Can 200,000 Starter Homes Be Built by 2020?

The claim: The government will not be able to achieve the manifesto commitment to build 200,000 starter homes by 2020.

The verdict: It currently seems unlikely because money has only been set aside for 60,000 starter homes. Also, the current plan is for 22% of new developments to be starter homes, which would mean one million suitable homes being built by 2020 – that would be a significant acceleration of house building.

street with different houses

The government announced on Tuesday that it had given the go-ahead for the construction of thousands of starter homes.

Starter homes are new homes built for first-time buyers between 23 and 40 years old, sold at least 20% below market value. The maximum price after the discount has been applied is £250,000 outside London and £450,000 in the capital.

The Conservatives made a commitment in their manifesto for the 2015 general election to build 200,000 starter homes – the pledge to do so by 2020 was repeated in the call for expressions of interest in building starter homes that was released last March.

The document from March talked about £2.3bn of funding from the 2015 Spending Review to support up to 60,000 starter homes, which would still leave the government well short of the target.

The government is not talking a great deal about starter homes now, promising more details of how it will deliver them in the housing White Paper, which is due later this month.

The funding for the programme is supposed to pay for things like local authorities making brownfield sites suitable for residential development.

At the moment, the government wants to use the planning system to get affordable housing built. Essentially, developers must agree that of every five homes they build, one should be a starter home.

In a recent consultation, the government said under the new system at least 22% of all new builds would be starter homes. That means almost one million new homes would have to be built by 2020 to hit the government’s 200,000 target.

In 2015, there were a total of 170,730 new homes built, which would not be enough over three years, even if all of them gave 22% as starter homes.

But perhaps the May government will drop the commitment made under David Cameron or there will be another route to the creation of starter homes in the forthcoming White Paper.

James Lavers, Business Development Manager, at Build-Zone Insurance, said:

“If it is possible to build that number of houses over the next 3 years then it is vitally important that they are built of the correct materials, methods and construction. From an insurance point of view, it is important that the homes are well built and without any possible structural defect.”

He continued:

“It is also crucial for new buyers/ first time buyers to understand firstly that a reputable company has built the property but secondly that this is backed up but a warranty provider with a strong financial backing. Build-Zone is backed by A-rated insurers in Lloyds of London, has its own independent consumer code for Builders and Developers and is an Associate Member of the CML and its Warranty is authorised by all major lenders.”

References: BBC