Posts with tag: starter homes

First Wave of Starter Homes to be Built This Year, Says Housing Minister

Published On: January 4, 2017 at 12:24 pm

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The first wave of the Government’s Starter Homes for first time buyers will be built this year, reports the Housing Minister, Gavin Barwell.

However, the pledge has run into immediate controversy over the prices of the Starter Homes and lack of rental properties on the sites.

Barwell promised that the first wave of the discounted homes on brownfield sites will be built this year in 30 local authority areas in England.

Labour and homelessness charity Shelter have insisted that it’s nonsense to describe the homes as “affordable”, as some will cost up to £450,000 each.

Furthermore, Barwell was unable to confirm how many Starter Homes will be built this year, making the original target of 200,000 by 2020 impossible, according to Labour.

Ministers had suggested that, under Theresa May’s leadership, the Government would refocus the Starter Homes scheme to include some properties to rent, as well as to buy.

The properties to be built this year will be made available exclusively to first time buyers aged between 23-40, at a discount of at least 20% below market value. A cap of £250,000 outside London and £450,000 within the capital will be put in place.

Yet, perhaps more controversially, the Starter Homes will count towards the Government’s wider target to build 400,000 new affordable homes.

First Wave of Starter Homes to be Built This Year, Says Housing Minister

First Wave of Starter Homes to be Built This Year, Says Housing Minister

Barwell insists: “This Government is committed to building Starter Homes to help young first time buyers get on the housing ladder.

“This first wave of partnerships shows the strong local interest to build thousands of Starter Homes on hundreds of brownfield sites in the coming years. One in three councils has expressed an interest to work with us so far.”

The first 30 local authorities have been selected because they have the ability to build the homes quickly, under a £1.2 billion Starter Homes Land Fund.

However, the housing spokesperson for Labour, John Healey, believes: “These so-called Starter Homes are a symbol of the Conservative record on housing.

“Ministers launched them in 2014, but will only start to build the first in 2017, promised they’d be affordable for young people when they’ll cost up to £450,000, and pledged to build 200,000 by 2020, but no one now believes that’s possible.”

And Roger Harding, the Director of Communications at Shelter, adds: “Efforts to build more homes are welcome, but these Starter Homes are only likely to benefit people who are better off and already close to buying.

“The Government recently signalled that it wanted affordable to start to actually mean affordable when it comes to building homes. We would urge them to keep to this, rather than continuing with Starter Homes, which have been shown not to work.”

The Managing Director of the National Association of Estate Agents, Mark Hayward, has mixed feelings: “Today’s announcement may feel like a welcome start to the New Year, but, as always, we need to see these plans put into swift action. The dream of homeownership is too far out of reach for thousands of aspiring first time buyers, and the building of new homes on disused brownfield sites, as well as a 20% discount for buyers aged 23-40, will go some way to bridging this gap.

“News that the Government will deliver 14 new garden towns and villages outside of existing settlements will also relieve some of the pressure on supply and demand, which should in turn act as a catalyst to help first time buyers fulfil their dreams of homeownership. However, we must not throw caution to the wind.”

He explains: “The Government has made promise after promise, and pledge after pledge to help first time buyers get onto the housing ladder, but until we see these houses built, we won’t hold our breath.”

The Government claims that the new developments will support wider growth and regeneration, including in some town centres.

The first areas will begin construction later this year, along with sites supported by the Homes and Communities Agency.

The Local Government Association has called for councils to be given discretion on building Starter Homes, to ensure enough properties to both buy and rent are available in each development.

Housing Minister Backs the Private Rental Sector in First Major Speech

Published On: September 14, 2016 at 10:54 am

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The new Housing Minister, Gavin Barwell, has backed the private rental sector in his first major speech.

Barwell, who was appointed as Housing Minister in July, used his speech at the RESI Conference to shift Government policy away from a focus on homeownership.

He insisted: “We need to build more homes of every single type and not focus on one single tenure.”

He also suggested that the Government is considering abandoning its pledge to build 200,000 Starter Homes by 2020, due to a shift towards supporting the private rental sector.

