Tuesday, 17 January 2017

Government policies 'won't create extra homes'

Two major government housing policies will not create additional homes, property experts have warned today.

A report to be unveiled this afternoon at the MIPIM property conference in France by consultancy Carter Jonas finds that Starter Homes and the Help to Buy equity loan scheme are “likely to be competing with each other and are not creating any net addition to the housing stock”. The report does not, however, provide any figures to justify this claim.

The report, Affordable Housing: a Race to Zero, also suggests that in order to be “relevant” and “not just a discount scheme to any buyer”, the government should apply an income cap to its flagship Starter Homes scheme.

At present there is no means-testing or local connection test for Starter Homes, which are to be built instead of traditional affordable rented housing and sold at a 20% discount to first-time buyers under the age of 40.

Carter Jonas called on the government to extend the £2.3bn Starter Homes scheme to cover rented properties too, which could be supported by housing associations.

In addition, the report calls for debt caps on local authorities to be lifted and for “greater financial freedom” for housing associations so that they can build more homes.

It states: “There are many housing associations which are not actively engaged in building new properties and could be drawn into this process either as part of consortia or by making use of available funding and expertise.”

As part of this, the consultancy said that the government should consider revising the extension of the Right to Buy to housing associations, arguing that “there are more effective ways of delivering additional affordable housing without reducing existing ‘core’ affordable housing stock, such as through freeing housing associations and local authorities to build more homes”.

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