As the government introduces 100,000 new homes, could the Starter Home initiative be your ticket to an affordable first time buy?

Since the credit crunch of 2008, housebuilding has notoriously wilted. It is no secret that, whilst the number of new homes in construction has slowly improved since then, the market is still some way off where it really needs to be. Here the UK’s leading independent mortgage broker, Mortgage Advice Bureau, explores how the new government scheme will help first-time buyers in the New Year. “Although there are no quick fixes, increasing the supply of homes on the market needs to be a focus in 2015 if conditions are to improve, specifically for first-time buyers. This is why the new Starter Home initiative announced by the Prime Minister on the 15th December should be welcomed with open arms,” said David Treharne from Mortgage Advice Bureau. As part of the push to help people onto the property ladder, the Starter Home scheme will offer new homes with 20% discounts to 100,000 first-time buyers. New home builders currently face an average bill of £15,000 in Section 106 affordable housing contributions and tariffs when building properties, often adding tens of thousands to the final cost of a property. However, under the scheme, which starts early this year, the properties will be built on under-used land, which will allow developers to build the homes free from any planning costs or levies thus lowering the price. David added, “The homes will not be able to be resold at full market value for a fixed period of time which means that the savings should then be passed onto the next home buyers. The scheme is exclusive to first-time buyers who are under the age of 40. Prospective homeowners who are interested in the initiative will be asked to register from the beginning of this month – six months earlier than originally planned.” Increasing the supply of housing is not a simple process, but by bringing forward more available land whilst assisting first-time buyers at the same time, the scheme is certainly another positive move by the government in an attempt to combat the shortage. Saying this, the initiative will not solve the housing crisis on its own. The initiative should be viewed as another short-term solution that has been brought in to bring brownfield land back into use in a way that will provide an almost instant relief to the market by increasing the number of available homes, something that is so desperately needed. “What the next government plan to do to attempt to end the crisis is yet to be seen, but in the current climate this scheme should be seen as a helping hand in what is currently a severe problem throughout the UK market,” concluded David. To find out more information about the Starter Home initiative is it advised that you seek independent mortgage advice from a professional financial adviser. For further information please contact David on 07501 720320 or email davidtr@mab.org.uk. Alternatively, please visit www.dawsonsproperty.co.uk
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