Build homes that actually help first-time buyers

In 2014 we called on the government to build new homes that would be sold at below the market price - we called this a Bubble-Free Housing Market. They liked our idea and duly announced Starter Homes - sold to first-time buyers at a 20% discount.

But they missed the point, and their policy has one disastrous flaw.

We're all in favour of homes that people can afford to buy, but the whole point of our proposal was that the lower price would stay low.

The same is true for Starter Homes, but only for the first five years. After five years are up the lucky owner can sell the home for the full market price. That means free, subsidised money for 200,000 people, absolutely nothing for the other 2 million private renters who want to buy, and one technically "affordable" home lost into the overpriced open market.

The government's policy could actually be a decent one if the discount was permanent. A renter who could potentially afford a discounted house in 5 years' time will reach 2020 and find that all Starter Homes have been sold and there are no more discounts. With our proposal, they would be available as original buyers started selling up.

This is already being done in the free market by Pocket Homes, and the government's absurd giveaway is even being questioned by mortgage lenders and house builders.

The Housing Bill is going through the Lords which offers a great opportunity to fix this mess. Please write to the main parties and ask them to amend the Bill. Please feel free to amend our text and include your own experiences of the housing crisis.

UPDATE: Labour and the Lib Dems have confirmed their support for this, so we have removed their spokespeople from the email.

UPDATE: The Lords debated the discount at the Committee Stage on Thursday 3 March and revealed a huge appetite from across the House for changing this policy. Generation Rent and our research on this was mentioned by Lib Dem Lord Shipley. The issue will be decided at Report Stage. The email below has been disabled for the moment, so if you try and send it, it won't go through. Thank you for your support.

Lord Laming, Crossbench Convenor

Baroness Jones, Green

Baroness Williams, Conservative

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As the Lords debate the Housing Bill this week, I would like to ask you to amend the Starter Homes scheme, which is currently a waste of taxpayers' money that will help only a tiny number of better-off private renters.  As it is the government's flagship policy, enshrined in the Conservative manifesto, I understand that the Lords is committed to passing it, but my concern, as someone who is affected by the housing crisis, is with the 20% discount on the house price lasting only for 5 years. As soon as the 5 years are up, the lucky owner can sell it for the full market price, and another "affordable" home is lost forever. Only 200,000 will be built, less than a tenth needed by the 2.3m private renters who the English Housing Survey estimates aspire to buy. The time limit was not mentioned in the manifesto - indeed, the manifesto says the Starter Homes will be built "exclusively for first-time buyers" - so it should be possible to keep the discount in place in perpetuity and bring the government closer to making good on its promise.  When questioned on this in the Commons, Ministers said that owners should be able to realise the full value of their home. It sounds like the government wants to help people buy a home, but not enough to let each Starter Home help multiple households into home ownership. Millions of people would jump at the chance of buying a discounted home on condition that the discount was permanent - people want homes, not get-rich-quick schemes. Even when they wanted to trade up they'd be in a much better position than if they were still renting.  Developers are already making permanent discounts work. Even mortgage lenders and large developers are concerned about the distortions this policy will create in the housing market.  I urge you and your colleagues in the Lords to amend the Housing Bill to make Starter Home discounts permanent. I also believe that the homes should not be built to the exclusion of affordable homes to rent, and should also be made available to over-40s, 1.5 million of whom are facing a lifetime of private renting.

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