David Cameron defends 'starter homes' that only the richest can afford

The PM insisted that the homes would in fact be cheaper

Jon Stone
Wednesday 14 October 2015 13:10
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David Cameron said he wanted the houses to be cheaper
David Cameron said he wanted the houses to be cheaper

David Cameron has defended his housing policy after an analysis found that his so-called “starter homes” would only be affordable by Britain’s very highest earners.

An analysis published by the charity Shelter found that homes build under the scheme in London would only be available to the richest four per cent – those on salaries of over £76,957.

Labour leader Jeremy Corbyn said he had received 3,500 emails in the last week asking him to grill the Prime Minister on the unaffordability of housing, especially in the capital.

“Does he really believe that £450,000 is actually an affordable price for a new home for someone on an average income to try and aspire to?” he asked the Prime Minister at Prime Minister’s Questions.

David Cameron replied by arguing that the homes would actually be cheaper than what he called the “upper limit” of house prices in the policy.

“The honourable gentleman quotes the figure of £450,000 because what we’re saying is that should be the upper limit for starter homes in London,” he said.

“We want to see starter homes in London built for £150,000, at £200,000 so people … can stop renting and start buying.”

The average house price in London is £522,000, according to the latest figures released by the Office for National Statistics.

David Cameron’s starter homes are normal homes, with a 20 per cent discount applied to them. The 20 per cent discount on an average priced home in London would mean it cost £417,600.

It appears unlikely that many homes in the capital would be available at £150,000, even with a 20 per cent discount.

Mr Corbyn, who was speaking at this second Prime Minister Questions, told Mr Cameron his answer detached from what was happening on the ground to tenants.

PM on Housing Bill

“Could I bring the Prime Minister back to reality?” he asked.

“The last five years have seen a low level of housebuilding, less than half the new buildings that are actually needed, it’s seen rapidly risings rents, higher homelessness, therefore a higher benefit bill.”

Figures released in August found that rents across Britain have increased by 11.8 per cent over the last year – an average of £977, according to the HomeLet rental index.

According to Government statistics, homelessness has risen by 55 per cent while David Cameron has been prime minister.

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