Under the government’s new Starter Home scheme, buyers can reduce the price of a new home by 20% off the standard price. These properties are only available to first-time buyers.
The average price of a new home in England is £218,000, so the scheme could save buyers around £43,000, provided that they are under 40 and part of the designated Starter Home development.
The government wants 20% of new houses to be available on the scheme, but a during a recent consultation with the government, the National Housing Federation (NHF), the Chartered Institutes of Housing (CIH) and the Local Government Association (LGA) expressed the view that local councils should decide the proportion of Starter Homes. The councils would base their decisions on local population growth, market forces and the need for affordable rental properties.
First-time house buyers that want to find a Starter Home in their area can go to the Home Builders Federation website New-Home.co.uk to search for suitable houses.
The government has introduced a number of other ways to help first-time buyers including, the Help to Buy ISA, shared ownership and equity loans. House prices are expected to fall this summer too, so now could be a good time for buyers to enter the housing market.
Mortgages are available at low interest rates, but buying a house is usually the most expensive purchase people make. If buyers become unemployed through sickness, accident or redundancy, then they risk losing their home if unable to pay the mortgage. It is vital to take out mortgage protection that will cover mortgage payments in the event of being work.