David Cameron’s pledge to turn "Generation Rent" into "Generation Buy" has prompted outrage from housing campaigners who say his plan will do nothing to help struggling renters.
The Prime Minister's controversial scheme will redefine the concept of an 'affordable home' to include homes for sale at a reduced price, as well as homes with reduced rents.
The move means developers are no longer required to include low-cost rented housing in construction plans, but can instead fulfill their 'affordable homes' requirement with 'starter homes' which must be sold at 20% below market rate.
In his leader’s speech to the Tory conference, the Prime Minister is set to unveil proposals to help him hit his manifesto pledge to build 200,000 more low-cost homes for first-time buyers by 2020.
But housing charities and groups have blasted the plans, saying that so-called starter homes are often only affordable for high-earners, meaning the policy does nothing for people on low incomes.
The new housing policy has not gone down well with housing charities and organisations
Homes for sale homes under Cameron's new scheme could be priced at up to £450,000 in London and £250,000 outside London.
The plans will also "undermine" requirements on developers to build cheap homes for rent, which they argue are desperately needed, critics say.
Developers building new housing are required by law to include some 'affordable' housing in new developments.
The term “affordable housing” is currently used to describe homes for rent at 80% of the market rate.
Under the new policy, the definition will be changed to include 'starter homes' – offered for sale to people under 40 at a discount of up to 20% off the normal price.
Campbell Robb, chief executive of housing charity Shelter, said: “You don't solve an affordability crisis by getting rid of the few affordable homes we're building, yet that's exactly what this policy will do.”
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Robb continued: “Today's announcement confirms our fears that starter homes costing up to £450,000 will be built at the expense of the genuinely affordable homes this country desperately needs.
“Our research has shown that these starter homes will too often only be 'affordable' for higher earners, not the millions of people working hard for an average wage who will be left stuck in expensive private renting.
“There's nothing wrong with helping people onto the property ladder, but the government has to invest in genuinely affordable homes to buy and rent for all of those on ordinary incomes who are bearing the brunt of this crisis."
David Cameron claims the policy will turn 'Generation Rent' into 'Generation Buy'
Many people on social media also seemed less than impressed with the prime minister’s new policy…
Campaign group Generation Rent was conerned that the plans did nothing to address the problems faced by millions of renters around the country.
Speaking on BBC Radio 4’s Today programme, Betsy Dillner, Generation Rent’s director, said: “[David Cameron] is once again nibbling away at the edges of the housing crisis. We need to build 200,000 a year and he's been saying that 83% of people would rather buy than rent. But what is he going to do for the rest of the 9 million who are stuck renting?"
"No doubt we need to increase the supply of affordable homes but this policy is undermining the of developers' obligation to provide affordable homes for rent.
"We would like to see more security measures for the private rented sector. Private rents are unaffordable.
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"We're talking about making sure we actually have the supply of low cost homes for everyone's income bracket.
“He's undermining the obligation to provide social housing from the private sector. So where are people on low incomes going to live? We haven't seen an answer to that question yet."
The problem could also be compounded by the loss of council houses when those purchased under the Right To Buy scheme are not replaced. It was revealed in September that only one in 10 homes sold off under the flagship Tory scheme had been replaced with a new council house as promised.