The Government has just finished consulting on proposals to allow developers to replace affordable rented homes with so-called 'starter homes'. These will be available to first time buyers under the age of 40 at a discount of 20%. In London these starter homes could cost up to £450,000.
Ministers say it will help people onto the housing ladder and increase the number affordable homes.
However, analysis by Lambeth Council shows that they would be out of reach for the majority of families. The mortgage on a 2 bed starter home in Brixton would cost an estimated £1,732 per month. This would put it out of reach of all but the wealthiest 14% of Lambeth housholds. Hackney Council have estimated that a couple would need an income of £71,000 to fund a mortgage to buy an average starter home, compared to the average household income of £33,000.
Lambeth's consultation response points out that the need for affordable homes for rent in Lambeth is extremely high but the proposals will weaken the ability of local authorities to deliver this sort of housing. Instead resources will be diverted into unaffordable starter homes.
Cllr Matthew Bennett has written previously about the Government's flawed housing policies, Think the housing crisis can't get worse? Think again. Starter Homes are more evidence of the Government's misguided approach to tackling the housing crisis.
You can read the full consultation response here.