No Starter Homes Built Despite Promise of 200,000 By 2020

The government promise to build 200,000 starter homes in England for first-time buyers has resulted in none being built, according to the National Audit office.

The policy, announced in 2014, was aimed at building starter homes for buyers under the age of 40 which would be sold at a 20% discount. However, the legislation to enable the project was never passed. The Labour Party has condemned the policy as an abject failure, yet the government says it has a ‘great track record’ for house building.

Former prime minister, David Cameron, hailed the scheme in the 2015 Conservative Party manifesto as a means of tackling the affordable housing crisis. The project was additionally intended to encourage the wider growth and regeneration of local communities and some town centres.

The homes were intended to be built across the UK by the end of the decade and more than £2bn was set aside for the first batch of 60,000 properties.

According to the National Audit Office (NAO), the Ministry of Housing, Communities and Local Government (MHCLG) spent around £174m on acquiring and preparing sites for starter homes. These were to have been built in locations such as Plymouth, Bury, Basildon, Stockport, Bridgwater, Cinderford and Bristol.

Nonetheless, the NAO has said the sites were now being developed for housing generally, only some of which was affordable. The spending watchdog said the scheme had failed because the required legislation and planning guidance had not been passed by Parliament, despite expectations that it would have done so by 2019.

Four wasted years

Consequently, even new properties conforming to the intended specifications cannot be marketed as starter homes, a concern that has made it difficult to attract developers. The watchdog also confirmed the government no longer has a budget dedicated to the starter homes scheme.

Meg Hillier, Labour MP and chair of the Public Accounts Committee, commented: “No starter homes were built, despite a budget of more than £2bn having been set aside to construct 60,000 new properties. Since 2010, many housing programmes have been talked up and then faded away with the money recycled to the next scheme.

“The MHCLG should focus on delivery and not perpetuate this cycle of raising people’s hopes and then disappointing them.”

John Healey, Labour’s shadow housing secretary, argued that the Conservative Party had spent millions of pounds and wasted four years. “The country needs a Labour government to solve the housing crisis, after almost 10 years of Conservative failure to tackle the problem.”

However, a spokeswoman for the housing ministry claimed that house building was at its highest level for all but one of the last 30 years. “We have a great track record, with 222,000 homes delivered last year and 1.3m in total since 2010, including more than 430,000 affordable homes.”

Positive working relationship

David O’Leary, policy director at the Home Builders Federation (HBF), said that although the programme to build starter homes had not materialised, the scheme had not been a total failure. He went on to say that the project had been successful in developing a positive working relationship among local government, building contractors, mortgage lenders and valuers.

O’Leary added: “The difficulty in creating an effective set of conditions points to the importance of ensuring from the outset that due consideration is given to the practical implementation of strategic measures and their impact on the market.”