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Government to give 20% subsidy for £450,000 starter homes


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Old 04-01-2017, 12:34
Mark_Jones9
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Surely if the free housing market is working like its meant to work, the government should not need to be involved. And forcing developers to sell at 20% below market price is not part of a free market. If its should a good deal why does not the government built houses. Are we going to see retailers forced by the state to sell goods at 20% market value
They are only being forced to sell at a discount houses built on land they choose to buy off the state that are brown field sites made fit to build on by the state. The developers are choosing to buy the land and build the houses they know they will have to sell at 20% below market price. That 20% discount is offset by the developer not having to make contributions to the affordable housing funds or tariffs for general infrastructure pots (they still have to pay for infrastructure improvements needed due to the development).

Using the same or less money the government can enable and encourage the building of vastly more houses than it could directly build itself. Also housing built by the state has a poor record as far as quality and desirability.

The government already forces the sale of services at a discount in some circumstances. From free TV licence, to warm homes discount, to social tariffs.
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Old 04-01-2017, 12:53
Tassium
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They are only being forced to sell at a discount houses built on land they choose to buy off the state that are brown field sites made fit to build on by the state. The developers are choosing to buy the land and build the houses they know they will have to sell at 20% below market price. That 20% discount is offset by the developer not having to make contributions to the affordable housing funds or tariffs for general infrastructure pots (they still have to pay for infrastructure improvements needed due to the development).

Using the same or less money the government can enable and encourage the building of vastly more houses than it could directly build itself. Also housing built by the state has a poor record as far as quality and desirability.

The government already forces the sale of services at a discount in some circumstances. From free TV licence, to warm homes discount, to social tariffs.
This sort of spin isn't working any more mate.

Spin only works the first time it's used, before the reality is known.
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Old 04-01-2017, 12:56
Tassium
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While owning a home is nice there is no argument whatsoever to help people buy one.


If instead a government were to attempt to create an economy that works for everyone, such that a person could buy a home outright (if they wished) that would be reasonable.

So that would include "free" access to higher education for example, or subsidised public transport. Or many many other things that would end up with a person having the money to buy a house, if they wished, by their own efforts.


Handouts to the fairly well-off to buy a house is bizarre and un-Conservative
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Old 04-01-2017, 12:59
Mark_Jones9
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This sort of spin isn't working any more mate.

Spin only works the first time it's used, before the reality is known.
The reality is the government through various schemes is increasing house building. That is something I as a Labour voter agree with.

People resent the brown fields starter home scheme because homes will be sold at 20% below market price to people who are not poor and needy. But what is the alternative have the scheme with no obligation to the developer to sell at below market price to first time buyers who will be owner occupiers. So the scheme has no effect on driving down house prices, beyond the increase in housing supply. Is that preferable?
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Old 04-01-2017, 13:01
Dotheboyshall
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It says a lot when a 'starter home' is £250,000 outside London and £450,000 in London and the average UK salary is £26,500 and you pay higher rate income tax on a salary over £43,000.
It says a lot about how out of touch the government is with the real world. Plenty of properties for far less than those limits. It is after all supposed to be a starter home.
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Old 04-01-2017, 13:02
Tassium
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I think it's clear how the brand is all important when it comes to politics.

The Conservatives can get away with grotesque incompetence, corruption and corporate socialism.

While Labour have to be brilliant just to get a look at government, never mind actually stick around for a decade or two.
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Old 04-01-2017, 13:03
Mark_Jones9
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While owning a home is nice there is no argument whatsoever to help people buy one.
The argument is if it increases house building. Housing supply. We have a housing shortage.

If instead a government were to attempt to create an economy that works for everyone, such that a person could buy a home outright (if they wished) that would be reasonable.

So that would include "free" access to higher education for example, or subsidised public transport. Or many many other things that would end up with a person having the money to buy a house, if they wished, by their own efforts.

