In the Autumn Statement and Spending Review 2015, the government reaffirmed the commitment to Starter Homes launched in December 2014 with a plan to build 200,000 homes over the next five years. The announcement, together with the announcements on the New Homes Bonus and extension of the Help to Buy scheme, was seen as good news for housing developers, many of whom saw an immediate increase in share prices.
First-time buyers under the age of 40 will be entitled to purchase a Starter Home with 20 per cent off the market price. Sale prices are not to exceed £250,000 outside London and £450,000 in the capital. Purchasers will be prevented from disposing of those homes for an initial period of five years.
House builders will be offered an exception from section 106, affordable housing contributions and Community Infrastructure Levy charges in order to facilitate development.
Qualifying criteria will include a requirement that the homes be built on designated Starter Home developments with an intention to use previously under-utilised brownfield sites. Land that is currently earmarked for development would not qualify. The criteria suggest that developments cannot also include market price units.
The government will be introducing design requirements and publishing further guidance on Starter Homes in due course through the Home Builders Federation. Unregistered house builders and first-time purchasers are in the meantime being urged to register their interest at www.new-homes.co.uk/starter-homes.
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