Dramatic changes for first-time buyers announced
David Cameron has proposed that new rules for developers will be put in place to ‘get homes built’. He is keen for first-time buyers to become ‘generation of buyers’ and not remain generation of renters.
Cameron wants to rid the rule that currently requires developers to provide a number of homes in new developments as rental properties and instead, make them affordable to buy for people in their 20s and 30s that either rent or are still living at home with parents.
The change will mean that the section 106 ‘affordable housing’ definition will not only mean properties for rent but also include ‘starter homes’.
So, what is a ‘starter home’, who are they for and what will they cost?
A starter home will be a low cost home built specifically for first-time buyers under the age of 40. This approach will mean that these houses must be priced at a 20% discounted rate and capped at £450,000 inside London, and £250,000 anywhere else.
Why has this come about?
Last year’s Tory party conference pledged to build 100,000 low cost homes, which was extended this March to 200,000, by the end of this parliament. A survey shows that 86% of people in England and Wales don’t want to rent and are therefore interested in buying and owning their first home.
Who will benefit?
This new scheme should benefit developers as they will be able to sell properties on new developments rather than rent them meaning they will get a quicker income from the builds. We should hopefully see an increase in first-time buyers that are able to own their own homes.