Handouts to the fairly well-off to buy a house is bizarre and un-Conservative
So would you find the scheme of the government making brown field sites fit to build housing on more acceptable if it did not include any obligations on the developers buying the land. So they did not have to sell at a discount to first time buyers who will be owner occupiers.
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Old 04-01-2017, 13:19
blueisthecolour
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Surely if the free housing market is working like its meant to work, the government should not need to be involved. And forcing developers to sell at 20% below market price is not part of a free market. If its should a good deal why does not the government built houses. Are we going to see retailers forced by the state to sell goods at 20% market value
We don't have a free marking in housing - we have a heavily regulated state planning system. The government restricts the rights of individuals to build housing on their land in order to keep existing homeowners happy.
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Old 04-01-2017, 13:33
tim59
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We don't have a free marking in housing - we have a heavily regulated state planning system. The government restricts the rights of individuals to build housing on their land in order to keep existing homeowners happy.
Well of cause there has to be a regulated state planning system, you cannot have people just buying land and be able to do what they like with it, if what they plan has a impact of on other people. And just because you own a house also does not give you the right to do what you like with it.
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Old 04-01-2017, 13:48
DW2
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So would you find the scheme of the government making brown field sites fit to build housing on more acceptable if it did not include any obligations on the developers buying the land.
But isn't part of the problem the criteria they've set? Nobody is arguing that the government shouldn't do something about the shortage of houses, it's the defining £250,000 as affordable that seems to be the area of contention.

They could do a survey of what type of housing is most needed in that area and tell the developer to build that mix. They could set a much lower amount so that it'll help those priced out of the housing market altogether. They could define affordable as the bottom 10% of house prices in that area based upon the previous year's land registry data. Instead they chose to help high earners who can't quite afford a large new build.

In some parts of the country £250k is significantly more than the average house price for the area leaving the builders to do pretty much whatever they want whilst the government misleadingly claim that affordable homes are on the rise. For example, the BBC article linked to in the original post says the areas chosen are Blackpool (average house price £123,476 according to Rightmove), Bristol (£282,000) Sheffield (£178,000) and Luton (229,991). So in three of those four areas the government is defining affordable as anything in the bottom half of the market.
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Old 04-01-2017, 14:15
CSJB
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But isn't part of the problem the criteria they've set? Nobody is arguing that the government shouldn't do something about the shortage of houses, it's the defining £250,000 as affordable that seems to be the area of contention.

They could do a survey of what type of housing is most needed in that area and tell the developer to build that mix. They could set a much lower amount so that it'll help those priced out of the housing market altogether. Instead they chose to help high earners who can't quite afford a large new build.

In some parts of the country £250k is significantly more than the average house price for the area leaving the builders to do pretty much whatever they want whilst the government misleadingly claim that affordable homes are on the rise. For example, the BBC article linked to in the original post says the areas chosen are Blackpool (average house price £123,476 according to Rightmove), Bristol (£282,000) Sheffield (£178,000) and Luton (229,991). So in three of those four areas the government is defining affordable as anything in the bottom half of the market.
According to the land registry the current average house price for the uk is £217 000.
This is of course the average price of a home (not a starter home for wealthy people).
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Old 04-01-2017, 14:28
Mark_Jones9
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But isn't part of the problem the criteria they've set? Nobody is arguing that the government shouldn't do something about the shortage of houses, it's the defining £250,000 as affordable that seems to be the area of contention.

They could do a survey of what type of housing is most needed in that area and tell the developer to build that mix. They could set a much lower amount so that it'll help those priced out of the housing market altogether. Instead they chose to help high earners who can't quite afford a large new build.

In some parts of the country £250k is significantly more than the average house price for the area leaving the builders to do pretty much whatever they want whilst the government misleadingly claim that affordable homes are on the rise. For example, the BBC article linked to in the original post says the areas chosen are Blackpool (average house price £123,476 according to Rightmove), Bristol (£282,000) Sheffield (£178,000) and Luton (229,991). So in three of those four areas the government is defining affordable as anything in the bottom half of the market.
it is not a scheme designed to provide "affordable housing". The housing does not meet the government's definition of "affordable housing". Local authorities through planning permission will dictate the mix of housing. The maximum of £450,000 in London, £250,000 outside London is down to local authorities wanting to be able to have a mix of housing in the developments on brown field sites. The scheme should probably be renamed. Starter homes implies affordable small homes for people starting out on the housing ladder. Not a mix of housing including four or three bed houses at 20% below market value due to being built on brown field sites made fit to build on by a government scheme. A more appropriate name would be 20% below market value homes on land cleared and decontaminated by the government. However that sounds less appealing.
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Old 04-01-2017, 14:31
jmclaugh
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According to the land registry the current average house price for the uk is £217 000.
This is of course the average price of a home (not a starter home for wealthy people).
That £217,000 covers the whole spectrum of both the type of house and the geographical area it is in. The average prices are; England £233,000, Wales £147,000, Scotland £143,000 and Northern Ireland £124,000. The highest average house prices are in London at £474,000 and the South East at £313,000, the lowest average price in England is the North East at £125,000.

