Ministers’ planned 200,000 “starter homes” will be out of reach for families on average incomes in almost 60 per cent of English council areas, say researchers.
The homelessness charity Shelter calculated that the average family — on expected annual earnings of £48,919 by the end of the decade — would be able to afford the properties in only 42 per cent of council areas. Shelter said someone would need income of £50,266 a year, or £76,957 in London, to buy a starter home.
People living on the government’s proposed “ living wage” of £9 an hour would be able to buy the new properties in only 2 per cent of local authority areas.
David Cameron launched a plan for 100,000 starter homes last year and, during the general election campaign, the prime minister doubled the commitment to 200,000 properties by 2020.
The homes, restricted to first-time buyers under 40, would be built by private builders and sold at a 20 per cent discount to market price.
Companies will be incentivised by the government dropping the usual obligations for affordable housing and “Section 106” agreements to provide local infrastructure.
Buyers will be expected to have a 5 per cent deposit and a 20 per cent “Help to Buy” government equity loan.
But the research from Shelter challenges ministers’ rhetoric that the homes will be within reach for younger people on typical incomes.
The charity said the people most likely to access the scheme would be those on higher salaries — many of whom would be able to buy a home without help.
Shelter based its calculations on the government’s own projections for rises in house prices and incomes during the next five years.
“Before the election, hard-working voters were all promised a shot at a home of their own,” said Campbell Robb, chief executive of Shelter. “Our research has proven that the government’s plans only work if you’re well off, and don’t plan on starting a family.”
The prices of the starter homes would be capped at £450,000 in London and £250,000 elsewhere.
That will pose problems, given expected house price increases in the coming years. Shelter calculates that in many areas — for example 61 per cent of the south-east — house prices will exceed the thresholds.
The level of housebuilding in the UK has recovered from its historic lows during the long recession, after ministers announced initiatives to encourage more development. Builders have been boosted by low interest rates and Britain’s return to sustained economic growth.
But that recovery may have stalled: figures last week from the government showed that housing “starts” fell 14 per cent in the second quarter of the year.
The Conservative government has promised to extend the “ Right to Buy” to housing association tenants. Discounts on council house sales were increased under the previous Tory-led coalition administration.
Shelter’s calculations were not challenged by the government. But Brandon Lewis, the housing minister, said at the weekend: “We make no apologies about the fact that we are very focused on home ownership.”
Private renting has, in effect, doubled during the past decade, reaching more than 4m households.
Mr Lewis told The Sunday Times newspaper that it would be “nice” to build up to 1m homes by the end of this parliament, but admitted that this was not an official target.
The minister suggested that the government could revive its dormant plans for new garden cities. At present, there are only two in the pipeline — at Ebbsfleet in Kent and Bicester in Oxfordshire.
Mr Lewis said he was in talks with “three or four other places that are very, very keen” to have garden cities.