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Couples 'will struggle to buy Starter Homes'
A couple on an average salary would struggle to buy a home at a 20% discount in almost half of all council areas in England, new research has shown.
According to Savills, buyers on median incomes would face a cash shortfall in 48% of areas – and virtually all of London and the South East – when buying a Starter Home.
Yesterday, David Cameron announced developers would be allowed to provide Starter Homes, which offer buyers a 20% discount on the market price, to meet affordable housing requirements instead of social or affordable rented units.
Savills’ research shows a couple seeking a mortgage up to a maximum of 3.5 times their income would come up short in every London borough, and in two-thirds of the capital, they would face a shortfall of more than 30%.
In the South East, buyers would come up short in 90% of areas, with shortfalls of more than 20% in half of all areas.
Map
The product – which would be capped at £250,000 nationally and £450,000 in London – would however be affordable to a couple in almost all areas north of the Midlands, the research showed (see map below).
The consultancy said the caps could mean effective discounts of much more than 20% in London and the South East, which might make the product more affordable than its modelling suggests.
Susan Emmett, research director at Savills, said: “We believe that there will be demand for Starter Homes in all parts of the country. The key question to be answered is to what extent it will displace market sales.”