The question remains as to what is a 'starter home' and the market price of it will vary widely depending on the location.
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Old 04-01-2017, 14:47
DW2
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A more appropriate name would be 20% below market value homes on decontaminated land. However that sounds less appealing.
If the government started using honest slogans then more people would realise that the emperor has no clothes

If the government decontaminate some land because doing so isn't profitable then fair enough. What I don't get is why somebody on an above average income should get a 20% discount if they buy one of these new houses whereas somebody who wants to buy a cheaper terrace house and do it up in order to get onto the housing ladder is less worthy of that help.
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Old 04-01-2017, 14:54
Mark_Jones9
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That £217,000 covers the whole spectrum of both the type of house and the geographical area it is in. The average prices are; England £233,000, Wales £147,000, Scotland £143,000 and Northern Ireland £124,000. The highest average house prices are in London at £474,000 and the South East at £313,000, the lowest average price in England is the North East at £125,000.

The question remains as to what is a 'starter home' and the market price of it will vary widely depending on the location.
“starter home” means a building or part of a building that—
(a) is a new dwelling,
(b) is available for purchase by qualifying first-time buyers only,
(c) is to be sold at a discount of at least 20% of the market value,
(d) is to be sold for less than the price cap, and
(e) is subject to any restrictions on sale or letting specified in regulations made by the Secretary of State

(2) “New dwelling” means a building or part of a building that—(a) has been constructed for use as a single dwelling and has not previously been occupied, or
(b) has been adapted for use as a single dwelling and has not been occupied since its adaptation.

(3) “Qualifying first-time buyer” means an individual who—
(a) is a first-time buyer,
(b) is at least 23 years old but has not yet reached the age of 40, and
(c) meets any other criteria specified in regulations made by the Secretary of State (for example, relating to nationality).

(4) “First-time buyer” has the meaning given by section 57AA(2) of the Finance
Act 2003.

(5) “Purchase”: the reference to a building or part of a building being available for
purchase is to a freehold or a leasehold interest in the building or part being
available for purchase.

(6) The “price cap” is set out in the table
Greater London £450,000
Outside Greater London £250,000

(7) The Secretary of State may by regulations—
(a) amend the definition of “first-time buyer”;
(b) disapply the age requirement in subsection (3)(b) in relation to specified categories of people;
(c) specify circumstances in which a dwelling may still be a starter home even if it is available for purchase by joint purchasers not all of whom meet the age requirement.

(8) The Secretary of State may by regulations amend the price cap; and the regulations may provide for different price caps to apply—
(a) for starter homes in different areas in Greater London;
(b) for starter homes in different areas outside Greater London.

(9) Before making regulations under subsection (8) the Secretary of State must consult—
(a) each local planning authority in England,
(b) the Mayor of London, and
(c) any other person the Secretary of State thinks appropriate.
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Old 04-01-2017, 15:16
DW2
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“starter home” means a building or part of a building that—
That's the government's definition of what counts as a starter home - which is completely different to what everyone else on this thread understands the phrase 'starter home' to mean. An estate agent wouldn't describe a large five bedroom house as an ideal starter home simply because it was a new build under £250k!

Therefore, either the government are out of touch in their definition or deliberately using a different one to everyone else inorder to mislead.
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Old 04-01-2017, 15:36
Mark_Jones9
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That's the government's definition of what counts as a starter home - which is completely different to what everyone else on this thread understands the phrase 'starter home' to mean. An estate agent wouldn't describe a large five bedroom house as an ideal starter home simply because it was a new build under £250k!

Therefore, either the government are out of touch in their definition or deliberately using a different one to everyone else inorder to mislead.
I agree starter homes implies small low cost housing for people starting out on the housing ladder.

