Starter New Homes

There is a New Way to Buy



Getting on the property ladder can seem like a distant dream to most people. It is the age old dilemma of how you can possibly save when you are paying rent? And when I say save, I mean save. For most first time buyers they need at least a 10% deposit on a first home to even be considered for a mortgage.

For most people this will be between £10,000-30,000 depending on where they live and their desired house value. And that is just for the deposit, add in stamp duty, solicitors fees, home-buyer surveys and moving fees – the amount people actually need to get a foot on the property ladder soon racks up to an unmanageable amount. 
 

How The New Scheme Works 


In April 2013 the Government released the Help to Buy Scheme for first time buyers who could afford mortgage repayments but not the deposit. The scheme stipulated that these first time buyers could buy a home with just a 5% deposit rather than the usual 10% on a home worth less than the value of £600,000.  Despite the success of the scheme, home ownership remains at its lowest level for the past three decade so in addition to the Help to Buy Scheme the Government has issued the Starter Home Scheme – aimed to encourage people to buy their first home.

Rather than reducing the deposit that is required to buy a home, this scheme aims to reduce the actual cost of the property by building new build homes on previously used ‘Brownfield’ land. Once used for commercial or industrial land, there are over 66,000 acres of brownfield land which sit derelict or contaminated in the UK alone. Subject to environmental consultations and vigilant testing, if land is deemed safe for redevelopment then it can be used to build new homes. Under the new scheme the government wants to put aside local authority fees for new home building of at least £45, 000 per house on a brownfield site – meaning they can offer potential first time buyers a 20% discount for buying on reused land.
 
These cut price homes will be available across the UK and available for first- time buyers under the age of 40.

 

Publish date: 07/06/2016