In an article online at The Guardian:
Mortgage lenders have warned that the government’s target of delivering 200,000 discounted first-time buyer homes by the end of this parliament is “too ambitious” and that the scheme could contribute to making the property market more unstable.
Under the starter homes initiative, the government plans to relax planning restrictions to encourage developers in England to build properties that will be sold at a 20% discount on their market rate to first-time buyers under the age of 40. In March 2015, it said it wanted to deliver 200,000 of these new homes by 2020, alongside 135,000 shared ownership properties.
The scheme has been controversial because it allows developers to replace homes built for affordable renting with homes costing up to £250,000 outside London and £450,000 in the capital, and for buyers to sell them on later at the open market rate.
In its response to the government’s technical consultation to the scheme, the Council of Mortgage Lenders (CML) said that if targets for starter homes and shared ownership properties were to be met, they would amount to 112,000 homes a year being built over the next three years – more than three-quarters of the total number of properties it was expecting to be delivered.
“We believe that it is highly unlikely that such a target could be achieved,” the CML said.