In April 2015, the Conservative Party manifesto committed to “200,000 Starter Homes, which will be sold at a 20% discount and will be built exclusively for first-time buyers under the age of 40”. The November 2015 Spending Review subsequently provided £2.3 billion to support the delivery of 60,000 Starter Homes, of the 200,000 previously announced. Between 2015 and 2018, government’s policy towards Starter Homes shifted.
In May 2018, the Minister of State for Housing and Planning stated that the government had spent an estimated £250 million of the Starter Homes Land Fund, but in July 2018, the Ministry of Housing, Communities & Local Government (MHCLG) clarified that it had spent £250 million buying land to build affordable properties from two funds, the Starter Homes Land Fund and the Land Assembly Fund, with work under way to get the land ready for development, but that building had not yet started – and not one home has yet been built.
The Government now has an “ambition” to build 300,000 new homes a year from the mid-2020s – but despite the hundreds of millions of pounds spent, the fate of the 200,000 Starter Homes pledged in the 2015 Conservative manifesto is unclear.
Key findings of the NAO report on the Starter Homes project:
- No Starter Homes have been built to date. The funding originally intended for Starter Homes has instead been spent on acquiring and preparing brownfield sites for housing more generally, some of which is expected to be affordable housing
- MHCLG expected to introduce the legislation and planning guidance required for Starter Homes in 2019 but it is yet to lay the regulations in Parliament.
- The Department no longer has a budget dedicated to the delivery of Starter Homes. After the 2015 manifesto pledge, the housing white paper in 2017 shifted housing policy. The original target of 200,000 Starter Homes morphed into a target to help 200,000 households into home ownership through a range of government-backed schemes.
- The November 2017 Autumn Budget reallocated the funding earmarked for Starter Homes to the £9 billion Shared Ownership and Affordable Homes Programme and the Land Assembly Fund (LAF).
- Between 2015-16 and 2017-18, the Department spent almost £174 million preparing sites originally intended for building Starter Homes – though no Starter Homes have been built on that land. In 2016-17 and 2017-18, the Department spent £151 million under the Starter Homes Land Fund (SHLF), but that spending also has not supported the building of Starter Homes.
Instead, the Department used the SHLF to acquire and remediate suitable land, to then sell on to developers.
In July of this year, after the UK’s Covid lockdown exposed and exacerbated the shortage of affordable housing in the UK, the Government announced new, sweeping reforms to the building planning regulations. It is not clear how this impacts or interacts with the Government’s previous targets, allocated and re-allocated, and spent funding, intended to build affordable new homes.
In October, the Committee will question senior MHCLG officials on what is happening with plans to address the affordable housing crisis. If you have evidence on the issues raised in this inquiry please submit it here by Thursday 15 October.