Government starter homes policy will mean fewer affordable homes for Oxford

Published: Wednesday, 7th October 2015

The Prime Minister's announcement on starter homes will mean fewer affordable homes for rent for people and families on the lowest incomes in Oxford, City Council Leader Councillor Bob Price has said.

Under the current planning rules, in exchange for planning permission, councils require housing developers to construct a certain number of affordable homes for rent to needy households on low incomes.

However, the new policy will exempt developers from doing so and instead require them to build subsidised homes for sale. The starter homes will be available at a discount of 20% to the open market value, and the price cap will be £250,000 outside London and £450,000 in the capital.

Councillor Bob Price said: "This policy might be welcomed by the very few people who are both eligible and can afford it. But in Oxford it will mean fewer homes for affordable rent.

When combined with the government's policies on right to buy and forcing councils to sell council homes, reducing our ability to require homes for affordable rent means we won't be able to build the homes desperately needed by key workers and the 3,500 people on our housing waiting list.

It is also very likely that any marginal affordability today could be massive unaffordability as and when interest rates rise from their current low levels. As we have seen from the government’s Help to Buy scheme, high land prices meant that only 22 Oxford households bought their own home in its first 18 months. In the same period around 2,700 homes were sold in the city.”

Over the past decade, private developers have delivered 873 affordable homes in Oxford of which 616 were for social rent. In addition, a further 536 rented units have been delivered by Registered Providers and Oxford City Council directly. Under the new government proposals, many of these homes could be lost and fewer social rented units built in the future.

According to new research by the charity Shelter, average earning families will be priced out of Starter Homes in 58% of local authorities by 2020, while families earning the new ‘National Living Wage’ will be priced out of Starter Homes in 98% of the country.