The government confirmed plans yesterday to provide funding for its new ‘Starter Homes’ scheme. Around 30 local authorities across the country will be offering 20% discounts on new homes to first time buyers. The new Starter Homes scheme will see property developers building an estimated 200,000 new homes for first time buyers, and the government will be discounting the prices by 20%, making new homes much cheaper for young families and couples.
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Where will these Starter Homes be built?
The 30 local authorities included in the scheme range from Liverpool, Luton and Lincolnshire, to West Somerset and Worthing plus many in between. The areas have been carefully chosen for their already affordable housing and lower cost of living, but there will be many Starter Homes built in London too for those who wish to live and work in the capital, and have not been able to before due to the high costs. There are some catches, however. Under the Starter Home scheme, buyers will not be able to sell their new property for at least five years, after which they will be sold at full market price again, without the 20% discount, so only the first buyer will be able to benefit from this deal.
How much could you save?
The discount is available on homes costing up to £250,000, and £450,000 in London, meaning first time buyers could see themselves saving up to £50,000 on a home, and up to £90,000 on a property in the capital. This is great news for first time buyers who have previously been priced out of the British housing market. Former Chancellor, George Osborne, created the scheme in 2014 as a way for 23 to 40 year olds to get onto the housing ladder, where they haven’t been able to before. It comes after news that the government’s Help to Buy scheme is potentially on its way out, though this is not confirmed yet.
When will they be available?
These new Starter Homes will start being built across Britain soon and the government hopes for them to be available to buy sometime in 2018. During the beginning of the 2007 financial crisis, 177,650 new homes had been built, but this number dropped significantly to 106,720 in 2010, meaning many young adults have been left having to rent while they try to save for a mortgage. Mortgages have become more affordable now too with the recent decrease in interest rates by the Bank of England, first time buyers look to be in luck. However, it waits to be seen if the Starter Homes scheme will be able to deliver what it claims. If you’d like to discuss buying a property with us, or if you are a first-time buyer who is weighing up their options, please don’t hesitate to call us on 0800 038 6699. We provide conveyancing for many first-time buyers and have extensive experience in securing property for young families and couples. Click here for a free instant quote.