George Osborne has missed an “open goal” on solving the housing crisis by handing taxpayers’ money to private developers instead of tackling high rents.
The Chancellor today announced private companies will be able to get public funds to build houses.
The move is part of the Government’s plan to get 400,000 affordable homes built by the end of the decade.
Of those, 200,000 will be so called ‘Starter Homes’, which will available to first-time buyers at a 20 per cent discount compared to market value.
But critics of the plan claim Starter Homes only benefit those are reasonably well-off, with housing charity Shelter claiming that average earning families will be priced out of affordable Starter Homes in 58 per cent of local authorities by 2020.
Betsy Dillner, Director of Generation Rent, accused the Chancellor of “yet another reckless giveaway”.
She said: "After raising £6.9billion to invest in new affordable homes, George Osborne had an open goal, but by deciding to hand the money to private developers instead of bringing down rents for private renters, he has spooned the ball over the crossbar.
"Starter Homes can be bought at a discount then sold off at full market value after five years. This is yet another reckless giveaway, with little to help the millions whose enormous rents are preventing them from enjoying financial security, let alone saving a deposit.
“If the government prioritised investment on permanently affordable homes for people on low incomes, it could take the heat out of the private rented sector and thereby reduce costs for all renters."
Mr Osborne also announced today that a further 135,000 shared ownership homes will be built, with eligibility criteria for those wanting to buy a property relaxed.
Those earning less than £80,000 outside of London, and £90,000 in London, can now apply for the scheme.
Campbell Robb, chief executive of Shelter, said: “The Chancellor can’t ignore the fact that home-ownership schemes like Starter Homes or shared ownership won't work for many, so building more genuinely affordable homes to rent is still absolutely essential.
“Especially when there are plans to force councils to sell off large swathes of their social homes, and in the wake of worrying new cuts for those needing support with their housing costs, including vulnerable single people.”
The Chancellor also announced plans to tackle people buying second homes and properties for renting out, which he claimed lead to a “squeezing out” of families trying to get on the housing ladder.
Stamp duty on second home and buy-to-let purchases will be three per cent higher from April, a measure expected to raise £1billion by 2021.
Some of the fund will be fed into the affordable housing budget.
The National Landlords Association’s Richard Lambert was dismayed by the announcement, and said: “The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent.
“The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes by the party that they put their faith in at the election.
“If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so.”Suggest a correction