Lewis: Changes will allow poorest to buy

George Osborne announced yesterday a doubling of affordable housing investment to £4bn from 2018, with the vast majority directed towards discounted homes to buy.

In response to fears that those on incomes too low to buy would be left without options, Mr Lewis, housing minister, said he hoped Starter Homes could be combined with Help to Buy to make them affordable to those on incomes of £20,000 and less.

Speaking to Inside Housing after the Budget, he said: “If you take a Starter Home and link it with Help to Buy, it does provide an opportunity for people, even right down to those lower incomes, to afford to buy.”

Mr Lewis said he hoped this would apply to even those on council housing waiting lists.

Research by homelessness charity Shelter this summer showed Starter Homes would be unaffordable to those on low incomes in almost all areas. Combining the policy, which offers homes at a 20% discount, with Help to Buy would make it accessible to more people, but it is not clear if lenders would be happy to offer mortgages on this basis.

Despite the focus on homeownership, Mr Lewis said affordable rented accommodation would still be “part of the mix” in housebuilding, through existing grant commitments and councils ability to borrow.

This weeks Spending Review revealed that from 2018/19, affordable housebuilding investment will be doubled to £2bn per year to fund 60,000 Starter Homes, 135,000 shared ownership homes and 10,000 Rent to Buy homes.

Mr Lewis said around £1bn of grant funding which remains unallocated under the 2015/18 programme would also be used to “promote homeownership” but said he did not want to “pre-judge” how the cash would be split between rent and ownership.

He said housing associations would have “a big role to play” in providing the new homeownership products.

David Orr, chief executive of the National Housing Federation (NHF), said he was “pleased” to see the government commit to an increase in funding for housebuilding.

He added: “Clearly the challenge is to keep an affordable rented programme going.” Brendan Sarsfield, chief executive of Family Mosaic, said his association would continue to build low-cost rented homes through cross-subsidy. “We are not going to lose sight of our number one role, which is providing homes for those on low incomes,” he said.

The Spending Review allocated £2.3bn of grant to build 60,000 Starter Homes, among the 200,000 the government hopes to build during this parliament.