Housing is firmly on the political agenda following May’s election, with the Government strongly recognising the need to up the ante by building more Starter Homes and helping more first timers get on the property ladder
If you’re looking to buy your first home, the range of schemes available to help you is larger than ever. In short, it’s a great time to consider becoming a homeowner.
While you’ve probably heard about Help to Buy, you may not know about the latest programme being launched: the Starter Homes scheme. Here’s what you need to know…
Who is eligible and which houses can you buy?
The new initiative was originally launched last December, but has recently been ramped up – the Government have announced they will double the scheme to 200,000 homes, to reflect its popularity.
As the name suggests, you have to be a first time buyer to purchase a Starter Home, and the key point is that the scheme allows you to buy a newbuild property with a 20% discount on its market value. With the average price paid for a first home at over £150,000, according to research from Your Move and Reeds Rains, you could receive a discount of around £30,000 – a sizeable sum.
However, there are some conditions. The programme is designed to help young people, so you must be under the age of 40 in order to buy.
Secondly, these properties are designed for first time buyers, so must have a market value of less than £250,000. The exception to this is in London, where the maximum price for a Starter Home will be £450,000.
To make sure these homes still meet a high standard, the Government have appointed an advisory panel, made up of some of the country’s leading architects, meaning eligible builds will be excellent quality and great value to boot.
In total, 16 of the country’s biggest housebuilders have pledged support for the scheme, including Barratt, Avant and Taylor Wimpey. Between them, they’ve built around 60,000 homes in the last year. The properties will be built on brownfield sites all over England, with some of the largest councils also backing the scheme.
How does this scheme tie-in with other support available?
You will have to wait a while before you can buy a Starter Home, so there’s enough time to open one of the new Help to Buy: ISAs, too. These accounts – also funded by the Government – give you an extra 25% cash top-up on your savings, which you receive when purchasing your first property.
If you don’t want to have to wait for a Starter Home, there are also two other Help to Buy programmes to help you get a foot on the ladder. The Mortgage Guarantee scheme allows you to buy homes with a deposit as small as 5% of the total value. There is also an Equity Loan scheme, where the Government will lend you up to 20% of the value of any newbuild home, worth up to £600,000, helping you access better rates.
While these might not be as attractive as the Starter Homes scheme, they are available now and there are no limits on how many first time buyers can use them.
How can first time buyers purchase a Starter Home?
Starter Homes will be advertised like normal properties, as soon as they are finished. By registering interest at starter-home.co.uk, you’ll be alerted when the homes become available in your area. Until planning permission has been given and building has begun, there won’t be an estimate on when you can buy.
If you’re interested, you should consider signing-up soon, as there is already a lot of demand for these homes. When the scheme was launched, over 50,000 potential buyers registered interest within the first month, so get in quickly to take advantage of the scheme.