Stonewater, a leading affordable housing provider which owns and manages around 8,700 properties in the South West, fears the Government’s new Starter Homes initiative, which offers first time buyers aged under 40 a 20 per cent discount on new home market rates, will not help the majority of prospective homeowners in the region who will continue to be priced out of the market.
“We recognise the aspiration to home ownership and think it’s important that we find ways of helping as many people as possible to achieve this dream,” says Jonathan Layzell, Stonewater’s Assistant Director for Development. “But we can’t just focus on helping people afford expensive housing, we need to address the cause of the problem which is a supply issue – house building in the South West has not kept up with population growth.”
While Stonewater welcomes the introduction of starter homes which will meet the needs of some people, it says it’s not a panacea for solving the region’s chronic housing shortage. “If we’re serious about tackling the problem, we need a mixed house-building strategy that increases housing supply across all housing tenures, not just home ownership,” explains Jonathan Layzell. “That also means creating targets and incentives for building homes for shared ownership (part rent/part buy), private rent and social rent so that as many people as possible can get a first foot on the property ladder.”
He believes that high property prices and low wages, have made it virtually impossible for most young people and young families living in the region to become homeowners. “They simply don’t earn enough to accumulate savings to put down on a deposit. The problem is that with the Government’s definition of ‘starter homes’, those costing up to £250,000, only people who can already afford to buy on the open market are likely to benefit from this scheme while the most vulnerable in our society, and those most in need, risk being forgotten.”
At £194,000, the average house price in the South West is as much as ten times the average annual salary in some parts of the region, which puts home ownership out of reach for most ordinary people. After London, the South West has more private renters than anywhere else in the country and one of the highest rent-to-income ratios. Of the 30 per cent of renters in the region, more than half are living in private rented accommodation where they are paying more than a third of their earnings (35%) on rent.
“Young people, particularly those living at home or stuck in expensive private rental accommodation, need a choice of housing options which also enable them to stay close to their community and places of work, at a price they can comfortably afford,” says Jonathan Layzell. “Currently housing associations build 45,000 affordable homes and 5,000 private homes across the country every year and we understand local market needs. We’re therefore keen to work with all levels of government to bring our expertise and considerable investment potential together to tackle the housing crisis and deliver the right mix of homes in the right place at a price people can truly afford.”