Plans to create more affordable starter homes to get first time buyers on the property ladder will go ahead, says David Cameron.
The news, announced in the Prime Minister’s conference speech, is set to turn “generation rent to generation buy” through the creation of thousands of lower-priced new homes on new developments. The government wants to see 200,000 starter homes delivered over the next 5 years.
In the 2015 Autumn Statment, Chancellor George Osbourne has announced the origanlly proposed 200,000 starter homes has now been increased to 400,000 and the housing budget increased to £2 billion a year.
What does this mean for home owners?
The scheme will allow home builders to fulfil their obligation to build affordable homes on developments by creating starter homes that sell for 20% less than the market rate. Currently all new developments have affordable homes available to rent.
The starter homes will have a price cap of £450,000 inside London and £250,000 outside the capital and will be available to anyone under 40. Homeowners will only be able to sell them at full market value 5 years after purchase.
The scheme could save the average first time buyer £43,000 on a £218,000 home (the national average cost paid by a first time buyer).
What does this mean for you?
Strata’s sales director Gemma Smith said about the news: “We are committed to providing affordable homes, and homes that are accessible to first time buyers. The government’s Help to Buy schemes, and the Help to Buy ISA, have been effective in getting more people on the property ladder.
“This initiative should further help people who currently can’t afford their own home, to turn their dreams into a reality.”