Good news has been announced for first-time buyers, thanks to the government’s Starter Home initiative. Prime Minister David Cameron is announcing the initiative has been fast-tracked so it begins at the start of the New Year. Previously it was slated to begin once the General Election had taken place.
What does the scheme offer?
The scheme is set to provide 100,000 new-build properties for first-time buyers at a discount of 20% on the usual price.
Will all first-time buyers be eligible for the scheme?
No – the criteria states that first-time buyers must be under the age of 40 to qualify.
How will the savings be made?
The plan is a progression of the current Help to Buy scheme that has been in operation now for some months. A number of measures have been proposed that will help to reduce the cost of the properties. For example many of the typical requirements in place for building new homes will be waived to create savings. Furthermore the levy known as the community infrastructure levy will also be discarded, providing more savings. These will combine to help make it possible to provide the 20% discount.
The plans are currently undergoing an eight-week consultation, where the details will be ironed out. However the plans are already receiving positive support from a number of councils and major building companies. This is good news for the future of the scheme. The consultation is set to end on 9th February, but potential buyers can register their interest in the scheme from January onwards.
Will this help first-time buyers get on the housing ladder?
A discount of 20% on the normal price of a home is a significant amount. On a property worth £150,000 for example, it would provide a saving of £30,000, bringing the purchase price down to £120,000. A £200,000 property would be reduced to £160,000 with the 20% discount in place.
Clearly those who have already passed the age of 40 won’t benefit from this new scheme if they have yet to get on the housing ladder. However, younger people will undoubtedly be pleased to hear this option will be available in the New Year, once the details have been ironed out. A discount of 20% could make all the difference between being able to afford a new home and going without one.
Some may have concerns over the potential outcome of the scheme if the Conservatives were to lose the next election. The potential is for the election to be a close call, with uncertainty over the outcome. However for the time being all eyes will be on this new offer that will become available in the New Year. It looks as though 2015 could be the year thousands of young people finally get to put their names down for their own homes. Work is set to begin on the first batch of properties under the scheme next year, so it will be some time yet before moving day arrives.