If you're a first-time buyer aged between 23 and 40, the Government's Starter Homes initiative could be right up your street. Find out what we know so far with our Q&A.
Starter Homes is a government initiative that aims to provide up to 200,000 affordable new-build homes to first-time buyers in England by 2020. The properties will be built on brownfield land and sold at a 20% discount compared to the market price in the area. This means, in effect you'll only need to raise a mortgage of 80% on the true sale value of the home – minus whatever deposit is required by the lender.
You must be between 23 and 40 years old and never have owned a home before. It’s not yet clear if you would qualify for the scheme if you were buying jointly with someone outside this age bracket. You will need to show a combined household income of less than £80,000 (rising to £90,000 in London) and to be buying the home with a mortgage (cash buyers will not be eligible).
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.
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.
The first wave of Starter Home building is due to get underway in 2017. Developments will be on brownfield sites in 30 local authority areas across England. You can register your interest in the Starter Homes initiative (and request to receive updates on when the homes will become available in your neighbourhood)
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.
Starter Homes will be built on under-used or unviable commercial or industrial land which is not currently earmarked for housing.
Yes. If starter homes are sold within the first five years of purchase, you will need to repay some or all of the 20% discount available under the scheme.
The initiative does not have a formal end date. However, it could be reversed or changed by this government or the next.