First time buyers to get 20% off new homes

The scheme is paid for by a raid on councils' income

Click to follow
Indy Politics

Young people who want to buy their first house can register with the Government to receive a 20% discount on certain homes.

First-time buyers under 40 in England who sign up to the new scheme will have access to buy a new class of “starter homes”.

The Government hopes that house builders will build 100,000 of these homes over the next five-year parliament – or 20,000 a year.

The number of homes planned by the Government under the scheme is small in comparison to the total number of homes Britain needs to build, however.

The Business Secretary Vince Cable admitted last year that 300,000 homes a year were needed to meet current demand – more than double the current annual construction rate of around 130,000.

The “starter homes” will be cheaper for buyers because the Government is exempting them from fees charged by councils of up to £45,000 per home.

The figure is around 20% of the average house price of £218,000.

Councils' finances have already been hit by deep cuts to their central government grants and a centrally enforced council tax cap.

David Cameron described the new discount scheme as a “game-changer” for many people buying houses.

“We want to help people who work hard and want to get on in life but have been priced out of the housing market,” he said.

“A 20% discount off the price could be a real game-changer for many aspiring home-owners. My message is clear: we are on your side and we will help you fulfil your dream of buying your first home.”

The Communities Secretary Eric Pickles said the scheme would help younger people buy houses.

“The number of first-time buyers is already at a seven-year high and these Starter Homes, available at a 20 per cent discount, will help even more people realise their dream of home ownership,” he said.

Anyone who sells their home within five years will have to pay back the discount, however.

The scheme sits alongside the Government's Help to Buy scheme and the NewBuy guarantee scheme

People who want to register for the Starter Homes initiative can do so at www.new-homes.co.uk.

Comments