The Government’s Starter Homes policy involved building homes for first time buyers, sold at a discounted rate of 20%. However, Barwell explained that such policies, which encourage homeownership and increase the level of demand, could affect the amount of homes built to rent.

Housing Minister Backs the Private Rental Sector in First Major Speech

Housing Minister Backs the Private Rental Sector in First Major Speech

He said: “There’s a little bit of a tension between the overall supply objective and measures specifically to help people onto the housing ladder.”

Barwell indicated that affordable rental homes could now be included in the Starter Homes target.

He added: “The way you make housing in this country more affordable to rent and buy is you build more homes. There is still a role for the Government doing specific things to help people onto the first rung, but this can’t be at the exclusion of all else.”

In the past, Government policy has largely focused on homeownership, at the expense of private rental sector development.

Additionally, buy-to-let landlords are now facing an additional 3% Stamp Duty charge when they purchase a rental property.

Barwell commented: “A growing number of families and young professionals are choosing the [private rental sector], and while homeownership is still the goal for the majority, many will rent for some years before they buy.

“I’m very clear that our ambitions will never be achieved without a significant boost in institutional investment to the [private rental sector], to ensure more choice and quality for people living in rented accommodation.”

Adam Challis, the Head of Residential Research at JLL, describes the Starter Homes policy as “a big distraction”, adding: “This is welcome news, as it signals this Government’s desire to support housing across all tenures.

“The private rented sector is the fastest growing tenure, but had been overlooked under old policy. This is the first step in putting that right.”

Barwell also gave his backing for build-to-rent schemes, highlighting one by Essential Living in north London and another by Pocket Living in south London, which uses modular techniques.

He said: “Recent growth in the bespoke rental market has been impressive, but this progress must be expanded.”

London’s Deputy Mayor for Housing, James Murray, also expressed his backing for the private rental sector, while defending his 50% affordable housing target.

He said: “If we’re going to increase supply and have affordable [housing] within that, you need to use every route of delivery, and if build-to-rent can deliver at scale and speed, then we should support that.”

Is the Government’s change of focus good news for landlords?

Housing Crisis Causing Many to Put off Major Life Decisions

Published On: June 7, 2016 at 8:34 am

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Britain’s housing crisis is causing many people under 45-years-old to put off major life decisions, according to a new study by YouGov on behalf of homelessness charity Shelter.

Shelter reveals that 59% of people in that age group have put significant milestones, such as marriage, starting a family or moving for work, on hold. The research indicates how the housing crisis is affecting much more than just where people live.

Housing Crisis Causing Many to Put off Major Life Decisions

Housing Crisis Causing Many to Put off Major Life Decisions

Over the past few years, house prices have continued to rise, with the average property value in London surpassing £600,000 for the first time last month.

Data from recent months also shows that rent prices have been increasing constantly since 2010, putting even further pressure on prospective first time buyers saving for a deposit.

Research has found that as a result of the chronic housing shortage, the average age of a first time buyer is now 38. This is expected to rise to 41 by 2025, according to financial services firm London Victoria.

However, the lack of affordable housing is also increasingly having an impact on personal lives.

The YouGov survey found that 19% of people under 45 have experienced a delay finding a job, while 16% have postponed getting married. Some 22% of respondents have put off having children because of their housing situation, while one in ten expect to delay their retirement from work.

The Government’s Starter Homes scheme was designed to boost homeownership. However, the initiative has been criticised, as the houses are still too expensive for most people on ordinary incomes.

The Chief Executive of Shelter, Campbell Robb, believes that young people have been left in limbo due to the shortage of affordable homes.

He says: “Everyone deserves the chance to have a home where they can put down roots and build a life for themselves. But our ever-growing housing crisis means millions of young people are being left behind – unable to reach many of the crucial life milestones that were taken for granted by the generations who came before them.

“As Shelter reaches its 50th year, it’s heart-breaking to see so many young people still living in a housing limbo, facing a frustrating lifetime of instability where they feel unable to move forward with their lives.”

