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What exactly is the Starter Home Initiative?
The Starter Home Initiative was introduced by the government in December 2014. Its aim is to make 100,000 new build houses more affordable to first time buyers by giving them a 20% reduction on the original purchase price of a new house.
Who is it aimed for?
The Starter Home Initiative scheme is specifically targeted at first-time buyers under forty years of age wanting to buy new houses. With only 100,000 new houses initially being made available, there are other certain criteria that need to be met by potential buyers. For example, a buyer needs to be able to pay a deposit and the mortgage on a new house. The property itself has to have a value of no more than £250,000 with new houses in London having a maximum value of £400,000.
How does it work?
The government has made changes to the planning system which frees certain under-used brownfield sites to be free from levies and planning costs. These levies and planning costs are typically made by housebuilders and developers to local authorities as part of getting planning permission on new housing developments. By relaxing these levies on new house developments, this can save housebuilders around £15,000 per unit they build. These savings are then passed on giving a 20% discount exclusively to first time buyers buying a new house. In order to stop these new houses being bought at a cheaper price and then being sold at the full price immediately afterwards, these new houses are not allowed to be resold for a period of five years. Similarly they are not allowed to be rented out during that time.
Is this initiative really worth going for?
This government Help to Buy scheme means buyers can buy a new house with a significant price reduction in place. Although these new houses are cheaper, they have to meet certain design requirements to ensure they are of good quality. This is overseen by the well-known and world-renowned architects Sir Quinlan Terry and Sir Terry Farrell. It can take time for these specific properties to become available since there are specific planning processes they have to go through. However, in addition to the first 100,000 new houses being built, the government has pledged to build a total of 400,000 additional new houses across the UK by 2020.
What housebuilders taking part in this scheme?
There are many housebuilders taking part on this Starter Home Initiative. Both large and small companies are already signed up to building these new build homes. Here are three of housebuilders we feature on our website: