Arthur takes a brief look at the long-awaited starter homes scheme, confirmed by Housing Minister, Gavin Barwell, on the 3rd January 2017.
The government has just given the green light for the construction of thousands of new starter homes across the country. Through this new scheme, first time buyers between the ages of 23 and 40 will be eligible for a discount of up to 20pc below market value, helping more young people into home ownership.
Gavin Barwell states “One in three councils has expressed an interest to work with us so far. These new developments will also support the wider growth and regeneration of local areas, including some town centre cites”
Under the £1.2 billion Starter Homes Land Fund, which supports the development of starter homes across England, 30 local authority partnerships have been set up to spearhead the scheme. The councils already receiving investment thus far are: Bristol, Minehead, Cinderford, Stockport, Bury, Plymouth, Trafford, Isle of Wight, South Ribble and Swindon. Each of the 30 local partners will work very closely with the government’s Homes and Communities Agency to identify further land opportunities for the fund.
Homes of up to £250,000 will qualify for the discount outside the capital, which would mean first time buyers could save up to £50,000. In the capital, first time buyers should be eligible for the 20pc reduction on costs of homes up to £450,000.
However, as pointed out by ThisIsMoney.co.uk, there is still very little detail as to whether this 20pc discount will have to be repaid in full by the buyers if the starter home is sold within a 5 year period of its purchase. Furthermore, the government are yet to provide information on how the discount will be calculated, and who will be responsible for valuing the property. Sceptics are unsure about whether these starter homes will reflect the true property value in the area without similar or comparable properties nearby the build sites.
Despite the fact that there are still a lot of unanswered questions, the scheme appears to be a step in the right direction. It may not be able to solve the housing crisis outright, but depending on the speed at which these starter homes can be built (and sold), it could certainly contribute to alleviating the nation’s under-supply of affordable homes. Arthur will keep an eye on any further developments of the scheme over the coming months.