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No starter homes delivered for cost of £196m, says NAO

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  • 05/11/2019
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No starter homes delivered for cost of £196m, says NAO
The government has failed to deliver on a 2015 Conservative Party manifesto promise of 200,000 new starter homes after the scheme was shelved, the National Audit Office (NAO) has revealed.

 

The target to deliver the homes exclusively for first-time buyers under the age of 40 and discounted by 20 per cent was replaced with a new goal in 2017.

The original promise was watered down to become a target of delivering 200,000 households into home ownership, including through shared ownership, Right to Buy and Help to Buy.

The Autumn Budget 2017 reallocated the funding earmarked for starter homes to a pot of £9bn for Shared Ownership, the Affordable Homes programme and the Land Assembly Fund.

The NAO concluded that no new starter homes have been built by the government and that the Ministry of Housing Communities and Local Government (MHCLG) no longer has a budget dedicated to delivering the properties.

Under the original policy, MHCLG spent £174m preparing sites intended for building starter homes and Homes England invested £15.4 million in brownfield sites. MHCLG spent a further £6.45 supporting local authorities through the programme bringing the total outlay to £195.9 million.

“It is clearly disappointing that there has been so little progress on delivering the starter homes the country needs, but if the land earmarked by the project is still going to be used for housing then it is not entirely wasted,” said Neil Knight, business development manager, part-exchange and assisted move, at Spicerhaart.

“It remains crucial to bring more land into use for new homes to meet the demand of first-time buyers and people looking either to up-size as families grow or downsize in later life,” he added.

 

New home completions plummet since 1980s

The NAO investigation further revealed that the number of new home completions has fallen by 19 per cent over the past 40 years, to 165,000 in 2018, down from 204,000 in 1980. 

The decline was driven by a 96 per cent drop in completions by local authorities to 3,000 in 2018, against 75,000 in 1980.

For housing associations, completions rose 42 per cent to 27,000 last year, up from 19,000 in 1980.

And in the private sector, completions grew by 22.7 per cent to 135,000 in 2018, compared to 110,000 in 1980.

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