Starter home housing project fails to deliver

Meg Hillier MP

The National Audit Office (NAO) reports that despite the government announcing in 2015 that it intended to create 200,000 starter homes, none have been built to date as the necessary legislation is not in place.

Between 2015-16 and 2017-18, the Ministry of Housing, Communities & Local Government (MHCLG) spent almost £174m on acquiring and preparing sites originally intended for building starter homes. These sites are now being used for housing more generally, some of which is affordable housing.

In a statement, Meg Hillier MP, chair of the Committee of Public Accounts, said: “Despite setting aside over £2 billion to build 60,000 new starter homes, none were built.

“Since 2010 many housing programmes announced with much fanfare have fallen away with money then recycled into the next announcement. The Department needs to focus on delivery and not raise, and then dash, people’s expectations.”

Starter homes were intended to be houses built exclusively for first-time buyers under the age of 40 and sold at a 20% discount. The November 2015 Spending Review provided £2.3 billion to support the creation of 60,000 starter homes.

The Housing and Planning Act (2016) set out the legislative framework for starter homes. However, without additional secondary legislation, even houses that conform to the intended starter home specifications cannot be marketed as starter homes. MHCLG expected to introduce the secondary legislation and planning guidance required in 2019, but it has not yet presented the regulations to Parliament. It no longer has a budget dedicated to the delivery of starter homes.