A Labour council in London has come out against the government’s plan to offer 30 per cent discounts to first time buyers purchasing new-build homes.
Under the government’s First Homes proposal - announced shortly before the Coronavirus outbreak - first-time buyers would get a 30 per cent discount on certain new homes in their area.
However, the lower price for new-builds are effectively cross-subsidised by the developers reducing the affordable housing contributions demanded of them at planning permission stage.
Now Hackney council in east London says the government should scrap the scheme in the wake of the Coronavirus pandemic.
According to Hackney council analysis, submitted in its response to the government’s consultation on the plans, it is wrong to have the scheme at the expense of paying for “genuinely affordable social housing in new developments” funded through the long-established system of Section 106 agreements.
A similar ‘Starter Homes’ initiative was announced by the government in 2015, promising 200,000 new homes with £2.3billion in funding, but was abandoned last year with no homes built.
The council says First Homes won’t make housing affordable for most people in Hackney, or provide a single new council or socially rented home for the 13,000 families on its housing waiting list.
“Rather than forcing through this Starter Homes on steroids plan – a policy failure already shown to be unworkable – ministers should be pumping funding now into a new programme of council and social housing that will get the country back on its feet and help those in housing need” says a statement from the council.