Government's starter homes programme won't help London's first-time buyers

Lauren Fedor
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First-time buyers won't be helped by the government's starter homes programme, the report suggested (Source: Getty)

Londoners hoping to buy their first home will not get much help from the government, according to a new report out today.

In the report, Shelter, the housing and homelessness charity, takes issue with the government’s affordable house building policies, saying its flagship “starter homes” programme will fail to help most first-time buyers.

Prime Minister David Cameron has promised to build 200,000 homes for first-time buyers by 2020. The homes would be built by private builders and then sold at 80 per cent of market value, or no more than £450,000 in the capital and £250,000 in the rest of the country.

But Shelter said despite high demand, London, the Southeast and the East have the lowest areas where affordable starter homes could be built.

The charity said that London is “the most extreme example” of where the scheme would be unlikely to help people on average wages.

Noting that “most of London, and particularly inner London, is unaffordable for the majority of groups,” Shelter said the only people who could afford to buy “in a majority of local authorities” under the programme would be households with two working adults, no children, and higher wages than 90 per cent of the population.

“The fact that starter homes will do little to help in the areas that need it most due to the high cost of housing shows that it cannot be a scheme that should be wholly relied on to relieve the housing crisis,” the authors of the report said.

“It is clear that other forms of housing will be needed alongside the starter home programme to ensure that people on low or average incomes are not left behind, particularly if they are living in the areas where there is the highest demand for housing.”

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