Mon 02 Mar 2015 View all news articles

20pc discount on your first home announced by Prime Minister

Aspiring home owners will be asked to register their interest in buying via the Starter Home initiative from the start of next year – at least six months earlier than planned. And many of the country's leading house builders and councils are already looking at sites that could be used for new homes.

The scheme will work with a change to the planning system to free under-used or unviable brownfield land from planning costs and levies in return for a below market value sale price on the homes built on the site.

Developers and councils are being asked to respond to the proposals to ensure the changes will unlock a range of sites across the country.

At the heart of the Starter Homes initiative is a change to the planning system. This will allow house builders to develop under-used or unviable brownfield land and free them from planning costs and levies. In return, they will be able to offer homes at a minimum 20% discount exclusively to first time buyers, under the age of 40. Currently, builders can face an average bill of £15,000 per home in Section 106 affordable housing contributions and tariffs, often adding tens of thousands to the cost of a site. Under the proposals, developers offering Starter Homes would be exempt from those Section 106 charges and Community Infrastructure Levy 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.

Already leading house builders, including three of the nation's largest and councils from up and down the country have pledged their support for the initiative, which will bring much needed homes onto sites that have previously been deemed unviable and are lying unused. More than 30 house builders have said that that they support the plans and would consider bringing forward land to develop the new, discounted houses, from next year.

A new design panel, including world famous architects such as Sir Terry Farrell and Sir Quinlan Terry will be established to ensure that new homes are not only lower cost but also high quality and well-designed.

Prime Minister David Cameron said: "Hardworking young people want to plan for the future and enjoy the security of being able to own their own home. I want to help them do just that.

"Under this scheme, first-time buyers will be offered the chance of a 20% discount, unlocking home ownership for a generation.

"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.

Stewart Baseley, executive chairman of the Home Builders Federation, added: "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."

Communities Secretary Eric Pickles said: "The 2008 housing crash blocked millions of hard-working, creditworthy people from becoming homeowners, at a time in their lives when they should have been able to expect to get on the property ladder.

"We're turning that around with Help to Buy, but today's new Starter Homes scheme will offer a further boost, giving young people (under 40) the opportunity to buy low cost, high quality new homes for significantly less than they would normally expect."

Sir Terry Farrell CBE, Founding Partner at Farrells, said: "This panel has the potential to make a real difference. It builds on the recommendations of the Farrell Review, which highlighted the need for more proactive planning and better placemaking as we attempt to address the housing crisis, with radically higher priority given to landscape, sustainability and the public realm.

"Only by planning and designing our villages, towns and cities together with local communities can we create the kind of built environment we all aspire to and should be demanding."

Source: Mortgage Introducer

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