He insists: “We cannot make this crisis someone else’s problem, and it’s the responsibility of all of us to help fix it.”

Average Tenant Has Spent £40,000 on Rent in the Last Five Years, Says Shelter

Published On: March 3, 2016 at 3:34 pm

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The average private tenant in England has spent more than £40,000 on rent over the last five years, according to a new report from homelessness charity Shelter.

The findings arrive as the Housing and Planning Bill continues making its way through the House of Lords today.

Shelter found that the average cost of renting a two-bedroom property is enough to put down a 20% deposit on a typical first time buyer home.

In London, the average rent on a two-bed home is much higher, at £89,000, according to the charity’s calculations.

The Chief Executive of Shelter, Campbell Robb, says: “Our drastic shortage of affordable homes is leaving millions of people stuck in their childhood bedrooms in a bid to save money, or in expensive and unstable private renting, with little hope of ever saving for a home to put down roots in.”1 

The Housing and Planning Bill seeks to introduce a series of changes that David Cameron believes will turn generation rent into generation buy.

It includes extending the Right to Buy scheme to housing association tenants, which Shelter says will aggravate the housing shortage.

Councils would be forced to fund the policy by selling off their most high-value assets. However, peers are warning that the policy could lead to a decline in the supply of affordable homes.

Average Tenant Has Spent £40,000 on Rent Over the Last Five Years, Says Shelter

Average Tenant Has Spent £40,000 on Rent in the Last Five Years, Says Shelter

Cross-bench peer Lord Kerslake, the former head of the Government’s Homes and Communities Agency, warns: “It’s very hard to make the numbers work and it’s very hard to find the land.”

Lord Kerslake has jointly tabled an amendment to the Housing and Planning Bill, which would force councils to replace the properties sold off with similar homes in their own area.

Peers are also expressing their concerns over the Government’s Starter Homes scheme.

These new build homes would be sold at a 20% discount to first time buyers under 40. The properties can be worth up to £450,000 in London and £250,000 elsewhere.

However, by urging housebuilders to prioritise Starter Homes, there are concerns that local authorities will throw out genuine affordable housing.

Kerslake comments that the policy would be a “cash bonanza” for homebuyers, many of whom could have bought their own home without the scheme.

“It’s a hell of an offer for people who have to be reasonably well-heeled to afford it,”1 he states.

A study by the Town and Country Planning Association has revealed that four out of five councils do not believe that Starter Homes are affordable.

Dame Kate Barker, who conducted a review of housing supply for Gordon Brown, told the House of Lords Economic Affairs Committee in December: “I do feel uncomfortable about a set of policies that are designed to be supportive of people who are just on the cusp of being able to buy and need nudging over the edge.”1

And the Shadow Housing Minister, John Healey, has said: “The forced sale of council homes will lead to a huge, irreversible loss of genuinely affordable homes to buy and rent.

“At a time when more affordable homes are desperately needed, the Government is forcing the sale of many of those that are left – not to tenants, but to buy-to-let landlords and overseas speculators.

“This will make finding an affordable home even harder for young people and families on ordinary incomes. But it’s also bad news for taxpayers, because it means more people renting privately and housing benefit rising to cover the cost.”1

However, a spokesperson for the Department for Communities and Local Government insists: “The Government is also supporting the boldest plan for housing by any government since the 1970s and is creating a bigger, better private rented sector that will increase choice for tenants.”1

Recent research found that the private rental sector is expected to grow to 30% of all households in the next 30 years.

1 http://www.theguardian.com/society/2016/mar/03/tenant-paid-40000-rent-five-years-shelter

Loophole Means Buy-to-Let Landlords Could Rent Out Starter Homes

Published On: February 29, 2016 at 12:44 pm

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A loophole in the Government’s Starter Homes scheme means that buy-to-let landlords could rent out discounted homes intended for first time buyers, according to the Liberal Democrat leader, Tim Farron.

The Starter Homes initiative, announced last year, offers new build homes to first time buyers under 40 at a 20% discount. The Government hopes to build 200,000 of these properties by 2020.

However, Farron warns that there is currently no requirement under the legislation for the person that buys the home to live in the property.

