Under the new plans, aimed at changing “Generation Rent to Generation Buy” according to Cameron, builders will no longer be forced to offer ‘affordable’ rented homes in new developments. Instead they will be able to offer starter homes for first-time buyers under 40.
It is anticipated that 200,000 new homes will be provided by 2020. The price of the starter homes will be capped at £250,000 and £450,000 in London, described by Brandon Lewis MP as a 20% discount.
"When a generation of hard-working men and women in their 20s and 30s are waking up each morning in their childhood bedrooms - that should be a wake-up call for us," Cameron said.
"For years politicians have talked about building 'affordable homes' - but the phrase was deceptive. It basically means homes that were only available to rent. What people want are homes that they can actually own."
Commenting on the Prime Minister’s announcement, Charles Haresnape, group managing director, mortgages, at Aldermore Bank, said: “The lack of housing supply is the biggest challenge facing the housing market today.
“Until 1990, the number of homes built every year was over 200,000, but the total has only exceeded that level in four years since, during the period between 2004 and 2007.
“The announcement of a new relaxation of strict planning regulations to encourage housebuilders to develop affordable homes is a positive development for both first-time buyers who are struggling to get on the ladder as well as to the housing market as a whole.
“There is still more that needs to be done to ensure that the housing market functions as well as possible for all involved, and initiatives such as this or proposals to free up brownfield sites are a welcome rebalancing towards more supply side measures, essential for a fully joined up housing policy.”
Mark Hayward, managing director, National Association of Estate Agents, agrees the move is not enough: “Today’s announcement from David Cameron on his plans to build 200,000 new homes is good news, but it simply isn’t enough bricks and mortar to lift us out of the crisis we currently find ourselves in. And as always, with the word ‘affordable’ who actually defines what affordable housing is?
“We first heard this pledge in Cameron’s pre-election campaign, and we still support the sentiment. However, other initiatives such as the Help to Buy scheme still remains in place and it boils down to the fact that we are still waiting to see new homes being built; and whilst we wait capacity remains stretched, infrastructure is not in place and house prices continue to grow.
“Our latest housing report found that sales made to first-time buyers fell to the lowest level since July 2014. One in five sales (20%) were made to first-time buyerss in August, compared to 23% in July and 24% in June, indicating movement in the market is getting tougher and tougher.
"First-time buyers have been squeezed out the market for some time; it’s taking young buyers longer to get their foot on the first step of the ladder, which in turn increases pressure on the rental market.”