The new rules mean that developers will now be able to offer ‘starter homes’ for first-time buyers under 40, instead of being forced to offer only low-cost rented homes in new developments.
South East land brokers, Aston Mead, believe yesterday's announcement by the Prime Minister about changes to housing policy need to be accompanied by a release of Government land at subsidised prices.
Adam Hesse, Aston Mead Director, had this to say: “Being able to buy rather than rent is all very well. But what the Prime Minister announced today is just the tip of the iceberg. If developers are going to build more homes at the cheaper end of the market, they will need to be able to acquire land at cheaper prices too. No average land owner is going to sell land cheaply – so it’s down to the Government to take the lead.
Local authorities are some of the largest landowners in the country. They need to release land at the sort of price that will enable low-cost homes to be built. Otherwise, market forces will dictate what prices land is being sold for, and developers will have to build more expensive homes to make their purchase viable.”
Under the Government proposals, the price of the ‘starter homes’ after the discount is applied will be capped at £250,000 and £450,000 in London. Those who buy them will be prevented from selling them for a quick profit under the new policy, which experts predict could provide as many as 200,000 new homes by 2020.
Adam continued: “Clearly, developers need to make money so that they can stay in business. As long as they make a profit, they don’t mind how they do it. So if the release of subsidised land makes the building of starter homes possible, they will have no problem building them as part of an overall mix.”
David Cameron is already under pressure to water down controversial plans to offer the ‘right-to-buy’ to housing association tenants currently passing through Parliament, amid claims it will hit those in housing need.
Adam Hesse added: “The building of new homes – including starter homes – is often hampered by local authority planning rules. Many regulations demand certain kinds of ‘affordable housing’ which actually hinder house building rather than encouraging it.
These new measures will go some of the way towards introducing some flexibility into the system. But it’s the price and availability of land that is the determining factor – and the Government needs to play its part in releasing land at subsidised prices, on the basis that developers then build homes under the new ruling.”