The Liberal Democrats claimed that the loophole could mean that wealthy parents give their children lump sums to buy the homes, which could then be

Loophole Means Buy-to-Let Landlords Could Rent Out Starter Homes

Loophole Means Buy-to-Let Landlords Could Rent Out Starter Homes

rented out.

Additionally, there is nothing to stop a property investor making a deal with a first time buyer who bought a starter home at a discounted price to share the profits of selling the property on or letting it.

However, the Department for Communities and Local Government (DCLG) insists that ministers are “clear that Starter Homes will not be buy-to-let properties”.

The Government will soon begin consulting on rules as part of the Housing and Planning Bill to include letting restrictions on Starter Homes.

The Lib Dems have also raised concerns that homes bought through the scheme can be sold on at market rates, meaning that just one generation of first time buyers will benefit.

Farron believes: “The Government’s plans for Starter Homes are very badly designed and will fail to help the right people. They will be snapped up by the sons of millionaires and make them a huge profit.

“Those who can’t turn to the bank of mum and dad should not lose out. It is vital the Government makes changes to its housing policy.”1

A spokesperson for the DCLG responds: “We want to ensure that anyone who works hard and aspires to own their own home has the opportunity to do so… We are clear Starter Homes will not be buy-to-let properties and will be consulting shortly on rules to include letting restrictions.”1 

The Chief Executive of housing charity Shelter, Campbell Robb, comments: “Whilst the Government is offering these discounted homes to a select few, for those who aren’t so lucky, all they’re offering is more time spent in expensive and unstable private renting, or living with mum and dad well into their 30s.

“This crisis can be turned around, but only if the Government moves beyond schemes that only help the well off, and starts investing in homes that ordinary families can actually afford as well.”1 

We will bring you the latest property news and landlord law at LandlordNews.co.uk.

1 http://www.independent.co.uk/news/uk/politics/loophole-means-buy-to-let-landlords-could-exploit-government-starter-homes-a6899056.html

Housing and Planning Bill will Only Help Landlords, Claims Generation Rent

Published On: January 29, 2016 at 2:52 pm

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Unlicensed HMO landlord ordered to refund £84,877 to tenants

The Housing and Planning Bill is set to go the committee stage in the House of Lords, but are its policies designed for the benefit of landlords alone?

Dan Wilson Craw, the Policy Manager at lobby group Generation Rent, seems to think so.

Housing and Planning Bill will Only Help Landlords, Claims Generation Rent

Housing and Planning Bill will Only Help Landlords, Claims Generation Rent

“For someone so concerned about both turning generation rent into generation buy and balancing the books, David Cameron really should have helped to draft his housing bill,” he says.

He calls the measures on the Right to Buy scheme extension and Starter Homes initiative, “a very roundabout way of guaranteeing a larger private renter population, with a bigger bill for the taxpayer”.

Councils will be forced to sell off their highest-value assets in order to fund the Right to Buy extension to housing association tenants. Wilson Craw believes: “High-value council homes will go straight to investors, who will let them out at market rents.”

He continues: “Many properties bought under Right to Buy will end up with landlords when the owners decide to trade up.”

And it doesn’t stop there. Wilson Craw adds: “And the 200,000 Starter Homes sold to first time buyers at a discount will disappear into the open market after five years when those lucky few cash in their subsidised hand-out. The other two million aspiring homeowners are left with nothing.”

So what does this mean for the private rental sector? “With a fall in the number of homes being let at social rents, and far fewer homes being built than are needed to meet demand, more housing benefit claimants will be paying private rents that will rise ever higher,” he states.

Wilson Craw concludes: “Unless rents fall by enough to allow families to stop relying on housing benefit and start saving, the Prime Minister can kiss his dream of a home-owning democracy goodbye.”1 

Keep up-to-date with the developments of the Housing and Planning Bill on LandlordNews.co.uk, and remember to check daily for the latest landlord updates.

1 http://www.independent.co.uk/voices/comment/david-camerons-flawed-housing-policy-will-only-help-landlords-a6840656.html