The scrapping of a government plan to deliver discounted starter homes has been branded “deplorable” by a cross-party committee of MPs.
85,000 young people had been waiting to no avail to acquire an affordable home in which to live, the Commons public accounts committee report said on the 2015 initiative, which was scrapped earlier this year – despite not a single home being constructed.
The scheme initially promised the construction of 200,000 homes, which would then be sold at a 20% discount.
That’s despite £173m spent on buying land, with the scheme now on course to deliver just 6,600 homes – and to shortly be replaced by a new scheme.
The committee said the government had been “stringing expectant young people along for years” and that a rapid succession of housing policies – there have been 19 different housing policies since 1997 – had not helped the matter.
The committee also criticised the Ministry of Housing, Communities and Local Government (MHCLG) for failing to say how it will reach its ambition of building 300,000 homes a year in England, and accused ministers of an “alarming blurring” of the definition of affordable housing.
Lack of supply
The report comes a week after annual figures showed construction of the cheapest social housing remained at close to its lowest level since the 1980s – with just 6,566 homes built between March 2019 and April 2020.
A total of 57,644 affordable homes were built in England, but that only around a third of the 145,000 new affordable homes experts say are needed annually.
Official figures on Tuesday revealed housebuilding starts fell by almost 40% during the pandemic.
“The department for ‘housing’ is at risk of losing the right to the title,” said Meg Hillier, chair of the committee.
“It has serially, constantly failed to deliver affordable new homes or even make a serious attempt to execute its own housing policies or achieve targets before they are ditched, unannounced – costs sunk and outcomes unknown.
“MHCLG needs to ditch the false promises and set out clear, staged, funded plans, backed by the necessary laws and with a realistic prospect of delivering.”
The final nail for the starter homes scheme came when mortgage lenders raised the difficulty of valuing properties with discounts.
David O Leary, Policy director at the Home Builders Federation, said: “[The scheme’s failure] demonstrates the importance of ensuring that proper consideration is given to the practical implementation of interventions and their market impacts as early as possible.”
The PAC said the government remained unable to say when its new starter home policy – called First Homes, which offers 30% discounted homes to local first-time buyers – will deliver the first properties.
“Its reliance on developer contributions to fund First Homes is part of an opaque, complex mechanism which risks less money being available to local authorities for housing and infrastructure,” the report said.
“The department does not have a timetable or target for delivering First Homes but is planning a pilot to build 1,500 First Homes ‘within the next couple of years’, which it wants to learn from before further planning of the new scheme.”
It also said urged for MHCLG to clarify how it will achieve its ambition of 300,000 new homes per year by the mid-2020s.
David Renard, the Local Government Association’s (LGA) housing spokesperson, said: “The government must hand councils the powers to build new homes at a scale not seen since the 1970s, when local authorities built 40% of new homes.
“Councils fully support the aspiration of people wanting to buy their own home and helping those that want to buy to be able to.
“However, not everybody is ready to buy.”
Polly Neate, chief executive of Shelter, said: “This report shows how the government’s approach to solving the housing emergency has been focused on all the wrong solutions.
“The government has persisted with schemes for expensive homes, which often end up not getting built.
“There is wide public and political support for social housing across the country, but progress is nonexistent.”
An MHCLG spokesperson rejected the PAC report, calling it “misleading”.
The spokesperson said: “Since 2010, over 663,000 households have been helped into home ownership through government schemes.
“We’re also investing over £12bn in affordable housing over the next five years, the largest investment in a decade, and our new First Homes scheme will help local people and key workers buy their own home, in the area they already live, at a discount of 30%.”
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