In a second major announcement yesterday, David Cameron said councils will no longer be able to force developers to provide affordable rental homes in their schemes.
Instead of developers having to build homes for housing associations to take over and offer at affordable rents, developers will be able to provide the new breed of starter homes instead.
What is so far known about starter homes is that they will be available to buy at a 20% discount by first-time buyers aged under 40. They will not be able to sell or let their properties at full market value for five years. The discounts will apply to homes worth up to £250,000 outside London, and up to £450,000 in the capital. However, the original scheme suggested that starter homes would only be available on ‘brownfield’ sites’, and it is not clear whether this will now apply.
Also unclear is the definition of a first-time buyer – for example, a couple who have never bought together before but where one of them may previously have owned a home as part of a previous relationship.
The changes to Section 106 agreements were announced by the prime minister at the Conservative party conference.
Cameron said: “Those old rules which said to developers: you can build on this site, but only if you build affordable homes for rent. We’re replacing them with a new rule.
“You can build here, and those affordable homes can be available to buy.”
Cameron told delegates that the Conservatives are the party of home ownership.
He said: “What people want are homes they actually own.”
He pledged to deliver 200,000 starter homes by 2020 – but the NAEA said this was not good enough.
NAEA managing director Mark Hayward said: “The announcement from David Cameron on his plans to build 200,000 new homes is good news, but it simply isn’t enough bricks and mortar to lift us out of the crisis we currently find ourselves in.
“And as always with the word ‘affordable’, who actually defines what affordable housing is?
“We first heard this pledge in Cameron’s pre-election campaign, and we still support the sentiment.
“However, other initiatives such as the Help to Buy scheme still remain in place and it boils down to the fact that we are still waiting to see new homes being built; and whilst we wait, capacity remains stretched, infrastructure is not in place and house prices continue to grow.
“Our latest housing report found that sales made to first-time buyers fell to the lowest level since July 2014.
“One in five sales (20%) were made to FTBs in August, compared to 23% in July and 24% in June, indicating that movement in the market is getting tougher and tougher.
“First-time buyers have been squeezed out of the market for some time; it’s taking young buyers longer to get their foot on the first step of the ladder, which in turn increases pressure on the rental market.”
Comments (2)
“In a second major announcement yesterday, David Cameron said councils will no longer be able to force developers to provide affordable rental homes in their schemes.”
And about time to, not to say we don’t need affordable housing but many builders have begrudged being blackmailed for seem time now, which has restricted new build growth/public desirability with some developments. Affordable housing as before( it worked) should be provided by the public sector not “using” the private.
Trumpeting the word ‘affordable’ gets headlines for the Conservatives but it masks the irrefutable fact that even with a 20% discount a home at £200,000 is 7.5 times the average national income figure. Before the 1980s when politicians started their incompetent meddling in the financial and property markets the multiplier was 3.5 to 4 times for decades and was, generally, ‘affordable’. We have a generation coming along that has known nothing but historically low interest rates and who, suckered by the headlines of ‘affordability’, may well find themselves in trouble when those rates inevitably rise. And please tell me where those coming along 5 years down the line will find their ‘affordable’ homes as unless the annual build rate of discounted homes can be reached and consistently maintained these discounted properties will be up for sale at full market value, with not enough ‘affordable’ replacements available.