Some good news for first time buyers as Government launches Starter Home scheme
30 January 2015
David Cameron has announced a new initiative which over the next 5 years aims to offer 100,000 new ‘Starter Homes’ to first-time buyers under 40 with a 20% discount.
On 15 December 2014, an 8 week consultation period opened on the government’s plans to launch a scheme which aims to help young first-time buyers onto the property ladder. In the hope of opening a range of potential sites across England, developers and local authorities in particular, are being asked to respond to the government’s proposals, which include:
introducing a new national planning policy to encourage new homes to be built on brownfield sites
utilising planning obligations or conditions to ensure that the homes built under the scheme are only available for young first-time buyers and are sold with at least a 20% discount below the market value
removing the obligations on developers to fund s106 affordable housing contributions or to pay Community Infrastructure Levy on such starter homes to enable the homes to be delivered at the discounted price, and
creating a register of first-time buyers’ interest in starter homes to establish and encourage demand.
The government is also keen to stress that, whilst the new homes will have a lower price, the quality will not be compromised. A panel will be set up with architects including Sir Terry Farrell and Sir Quinlan Terry to help achieve high standards of quality.
The nature of the proposals means that the government will need the support of developers, local authorities and land owners for the scheme to work. Several local authorities have already pledged their support to the proposals, along with many major housebuilders.
The aim is for new starter homes to be built on dormant and previously unviable sites, particularly on brownfield locations.
Critics say the plans to build 100,000 homes in England over the next 5 years for people under 40 will not get to the root of the housing shortage and that a long term plan is needed which doesn’t just focus on young first-time buyers.
However these proposals will be good news to the thousands of young people who are either living with their parents or are renting as they cannot afford to buy their first-home.
Building discounted homes for first-time buyers may not solve the housing shortage but removing s106 affordable housing contributions and the Community Infrastructure Levy payable on these properties should help housebuilders to deliver more affordable homes to first-time buyers looking to get onto the property ladder.