Liberal Democrat leader Tim Farron is claiming that the government’s flagship Starter Homes project could allow properties to be bought by investors rather than first time buyers.
The government initiative, announced at last year’s Conservative party conference, pledges that 200,000 Starter Homes will be built by 2020 and sold to first time buyers aged below 40 with a 20 per cent market discount.
However, in an interview in The Independent newspaper, Farron claims that there is no requirement in the legislation that the purchaser should be a first time buyer, or an owner occupier of any kind.
He claims it could mean that wealthy parents could give their children lump sums to buy Starter Homes, which could then be let out or occupied by people over 40 who were not FTBs.
There would also be nothing to stop an investor striking a deal with a young first time buyer in which they bought a Starter Home for a discount price and then shared in the profits of a sell-on or rental income, Farron claims.
It is thought that the Department of Communities and Local Government will at some point stage a formal consultation on the Starter Homes initiative, in which it is possible an amended description of their use could be attached - effectively outlawing buy to let or other activities that would prevent the properties being used by first time buyers.
“The government’s plans for Starter Homes are very badly designed and will fail to help the right people. They will be snapped up by the sons of millionaires and make them a huge profit. Those who can’t turn to the “bank of Mum and Dad” should not lose out. It is vital the government makes changes to its housing policy” Farron told the newspaper.