A government initiative to build affordable homes to buy turns out to be unaffordable for Londoners on low incomes. Are we surprised? Of course we're not.
We're talking about Starter Homes. These are new homes intended for first time buyers, built on land that wouldn't otherwise get planning permission — in other words, they were intended to be 'extra' homes. (There's currently some confusion about whether these homes will be additional, or whether they'll be paid for by raiding budgets for shared ownership or housing associations.) The homes will be sold at a 20% discount on market rates and capped at £450,000 in London. That's still quite pricey, so Shelter has worked out how much people will need to be earning in order to afford one, and where they'd be able to buy.
By 2020, when the new National Living Wage will be £9 an hour, the number of Starter Homes affordable in London to people earning it will be... zero. And that's including couples without kids, not just single people or families. Oh, Starter Homes, with your unaffordable affordability you're really spoiling us.
For Londoners with kids earning average wages, you can forget about nabbing a Starter Home anywhere other than Havering, Bexley or Barking and Dagenham. Couples without children have a few more options.
If you're single you'll need to be in the bracket of highest earners to be able to afford a Starter Home — and even then you'll have to rule out living in Camden, Hackney, Hammersmith and Fulham, Islington, Kensington and Chelsea, Lambeth, Richmond, Southwark, Wandsworth or Westminster.
Labour's housing spokesman on the London Assembly, Tom Copley, said
"Token schemes like this which appear to move pots of money around instead of actually increasing investment in housing, will not help. The government need to take the housing crisis seriously. That means properly funding Housing Associations to build social and shared ownership housing and removing the arbitrary cap on council investment in new homes. £450,000 homes which are unaffordable to the vast majority of the population are not part of the solution."
Even if shared ownership programmes remain unscathed by the Starter Homes scheme, it's not necessarily the answer. A shared ownership flat has gone on the market just off City Road, which you'd need an income of £77k pa to afford. The three bedroom flat is valued at just over £1m and buyers can get a 25% stake, paying rent on the rest. Islington and Shoreditch Housing Association, which is selling the property, suggests that as it's a three bed place, it could be taken by three mates clubbing together. Good luck sorting out who buys out who when someone decides to move on...