I think in part it may have been caused by a change from original policy idea starter homes to final policy local authorities wanted to be able to have a mix of homes built on the brown field sites, while not changing the title of the policy.
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Old 04-01-2017, 15:40
jmclaugh
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“starter home” means a building or part of a building that—
As Scottie might have said "it's a starter home Jim, but not as we know it".
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Old 04-01-2017, 15:51
ShaunIOW
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The argument is if it increases house building. Housing supply. We have a housing shortage.
What we have is a shortage of affordable housing that people can afford to live in without government help - my definition of affordable housing is something that some one on minimum wage up to average wage can afford to buy or rent without government subsidises or housing benefits. Government owned brownfield sites should be used to build cheaper housing that local authorities can rent at affordable amounts, and not have to sell under right-to-buy, allowing those that live in them to save up for something more expensive if their circumstances change or want to. These subsidised rental properties would also have the affect of bringing down average rental prices in the private buy-to-let sector as they'll have competition, and will then hopefully bring down overall house prices and the housikng benefits bill.
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Old 04-01-2017, 15:54
DW2
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I think in part it may have been caused by a change from original policy idea.
In other words, what we're getting is very different to the government's manifesto commitment of building 200,000 starter homes by 2020. The fact that the policy's name hasn't been updated to make it clear to everyone that this manifesto commitment has been broken could be down to an admin error...I guess
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Old 04-01-2017, 16:10
jmclaugh
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I agree starter homes implies small low cost housing for people starting out on the housing ladder.

I think in part it may have been caused by a change from original policy idea starter homes to final policy local authorities wanted to be able to have a mix of homes built on the brown field sites, while not changing the title of the policy.
If so not changing the title would seem to be somewhat disingenuous.

Btw is 'brown field site' mentioned elsewhere as it isn't in the stuff you posted on what a 'starter home' is? If not there is nothing that mandates these to be built on bown field sites.
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Old 04-01-2017, 16:39
blueisthecolour
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The whole concept of 'affordable housing' is a con - it's like saying that you're going to create 'affordable gold'.

We all talk about housing as though it's this really complicated market where government needs to intervene on a daily basis in order to help more properties be built. Actually it isn't that complicated - they simply need to relax the rules that say where people can build. No need for government subsidies or complicated first time buyer shared ownership schemes - just letting people build is the only long term solution.
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Old 04-01-2017, 16:46
moox
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The whole concept of 'affordable housing' is a con - it's like saying that you're going to create 'affordable gold'.

We all talk about housing as though it's this really complicated market where government needs to intervene on a daily basis in order to help more properties be built. Actually it isn't that complicated - they simply need to relax the rules that say where people can build. No need for government subsidies or complicated first time buyer shared ownership schemes - just letting people build is the only long term solution.
I'd agree, but you still need to have some controls. Developers still shouldn't be able to build anywhere they like without contributing to infrastructure, especially when it can't take the load they want to place upon it.

The developers have no problem getting planning permission today. They just don't want to use the land they've already got.
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Old 04-01-2017, 16:50
Mark_Jones9
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If so not changing the title would seem to be somewhat disingenuous.

Btw is 'brown field site' mentioned elsewhere as it isn't in the stuff you posted on what a 'starter home' is? If not there is nothing that mandates these to be built on bown field sites.
The £1.2 billion Starter Homes unlocking the land fund is the scheme the OP quote and link is referring to. That land fund is for local authorities to acquire brown field sites, demolish existing buildings and decontaminate the land, the land is then sold to developers with the money going back into the fund. The developers buying the land have to build "starter homes" on it. The aim of that £1.2 billion is to enable 30,000 "starter homes" to be built towards the government's 200,000 target.
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Old 04-01-2017, 16:55
blueisthecolour
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I'd agree, but you still need to have some controls. Developers still shouldn't be able to build anywhere they like without contributing to infrastructure, especially when it can't take the load they want to place upon it.

The developers have no problem getting planning permission today. They just don't want to use the land they've already got.
Obviously there needs to be some degree of planning and arrangements for contributions towards infrastructure - though it's in the developers own interest to arrange this without government intervention as no one is going to live in houses that aren't connect to transport/electricity/water etc. The market will route out developers that don't plan properly.

Basic economics tells us that if there is an excess of demand over supply and large profits are being made (which they are in the housing sector) then new suppliers should be moving into the market. It costs less than £100k to build a house so if the average price is £233k why are there not loads of companies moving into the market? It's because there isn't a supply of land available due to the fact that government prohibits building on all but a very small percentage of land in the UK. The meager amounts of land that are available are already owned by a cartel of developers who deliberately release housing at a slow rate to maintain house prices because they know that there is no potential competition.
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