On the 15th December 2014, David Cameron launched a new scheme that will offer 100,000 first time buyers the opportunity to purchase a brand new home with a 20% discount.
Aspiring home owners will be asked to register their interest in buying via the Starter Home initiative from the start of this year – at least 6 months earlier than planned.
At the very centre of this scheme, are innovative changes to the planning system that will allow builders to develop under-used or unviable brownfield land and free them from planning costs and levies. The result would mean that they would be able to offer homes at a minimum 20% discount exclusively to first time buyers that are under the age of 40.
Currently, obligations under Section 106 can result in builders facing an average bill of £15,000 per home in affordable housing contributions and tariffs. This can potentially add tens of thousands of pounds to the cost of a whole development site.
However, developers offering starter homes would find themselves exempt to such charges. The homes could then not be re-sold at market value for a fixed period – making sure that the savings are passed onto homebuyers.
The scheme has already attracted support from many of the nation’s leading house builders including Barratt, Taylor Wimpey, Bellaway and Redrow, who, together with the other developers that have pledged support, have built around 60,000 homes in the last year.
Executive chairman of the Home Builders Federation, Stewart Baseley, had this to say about the new scheme:
‘Increasing housing supply is a huge and complex challenge and significant barriers remain. Bringing forward more land for house building, while also enabling more first time buyers to realise their ambition of home ownership would be another positive step on the way to tackling the housing shortage.
The industry is keen to work with government to develop policies that would allow for more high quality homes to be built in the right places.’
Meanwhile, David Cameron said:
‘This is all part of our long-term economic plan to secure a better future for Britain, making sure we are backing those who work hard and get on in life’