A government scheme to provide discounted homes to first-time buyers will threaten delivery of lower priced social housing, industry experts argue.
Housing secretary Robert Jenrick has unveiled plans to save first-time buyers an average of £100,000 on their purchases, with the costs fronted by developers.
The First Homes will be sold at a 30% discount to local people, with priority going to military veterans and key workers.
The government is exploring plans which would require developers to dedicate between 40% and 80% of their section 106 contributions to the homes, in place of other affordable rental tenures.
Jenrick said: “I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. A proportion of new homes will be made available at a 30% market discount rate – turning the dial on the dream of home ownership.”
But others fear that the focus on home ownership comes at the expense of social housing for lower income families.
Kate Henderson, chief executive at the National Housing Federation, said: “We are concerned that this proposal could make it more difficult for housing associations and councils to provide homes for lower income facilities.
“If this proposal goes ahead, we will need to see a significant increase in government funding for genuinely affordable housing – this is the only way we will end homelessness and provide the homes local areas need.”
The Local Government Association echoed these concerns over the effect on affordable housing delivery.
LGA housing spokesperson David Renard added: “Not everybody is ready to buy and we will be making the case in this consultation that local areas will need discretion on the number of First Homes required in new developments.”
Renard said the government should use the forthcoming Budget to reform Right to Buy, allowing councils to keep the full RTB receipts and have the flexibility to set discounts locally.
The First Homes initiative comes as part of the government’s pledge to deliver more than one million new homes over the next five years.
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