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Hackney mayor rejects First Homes scheme that could cut into social housing

Philip Glanville compared new proposals to give first-time buyers a 30 per cent discount to the abandoned Starter Homes initiative "on steroids"

London, England, United Kingdom - February 11, 2015: FOR SALE and TO LET real estate agent signs outside residential housing development in Hackney. Many house rental and sales agency signs in a row. Multiple sign boards.

Mayor of Hackney Philip Glanville has written to ministers asking them to scrap plans that will use funds otherwise allocated for affordable housing to give first-time buyers a discount on their properties – describing the scheme as “Starter Homes on steroids”.

The government’s proposed First Homes initiative would give people 30 per cent off their first home, subsidised by cash contributions developers are required to make towards affordable housing when they apply for planning permission.

The scheme isn’t radically different from the government’s 2015 Starter Homes proposals designed to create 200,000 new homes from £2.3bn funding.

However the scheme resulted in no new homes built and was ditched last year.

In the letter from Hackney’s Labour council to the Ministry of Housing, Communities and Local Government in response to a consultation on the proposals, Glanville said that the 30 per cent discount would help few Hackney residents – explaining that with low incomes and high housing costs in the area, locals would instead need a discount of around 70 per cent for the scheme to be of any real benefit to them.

Hackney is the ninth most deprived council area in the country, with a housing waiting list of more than 13,000 households and more than 3,000 homeless families stuck in temporary accommodation.

“It feels to me as someone who has been leading Hackney’s response to the housing crisis for nearly a decade a poor attempt to reheat the failed Starter Homes programme,” the mayor said of the First Homes proposals.

Hackney house prices have risen by more than 70 per cent in the past five years.
Pointing out that the initiative would eat into cash that could be spent on genuinely affordable homes – raised from developers through the Section 106 agreement – Glanville said the coronavirus pandemic will make social housing “more important than ever” as many residents “come to terms with job losses and reduced incomes”.
He added: “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 our 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.”

He called on ministers to prioritise social rent homes in particular for Section 106 money, with a reduction in one of the few sources of funding for genuinely affordable housing putting the council’s attempts to meet housing needs under threat.

Last year Stephen Robertson, CEO of our charitable arm The Big Issue Foundation, said broken Starter Homes promises showed a need to move beyond “populist short-termism” to tackle the housing crisis and end homelessness.

“The serious shortage of affordable homes and high rents are proven causes of homelessness,” he said. “The government’s 2015 manifesto commitment to build 200,000 ‘starter homes’ for first-time buyers under the age of 40, if enacted, would have been contributing now to a longer-term reduction in the number of people who do not have a meaningful place to call home. Instead zero of these new ‘starter homes’ have been delivered.

“It is time for politicians to break free from populist short-termism and follow the lead set out in John Bird’s ‘Future Generations Bill’; we need to act today to prevent the problems of tomorrow. And that starts with building the homes that are so desperately needed.”

It was conceded by the National Audit Office that some developers may have built and sold homes that conformed to the starter home specifications, but legally they could not be marketed as such because the legislation required to do so never came into force.

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