Most people do not believe that homes costing £250,000 should qualify as ‘affordable’.
The £250,000 price tag – or £450,000 in London – was cited by David Cameron last month.
In a speech to the Conservative party conference, he pledged to build 200,000 starter homes.
The Government’s Housing and Planning Bill, currently going through Parliament, proposes that the affordable new starter housing should be capped at £250,000 outside London and £450,000 in the capital.
But new research among 500 adults, carried out by Gorkana for conveyancing firm myhomemove, found that 66% thought that ‘affordable’ should mean homes costing under £120,000.
Even in London, the majority felt that to be called ‘affordable’, homes should cost under £160,000 – with the largest number saying that ‘affordable’ homes should be under £100,000.
The 500 who took part in the survey covered all regions and all ages.
In all but one age group – those between 18 and 24 – the strongest opinion was that ‘affordable’ should mean homes costing under £100,000. The youngest age group mostly plumped for ‘affordable’ meaning homes priced between £100,000 and £120,000.
Doug Crawford, CEO of myhomemove, said: “While we welcome initiatives designed to increase housing stock numbers, our research shows that these homes are far too expensive for the majority of the population to consider affordable.
“Last month, our own data showed that one in 20 homes are bought using a gifted deposit.
“So, even with an accelerated building programme to ease the shortage issue, unless these properties are capped at a much lower rate, very few families will be able to afford these ‘affodable’ homes.”
Comments (6)
If the average price paid in the UK is around £200,000 (as I believe was reported recently) then a figure of £250,000 as ‘affordable’ is very out of line – surely it should be less than the average?
And as it’s so location based, surely ‘affordable’ should be set to X times average local income?
Affordable is set by the market. We are being driven to think differently by government, Shelter and the like. I am sure we would all like to drive around in a super-car but that’s not affordable to most of us, so we put up with a ford focus. Some can’t afford that and use a bus or walk. Tough as it sounds that life! Most are still able to achieve a good life with hard work and a bit of luck; which is why this country is so attractive to immigrants. clearly some in society, such as the disabled and sick can’t and most of us have a social conscious and believe they should have support (except perhaps Cameron and his merry band) from the rest of society. Or is this an old fashion belief?
Unfortunately there is no factory churning out houses, as there is for cars! The market is distorted by planning permission, job markets, investors etc. I fully support the principle of affordable housing for key workers such as nurses, and of helping house the disabled and sick as you say, but I struggle to understand ‘affordable’ houses that are £50,000 pricier than the average house – it’s just political spin on something that in no way helps the housing crisis.
***
DISCLAIMER: I work in the south east
***
My area is not exactly a slum or anything, but it’s hardly posh or anything.
You can buy (if you are lucky) a tatty 650sq.ft. two bed flat with a 54 year lease for £140,000 in my area and an average 3 bed terraced house for £250k.
The mathematics say that a 1,000sq.ft new build (as part of a development) is likely to cost in excess of £120,000 to build to current code levels.
I would say that £250k for a BRAND NEW modest 3 bed 1,000sq.ft. is reasonable.
If a buyer has a sensible deposit (say 10%) and the house is sold on a part buy/ part rent basis (say 75%) the buyers need to come up with a 65% mortgage – that’s £162,500 equivalent to a repayment mortgage of £814 per month (AER 3.5%). That requires a joint salary of about £50,000 (assuming 4 times salary and the usual shared ownership calcs).
£250,000 sounds pretty affordable to me.
Sign me up!
The “problem” comes in areas where the average price of the average home is lower than this figure – because it looks expensive.
I think myhomemove are based in Leicester. A quick dig through the Land Registry Data for the year so far shows an average sale price of £196,310.36 from 5,468 transactions.
On that basis, of course £250,000 looks a bit expensive.
But you still can’t build that same house for much less than £120,000 and the builder needs to make a profit (else why bother?) and the land owner’s not going to just give the land away, are they?
Littlehampton?
I think the problem is also the public are not aware of part buy part rent. They think its social housing.
You then look at the other flip of the coin, if the buyer is aware of shared ownership seldom do mortgage advisers understand it. So they end up having to us an “On Site” adviser…