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First home buyer subsidy to see results in 2017

There are concerns that the Starter Homes Land Fund for new developments may be promising more than it can deliver, despite assurances from the Housing Minister Gavin Barwell.

Throughout England over £1.2 billion will be invested in new developments across 30 council authorities. The scheme is available to eligible participants aged between 23 and 40. The discount provided by the funding will be approximately 20% of the market value. The purpose of the scheme is to allow younger first time home buyers to have access to the first rung of the property ladder - often out of reach in these times of economic uncertainty. If the development is located outside of London the discount will be available on properties worth up to £250,000. The discount will be available on new homes in the capital worth up to £450,000.

While it appears everyone is on board, with 1 in 3 local councils participating in the programme, there are concerns about the timing and the speedy delivery with which the government is promising to implement the scheme. The coalition government announced the Starter Homes Land Fund back in 2014, although the first ground will be broken on site this year. Perhaps optimistically, there are plans to build 200,000 new Starter homes by 2020. With the combination of an unpredictable economic future post Brexit, a drop in the power of the pound and a shortage of construction workers, anyone except the government insiders might be hesitant to back the completion of the project on time.

 

Structural Defects Insurance

In addition to the ambitious deadlines, there are concerns that many young people will be excluded from the scheme. More and more young people are in part time insecure employment and are forced to pay comparatively high rental prices. Those factors decrease the ease with which to start saving for a deposit of any size.

This project is large, ambitious and a few years in the making. It follows on the heels of another recent announcement regarding England’s lack of housing. Development of around 48,000 new homes in so called garden villages are proposed across 14 sites across the country. The White Paper on housing supply will be released by the government in coming months, and hopes to lay out plans for the future of housing construction and development.

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