Starter Homes: affordable housing at an unaffordable cost?

By James Carson

A report from homelessness charity Shelter has suggested that one of the UK government’s key affordable homes initiatives will be out of reach for many people on average incomes.

The ‘Starter Homes’ initiative was launched in December 2014, offering first time buyers under the age of 40 in England a discount of up to 20% off the normal price of new homes built on brownfield land. During the general election campaign, David Cameron promised that by 2020 200,000 Starter Homes would be built by private builders and sold for no more than £450,000 in London and £250,000 in the rest of England.

The government has claimed that first-time buyers paying an average of £218,000 for a home would save £43,000 under the Starter Homes scheme.

However, analysis of the programme by Shelter suggests that it will not help the majority of people on the new National Living Wage or average wages into home-ownership in England by 2020.

Cheaper homes but not cheap enough

Shelter looked at three typical household formations in each local authority in England earning a range of different salaries to assess whether they were likely to be able to afford to buy a Starter Home. The study found that:

  • Starter Homes for families earning average wages will be unaffordable in over half of local authorities across England in 2020.
  • Families on the National Living Wage will only be able to afford a Starter Home in 2% of local authorities.
  • Single people on low or average wages will struggle to afford a Starter Home in 2020 in the majority of local authorities.
  • London, the South East and the East have the lowest number of areas where affordable Starter Homes under the schemes threshold could be built, despite high demand in these areas.

The scheme is being funded by changes to the planning system, exempting developers from their obligations to include affordable housing in building schemes. The government says that these ‘Section 106’ obligations typically add £15,000 to the cost of each new home being built.

However, even before its latest analysis, Shelter was expressing concerns that the removal of these requirements would lead to Starter Homes ‘cannibalising’ genuinely affordable housing. There are also questions about whether the homes will come with the necessary infrastructure in place.

Government pressing ahead

Nevertheless, the government is pressing ahead with the programme and extending its scope. In August, chancellor George Osborne announced that the Starter Homes scheme would be extended to some villages as part of the government’s rural productivity plan. At the same time, some of England’s major house builders have pledged their support for the scheme, including Barratt, Cala and Taylor Wimpey.

Even if it meets the target of 200,000 new homes by 2020, the Starter Homes scheme on its own will not solve the national housing shortage. Around 250,000 homes need to be built each year to keep up with demand, but in 2014 fewer than 119,000 homes were built in England. As the Shelter report concludes, the Starter Homes programme is no silver bullet for the housing crisis:

“Starter Homes would primarily help those on very high salaries or couples without children, but they are not a good replacement for other forms of affordable housing and will not help the majority of people on average wages struggling to get an affordable, decent home. The government needs to look very closely at this policy before going down the wrong track.”


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The Idox Information Service can give you access to a wealth of further information on housing; to find out more on how to become a member, contact us.

Further reading*

The home front (interview with Brandon Lewis outlining plans for housing)

Building to order (development on brownfield sites)

A living countryside: responding to the challenges of providing affordable rural housing (CPRE Housing foresight paper no 5)

Housing summary measures analysis

Tackling our housing crisis: why building more houses will not solve the problem

*Some resources may only be available to members of the Idox Information Service

Why the future of public transport has to be green

Image by flickr user Justin Pickard via Creative Commons

Image by flickr user Justin Pickard via Creative Commons

By Morwen Johnson

Ending our use of oil, coal and natural gas by the end of the century? It seems an impossible task, but this week’s G7 Summit closed with the announcement that the leaders of 7 leading industrial nations had agreed to phase out the use of fossil fuels. As one of the G7, the UK is part of this long-term commitment to reduce greenhouse gas emissions. It is also legally-bound, via The Climate Change Act (2008), to cut carbon emissions by 80% by 2050.

These national and international targets will only be met however if we all make practical changes to our patterns of energy consumption. Organisations like the Energy Saving Trust Foundation and NESTA have pointed out that providing new technologies is not enough to increase public engagement with alternative energy. Success is dependent on getting real people to use these technologies in everyday situations.

Use of renewable energy in public transport

Earlier this week I attended an event on the use of renewable energy in public transport. Not being a transport specialist, but interested from the point of view of community development and social exclusion, it was a useful introduction to some of the innovative work that is underway in Europe.

Organised to present the results of the REPUTE (Renewable Energy in Public Transport Enterprise) project, the event explored the challenges of ensuring accessible public transport in rural areas. People in rural areas typically travel 50% further than people living in urban areas. Travel which is essential to daily life such as going to school or work, going shopping or getting to doctors and hospitals all requires longer journeys, mostly by car or bus. A lack of integration between different modes of transport also makes travel by car more convenient in rural areas.

Pilot projects showcased at the event included personal travel planning in Fort William; solar-powered real-time bus information signs in the Highlands and Islands region; and electric vehicle rental in rural towns in Portugal.

A new guide written by Oxford Brookes University was also launched at the event and includes lots of examples of community-based transport and energy schemes.

Signs of progress

I picked up on a few heartening signs of a shift in attitudes. Many local authorities are publicly supporting alternative energy use in their fleets and providing charging points. A recent survey showed that Scottish councils in particular are leading the way in the UK in the adoption of electric vehicles, with Dundee placed in the number 1 spot and South Lanarkshire, Glasgow and Fife also in the top 5.

  • Aberdeen now has the largest fleet of hydrogen fuel buses of any authority in Europe.
  • 2 of Edinburgh’s bus routes have switched completely to low carbon hybrid vehicles.
  • There are more electric vehicles in Scottish car clubs than the total in car clubs in the rest of the UK.
  • Elsewhere in Europe, Oslo’s initiative to open up bus lanes to electric vehicles has become a victim of its own success with the announcement in May that the law is being changed. A fifth of new cars bought in Norway in the last 3 years have been electric.

A key aspect of pilot schemes is to introduce the public to new energy solutions in a way that is engaging. For example, visitors to the Brecon Beacons National Park can hire electric cars to travel around the area, turning eco travel into a fun activity in itself. A new ‘poo bus’ which runs in Bristol and is fuelled by bio-waste, is a witty way to spark debate about alternative fuel sources. And in Oxford, the city is transforming into a Living Lab for integrated transport experimentation.

Public transport as eco-transport

The need for a transport system which is cleaner and less-energy dependent is clear – the transport sector is the fastest growing source of greenhouse gas emissions.

However investing in innovative renewable energy technologies at a time of budget constraints, requires government and local authorities to show leadership and vision. More importantly, there won’t be a step change in behaviour and attitudes without imaginative approaches to community engagement. Locally-led projects such as those highlighted by REPUTE’s guide are a great way to do this.


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