Will starter homes really meet housing need?

4 March 2016 | 4 March 2016

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Starter homes are the latest government scheme designed to help people afford to buy their own home, but is it the best option for people in need of housing, or for the communities where we work?

These homes, available to first-time buyers under the age of 40 with at least a 20% discount, are also to be classed as ‘affordable housing’ under planning rules.

However, earlier this week, a survey by the Town and Country Planning Association found that most councils would not consider starter homes affordable.

And we agree. In some of the more expensive areas where Sovereign builds homes – places like Windsor and Maidenhead, and Wokingham – it will be very difficult, and in some cases impossible, to provide suitable properties below the £250,000 starter home threshold.

But more than that, we’re concerned developers may build starter homes at the expense of traditional homes available for shared ownership or affordable rent – homes that meet a broader range of housing needs.

Particularly in the expensive, rural areas where we work and where social homes are sorely needed, it’d be very unlikely that any affordable housing for rent would be built if starter homes were defined as affordable.

Although many aspire to own their own home, there will always be people who cannot afford to buy, and the potential lack of affordable rented homes could leave them out in the cold.

But even when we look at people who can afford to buy, we need to ask ourselves – are starter homes the best option?

We conducted our own analysis and found the incomes needed to purchase starter homes are higher than those needed to purchase a shared ownership home.


For the majority of our current residents, on low incomes, a starter homes is a non-starter, while shared ownership can work and can be flexed to suit the individual or family’s needs.

This week we responded to a consultation on starter homes and asked the government to consider if starter homes really reflect the needs of the communities we build in.

And why introduce a new homeownership product into this complex market? Particularly when the government subsidy for starter homes is not safeguarded for future reinvestment, as it would be in shared ownership homes?

We need to thoroughly review housing markets to make sure we’re providing a broad range of housing products that meet people’s needs.

This is essential before we begin building. Otherwise, we could be in danger of flooding the market with products that people don’t want, or simply can’t buy, at the expense of those much-needed homes for affordable rent.


This blog appears in the March issue of Sovereign News, our newsletter to stakeholders.