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In December 2014, the Prime Minister David Cameron announced a new scheme aimed at providing affordable Starter Homes, exclusively to first-time buyers under 40 as part of the Government’s strategy to increase home ownership across the country. The scheme was launched in February 2015 with purchase and preparation of the first sites planned to begin in the same year.

Starter Homes are exclusively available to young first-time buyers, who benefit from a 20% reduction on market value; with properties set to cost no more than £250,000 outside of London and £450,000 within London. The 20% reduction is to be retained for five years following the initial sale, after which the property will be sellable at full market rate.

Starter Homes are to be built on brownfield ex-commercial or industrial land (although other brownfield sites will also be considered); with developers not required to make section 106 or Community Infrastructure Levy contributions on sites provisioned for the scheme. No Green Belt land is to be built on.

In order to increase the viability of the scheme, a small proportion of market value homes are also to be built on Starter Home sites, with the hope that this will also promote mixed communities in keeping with the guidance found in the National Planning Policy Framework.

A working group of developers, lenders and local authorities for consideration of technical issues, including resale, is to monitor the scheme and report back findings on progress and functionality as the scheme is implemented.

Following an announcement from George Osbourne that the scheme was to be rolled out to rural exception sites (where homes retain their discounts in perpetuity against the Starter Homes’ 5 years); concerns were raised that the policy might affect rural people’s ability to afford to buy in their local areas and could effectively result in commuters outbidding local people for housing.


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