News | Published November 05 2019

Watchdog unveils failed government plan for new "starter homes"

The National Audit Office has discovered that government plans for 200,000 new homes to be built for first-time buyers in England have failed to deliver a single property.

The plan, first announced in 2014 and committed to in the 2015 Conservative election manifesto, was for new “starter homes” to be built and sold at a 20 per cent discount to target under-40s, as a means of tackling the affordable housing crisis.

However, legislation to get the project off the ground was never passed through parliament, which the National Audit Office blames for its failure. The legislation had, however, been expected to pass this year.

The government drew upon its “great track record” for building houses in its defence, while Labour criticised the project as a failure.

Labour MP Meg Hillier, who chairs the Public Accounts Committee, said that no homes were built despite the government “setting aside £2 billion to build 60,000 new starter homes”.

Hiller added: “Since 2010 many housing programmes announced with much fanfare have fallen away with money then recycled into the next announcement.

"The Ministry for Housing, Communities and Local Government needs to focus on delivery and not raise, and then dash, people's expectations.”

Labour shadow housing secretary John Healey accused the Conservatives of ten years of failure in dealing with the issues facing housing, along with millions of pounds, adding that “the country needs a Labour government to fix the housing crisis.”

A spokesperson for the ministry pointed out that house building has reached its highest level in all but one of the last 30 years, saying: “we have a great track record…with 222,000 homes delivered last year, and 1.3 million in total since 2010, including over 430,000 affordable homes.”

The plan for starter homes was to have the properties built across the country by the end of the decade, with £2 billion having been set aside for the first 60,000 as per Hillier’s comments.

However, the National Audit Office found that between 2015-16 and 2017-18, the Ministry of Housing, Communities and Local Government spent roughly £174 million on acquiring sites originally intended for the starter homes, only to use them for more general housing, of which only a fraction was affordable.

That, coupled with the absence of necessary legislation, meant that even new homes which conformed to the relevant specifications were unable to be marketed as starter homes, putting off developers.

The NAO added that the original government budget set aside for the project has now been exhausted.

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Authored by

Scott Challinor
Business Editor
November 05 2019

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