Being Duped by Affordable Homes

Don’t be duped by ‘affordable homes’ or it could cost the earth

Take a walk around some of our key towns and villages and I bet you will see more than a few mass-volume new home developments. The news is full of stories of first time buyers (FTBs) finding it difficult to get on to the property ladder due to an historic lack of ‘affordable homes’. So on the face of it, there is a clear need to increase this type of housing.

But look behind the glossy brochures and pristine new builds and you will see a picture that is far from rosy.

I wrote in March about politicians misleading the public about ‘affordable homes’. These properties are meant for people on the lowest of incomes, who genuinely struggle to afford a mortgage. Therefore, if ‘affordable homes’ were intended for this sector of society and not for FTBs generally, why are we seeing so many being built?

Currently, large scale developers are incentivised to build on greenbelt land to reinforce the political line. Not only are they quicker and easier to build, but there is no VAT payable by them, a sizeable saving. These developers expect to take home around a 25% profit on every home they build. This calculated strategy bolsters their share price, satisfies their shareholders and ensures the business continues to grow. But at whose expense?

National news stories have highlighted what is known as the Leasehold Scandal (#fleecehold on Twitter), where the freeholds on these poor quality homes are quickly sold on to investors who are more interested in making money, than making amends when developers have cut corners. We hear horror stories about shoddily-built homes without proper insulation, leaking new roofs, or ground rents being hiked once the freehold is sold on.

As I am out and about on business all over Yorkshire, I see many empty commercial units and dilapidated properties. What if the Government created an incentive to convert these into homes, rather than to build on our precious open spaces? After all, we are only an island – once the land is gone, it’s gone. I also see numerous four and five-bedroomed houses being built, but these are not what we need. We need genuinely affordable homes for FTBs and more appropriate properties for those looking to retire and downsize.

The Government tells us it is helping FTBs by increasing SDLT (stamp duty) in the upper price brackets to fund ‘affordable homes’ projects. Actually it has made the situation worse and have created a more competitive market in the low to mid value sector. By forcing purchasers to reconsider buying in the upper price brackets, they are now lowering their budgets and starting to compete with FTBs and second movers, therefore pushing prices up.

New-build homes by their nature are difficult to add value to, as the developer will have mostly maxed out the planning potential. Therefore owners are relying on market appreciation to increase their property’s value. However if the Government is trying to flood the market and bring prices down, it will create a greater two tier property market. So what is then going to happen in the long term?

Overall we have got our property policies wrong, which isn’t assisted by our fourth housing minister in the last 18 months. While I do not profess to have the answer, building the wrong types of property on our ever-decreasing open spaces in order to satisfy short term political PR, is not the way to go. The underlying problem in all of this, is that property prices have outstripped salary increases for the last 20 years. Combine that with more stringent mortgage lending criteria and various botched Government policies to patch problems, it means that overall we have a bit of a mess. It is clear we must do more to help FTBs, however the issues at stake reach far beyond this.

Alex Goldstein is an independent bespoke property consultant in Yorkshire and London (www.alexgoldstein.co.uk) 01423 788377

EAN Content

Content shared by this account is either news shared free by third parties or sponsored (paid for) content from third parties. Please be advised that links to third party websites are not endorsed by Estate Agent Networking - Please do your own research before committing to any third party business promoted on our website. As an Amazon Associate, I earn from qualifying purchases.

You May Also Enjoy

Damaged timber from Dry Rot
Estate Agent Talk

Mould and damp – what you need to know ahead of winter

With the winter months just round the corner, problems with damp and mould can become far more prominent. Autumntime is when many people turn on central heating systems and choose to close windows, preventing fresh air ventilation needed to allow damp air to leave a property. Unfortunately, the combination of warm and damp air can…
Read More
Breaking News

Rental price and average salary tracker – September 2025

London and South East see biggest dips in required rental salary year-on-year London and the South East saw the sharpest dips year-on-year in the average salary needed in order to rent the average home in that area. London saw a 4.2% drop, whilst the South East saw a decline of 2.9%. Yorkshire and Humberside saw…
Read More
buying at auction uk
Breaking News

The cities where buying beats renting – with just a 5% deposit

British first-time buyer mortgage payments are typically 17% cheaper than renting, even with a low 5% deposit The average 5% deposit is £11,412 based on a typical first-time buyer property price of £228,233 Among major cities outside London, the biggest gap between owning and renting is in Glasgow, where buyers could save more than £4,750…
Read More
Rightmove logo
Breaking News

Rightmove’s Weekly Mortgage Rates Tracker

Average rates for 2-year and 5-year fixed-rate mortgages   Term Average rate Weekly change Yearly change 2-year fixed 4.51% +0.00% -0.37% 5-year fixed 4.55% +0.01% +0.01%   Lowest rates for 2-year and 5-year fixed-rate mortgages   Term Lowest rate Weekly change Yearly change 2-year fixed 3.77% +0.05% -0.07% 5-year fixed 3.97% +0.10% +0.29%   Average…
Read More
Rightmove logo
Breaking News

Data and commentary from Rightmove on stamp duty reforms

Colleen Babcock, Rightmove’s property expert said: “We’ve been calling for stamp duty reform for some time now, as it’s a significant barrier for many people moving home. Abolishing it completely would remove one of the biggest barriers to moving, unlocking more moves at all stages of the property ladder. “Our data shows that only 5%…
Read More
Breaking News

Second-time buyers dominate demand for longer term fixed mortgage deals

Second-time buyers are dominating demand for longer term fixed mortgage deals, fresh data from Moneyfacts Analyser can reveal. Of those looking for fixed term deals on moneyfactscompare.co.uk: Almost two-thirds (58%) of second-time buyers who compared mortgage deals using the moneyfactscompare.co.uk website were considering terms of three years or longer in the 30 days to 1…
Read More