The majority of families in England will still not be able to afford to buy their first house under the government's starter homes scheme, according to the Local Government Association (LGA).
The scheme will see 200,000 homes built over the next five years, which will be sold at a minimum discounted price of 20% to first-time buyers. The discounted prices will be capped at £250,000, and £450,000 in London.
The LGA said the starter homes scheme could help some people onto the housing ladder but that crucial details are yet to be confirmed. It is concerned it will help the fewest numbers of people in areas where the housing affordability crisis is most acute and will be out of reach for many people in need of an affordable home in the majority of local areas.
The analysis found that starter homes will be out of reach for all people in need of affordable housing in 220 council areas (67%) and are out of reach for more than 90% of people in need of affordable housing in a further 80 (25%) council areas. People in need of affordable housing are defined as those who would have to spend 30% of their household income to rent or buy a home.
Although house-builders will be able to build and sell starter homes below the price caps, councils are concerned that this could be difficult for developers to achieve without compromising on quality, particularly in areas with higher house prices.
The LGA is urging Lords to back amendments allowing councils to continue to ensure a mix of affordable homes based on local needs and to ensure that councils have the means to invest in the vital infrastructure home buyers and communities will rely on. Discounts on starter homes should also be applied to them when they are resold to benefit future generations and help them also get on the housing ladder, it said.
Cllr Peter Box, LGA housing spokesperson, said: “The shortage of houses in this country is a top concern for people who are finding that buying their first house is increasingly out of reach. Councils support measures to boost home ownership and starter homes are one of the ways this can be achieved.
"This new analysis shows that starter homes will be out of reach for the majority of people that are in need of an affordable home. Not everybody is ready to buy, and it is crucial that councils are still able to ensure there is a mix of homes that are affordable for those people that need them.
"In some places, such as the North-East and Midlands, the scheme will give people better chance to get on the housing ladder. However, a national scheme will not work for every area and fewer people will benefit from Starter Homes in areas where the housing crisis is most acute."