Starter Homes scheme
If you're a first-time buyer under 40 years old, the Government's Starter Homes initiative could be right up your street. So read our Q&A to find out how it really works.
What is Starter Homes?
Starter Homes is a government initiative that aims to provide 200,000 discounted new-build homes to first-time buyers in England by 2020.
The properties will be built on brownfield land and sold with a 20% discount to market price in the area.
This means in effect, you'll only need a mortgage of 80% on the true sale value of the home – minus the deposit required by the lender.
Am I eligible?
You must be under 40 years old and never have owned a home before.
How is the 20% discount funded?
House builders and developers typically make payments of £15,000 per house to local authorities as part of planning obligations and the money is used to fund affordable housing and local infrastructure in the area.
But these payments have now been waived for house builders that provide Starter Homes. And instead they will be required to pass on the savings to buyers.
How much will a Starter Home cost?
The price of the new properties will be capped to £450,000 in London, and £250,000 outside the capital. The values will be set by independent valuers within your local market.
When will the homes be available?
It's not yet clear when the first Starter Homes will become available as land needs to be identified, and planning permission granted, before the homes are built.
However you can register for Starter Homes now by following this link. You will receive updates on the initiative and will be alerted when homes become available in your neighbourhood.
What will the homes be like?
The new-build homes will be subject to design requirements. The Government has appointed a new Design Advisory Panel, which includes architects Sir Terry Farrell and Sir Quinlan Terry, to develop a set of designs to showcase to buyers and house builders what the Starter Homes could look like.
The designs will cover a variety of homes, from flats to three-bedroom detached family homes.
Where exactly will the homes be?
Starter Homes will be on under-used or unviable commercial or industrial land not currently earmarked for housing.
Are there any restrictions?
Yes. The discounted properties will need to be available at a 20% discount for five years from the date they are built. So if you want to want to sell yours before then, you will have to offer the same discount to the next first-time buyer. You also cannot rent out your Starter Home until five years after you have owned and occupied in it.
How long will Starter Homes be available for?
The initiative does not have a formal end date. However, it could be reversed or changed by this government or the next.