• Issue 36

  • May 2018

The Source

The Starter Home Debate to Date… Government Confirms £250 Million Spent, None Built

The Government originally campaigned in its 2015 election manifesto on a flagship policy of building houses which would be sold exclusively to first-time buyers at a discount of 20%.

Prior to this, Starter Homes were originally proposed by the Policy Exchange thinktank as an attempt to reprioritise home ownership over affordable rent. However, given the latter’s low completions, the former Housing Minister, Gavin Barwell’s first major speech in September 2016 indicated that Government was considering abandoning its pledge to build 200,000 starter homes by 2020 due to a shift towards supporting the rental sector. With that, Starter Home policy essentially had no political purpose.

The 2017 Housing White Paper sought to create a wider definition for Affordable Housing with less focus on Starter Homes.

Up until this point the industry had complained that much of the fine detail as to how starter homes would operate in practice was unknown. There were uncertainties around how to sell identical homes at two different rates, for example, telling a 41-year old they must pay full market value, whilst the 40 year old next door got 20% off. Furthermore, who was to manage and enforce the regime or how would lenders see things when seeking funds to develop new sites.

The Starter Homes proposals were the subject of Lords amendments which sought to allow councils to meet the requirement by delivering other types of affordable housing in place of Starter Homes where supported by local evidence for demand. This reasonable amendment was rejected by the Government who argued, blindly, that it would undermine the manifesto commitment to build 200,000 Starter Homes by 2020.

Having now spent £250 million without a Starter Home being built, the government has apparently spent on land to build affordable properties and work to prepare sites for development.

The Starter Homes saga essentially emphasises how such government policies are the result of the whims of individual politicians chasing votes, rather than rational decision making, looking at the evidence and making choices based on what the country actually needs.