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Cheaper property for first time buyers?

  • This new government scheme helps first time buyers buy at below-market-value prices.
  • The Starter Homes scheme can help you own a brand new home at an affordable price near you.
  • Contact us to learn more about the scheme and to arrange the most suitable mortgage.
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Starter Homes scheme

What is the Starter Homes scheme and who is eligible?

Buying a home with the Help to Buy or shared ownership schemes may not always be possible due to eligibility or affordability criteria. Recognising it, and also to help revive areas which were previously used for commercial or industrial purposes, the government introduced the Starter Homes scheme.

This scheme is exclusive to first time buyers aged between 23 and 40 and whose household income is no more than £80,000 per year outside London or £90,000 per year in London.

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How can we help you?

As independent, whole of market mortgage brokers, we have access to the lenders who offer mortgages for the Starter Homes scheme. Using our experience and expertise, we can find the most suitable deal for you.

Should you have any questions during the process, we are available from start to finish to answer your queries and help you with the necessary paperwork.

Important Starter Homes criteria

The new-build properties available under the Starter Homes scheme have a maximum purchase price of £250,000 outside London or £400,000 in London. This purchase price is at least 20% below the market value of the property.

However, the buyer can only resell the property during the first 5 years of ownership to another eligible first time buyer and with 20% discount from the market value. This was put in place to stop speculative investors participating in the scheme.

In addition, the buyer has to take a residential mortgage on the property. In other words, the Starter Homes scheme does not support cash buyers.

Sustainability of the Starter Homes scheme

Local authorities have been working together with developers to identify suitable so-called “brownfield” plots. These are sites that have been or are currently used for commercial or industrial purposes, and as such have not previously been considered for residential development. This move also eases the pressure to build on previously untouched “greenfield” sites in order to develop new homes.

So what’s next?

If you are looking to take advantage of the scheme, but cannot find many properties available, this is likely because the scheme is relatively new. Participating local authorities only started developing Starter Homes in 2017.

The Starter Homes scheme is great for young people who would not otherwise be able to buy their first home.

30 councils were initially selected to introduce the scheme. Eventually, more councils will be joining the scheme, and as a result, more Starter Homes will become available over the coming years. In the meantime, these are the first participating local authorities: Blackburn, Blackpool, Bristol, Central Bedfordshire, Cheshire West and Chester, Chesterfield, Chichester, Lincoln, Ebbsfleet, Fareham, Gloucester, Greater Manchester, Lincolnshire, Liverpool, Luton, Mid Sussex, Middlesbrough, North Somerset, Northumberland, Pendle, Plymouth, Rotherham, Rushmoor, Sheffield, South Kesteven, South Ribble, South Somerset, Stoke-on-Trent, West Somerset and Worthing.

You will need to do some research if you are interested in buying a new home at least 20% below the market price. First, check availability with your local council or with the developer of a newly built site to see if they participate in the Starter Home scheme. Alternatively, you can register your interest on the New Homes website to receive updates and information about new developments.

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As mentioned above, you will need to take out a mortgage for this scheme. At BlueWing Financials, we are here to help you get the best deal for your new home.

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