The new Starter Homes scheme – what is it and how will it help?
On 28 February, the government announced it was launching registrations for people interested in signing up to its proposed Starter Homes scheme, which is planning to build 100,000 discounted new homes for young first-time buyers.
The move comes as many of the major political parties are setting out their aspirations for addressing the chronic shortage of homes in the UK, which has led to many younger people in particular being excluded from buying their own home due to price rises and unaffordable deposits.
The government’s plan is to sign up housebuilders to build 100,000 low-cost new homes over the next few years, exclusively for first-time buyers. These will be sold at heavily discounted prices, up to 20% less than usual market value, making the first step on the ladder much more affordable, both in terms of the deposit needed and ongoing mortgage commitments.
The government is removing substantial charges payable by housebuilders, and their requirement to build ‘affordable homes’, on selected sites, on the condition that this benefit is passed on to the buyer. These planning changes come into force on 2 March 2015. The discount remains on the home for five years – so any first-time buyer selling on their discounted home within that time will have to pass on the discount to the next buyer.
The www.starter-home.co.uk website is now set up for young people (under 40-years-old) to register their interest in buying one of the new homes.
The government has appointed a ‘design panel’, which includes world class architects Sir Terry Farrell and Sir Quinlan Terry, which will assess developers’ plans for making qualifying starter homes and ensure that the new homes are built to good standards in terms of architecture, layout and specification.
Communities secretary Eric Pickles said of the scheme: “Housebuilding and helping first-time buyers are key parts of our long-term economic plan – we’re clear that anyone who works hard and wants to get on the property ladder should get the help they need to do so.
“The number of first-time buyers is already at a seven-year high and these Starter Homes, available at a 20% discount, will help even more people realise their dream of home ownership. This will also form part of our wider efforts to get the country building again, which have already led to 700,000 new homes being delivered since the end of 2009.”
More than 30 housebuilders have said that they support the plans and would consider bringing forward land to develop the new, discounted houses from this year.
Find out more about who is involved with the scheme here.