PAC: MHCLG failing to deliver for first-time buyers

Jake Carter

December 9, 2020

UK houses

The Public Accounts Committee (PAC) argues that the Ministry of Housing, Communities & Local Government (MHCLG) has failed to deliver for first-time buyers.

In a report published by PAC, the committee cited the MHCLG as “stringing expectant young people along for years” and “wasting time and resources” on housing policies that “come to nothing as ministers come and go with alarming frequency”.

According to the PAC, the MHCLG has failed to deliver on all promised housing schemes since 2015.

In 2015, the MHCLG promised to build 200,000 discounted starter homes for FTBs.

While it did set out legislative framework for Starter Homes in 2016, the department never put in place the necessary laws to make the affordable homes initiative a reality.

In 2017, the Starter Home scheme had been abandoned, however it was not until 2020 that the scheme was officially ended.

An estimated 85,000 people signed up for the scheme in 2015.

The MHCLG’s next housing scheme is the First Homes initiative, however, it is unable to detail when it will be available for FTBs to purchase.

The First Homes scheme will not need new legislation, as it will go through on its predecessors system.

In order to fund the discount for the properties registered under the First Homes scheme, developers will be expected to contribute.

As well as this, local authorities will be instructed to ensure 25% of affordable homes built by developers contribute to the initiative.

However, the PAC believe that the reliance on developer contributions to fund First Homes is part of an ‘opaque, complex mechanism’ which risks less money being available to local authorities for housing and infrastructure.

Within the report, the PAC also noted that after a number of abandoned policies and wasted resources, it believes that the MHCLG remains unable or unwilling to clarify how it will achieve its ambition of 300,000 new homes per year by the mid-2020s.

The PAC added that it believes there is an alarming “blurring” of the definition of affordable housing.

The committee outlined that it is essential that the department is clear what ‘affordable’ means to different sectors of society and in different areas of the country.

Furthermore, the PAC believes that the long-term success of MHCLG’s housing policies depends on it working effectively with players across the housing sector, without losing sight of the needs of those who are unlikely to be able to buy or rent a home in the UK property market without support.

Meg Hillier MP, chair of the Public Accounts Committee, said: “The Department for ‘Housing’ is at risk of losing the right to the title.

‘It has serially, constantly failed to deliver affordable new homes or even make a serious attempt to execute its own housing policies or achieve targets before they are ditched, unannounced – costs sunk and outcomes unknown.

“MHCLG needs to ditch instead the false promises and set out clear, staged, funded plans, backed by the necessary laws and with a realistic prospect of delivering.

“It also needs to ditch what is becoming a hallmark lack of transparency, if it is to have any hope of rebuilding confidence among future tenants and owners that the decent, safe, affordable homes they want and need will ever be built.”

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