For all its peaks, troughs and subsequent resignations, the Budget 2016 saw a new phase of one of the Chancellor’s personal campaigns: planting a blue flag in the hearts of young professionals.
With the increased personal allowance, Help to Buy ISAs, Lifetime ISAs and a fresh consultation paper on Starter Homes, Osborne’s appeal to me and my peers is that he can reignite our ebbing aspirations of homeownership.
But I’m afraid that in London, ‘millennials’ are finding more solace in their craft pale ales and chia-seed lattes than in the Chancellor’s policies.
Notwithstanding the incentives and bonuses, saving for a deposit while renting a home in London brings to mind the old adage of pushing water up a hill with a rake. In the current London market, it’s more like doing so handcuffed during a monsoon.
The Starter Homes scheme offers a 20 per cent discount on newly built homes, up to a maximum value of £250,000 outside Greater London and £450,000 in the capital.
However, in London in particular, first-time buyers will still require an eye-watering deposit and very substantial salary. According to the Halifax, first-time home buyers needed an average deposit of £91,409 to buy a house in the capital last year – nearly three times the national average.
So who benefits from these 20 per cent discounted homes? Ultimately, in London it’s those already in a strong financial position: high earners with a chunky deposit. The Starter Homes scheme uses Government backing to lower the ceiling on home ownership for those who can’t quite afford it, and give a hefty discount to those who already can.
Then there’s the question of how these Starter Homes are delivered. In its latest consultation paper, the Government is considering a requirement for 20 per cent of all new homes to be Starter Homes in developments of more than 10 units. This is as a direct replacement for traditional affordable housing requirements, including social rented and shared ownership properties.
So while Starter Homes will disappoint me and my flat-white-quaffing millennial chums, they could be actively damaging for those who are in desperate need of affordable accommodation.
I’d like to hear a more holistic message from the Government on housing – how it will support housing needs across the spectrum rather than for a narrow group only. In its housing policy as in its spending deficit reduction programme, the Government needs to consider – as Iain Duncan Smith wrote in his post-Budget resignation letter – whether “enough has been done to ensure we are all in this together.”
Alexander Hall is a Senior Account Manager at Camargue