2020 to hit the government’s 200,000 per year target. Is this realistic? Probably not. Is this viable? Yet to be seen.
It is completely understandable that many are sceptical about the government’s ability to push forward on this successfully, a view echoed by the Shadow Housing Minister, John Healey, who also claims that the current wave of starter homes is 3 years overdue and still unaffordable.
In 2015, there were a total of 170,730 new homes built, which would not be enough over three years, even if all of them gave 22% as starter homes.
We will certainly be keeping an eye on this, and it will be particularly interesting to see how our clients will factor this in over the coming year.
If you are interested in learning more about Brownfield Sites or the Starter Homes Scheme, please email [email protected] or call +44 (020) 3640 6420.