Examining the Starter Homes Initiative

The government aims to provide 200,000 starter homes by 2020-21, sold at 20% below market value, so that those first time buyers under 40 are able to get a foot on the property ladder.

£2.3 billion of funding has just been agreed, to support the funding of these new starter homes.

But here's the thing: these developers then give these houses to housing associations who rent to others below the market rate (usually those on lower incomes). Since social renting is reducing, housing association projects are becoming underfunded. This means that subsidized rental homes are now being offered as starter homes, to be sold off at 20-25% below market value. Yes, it’s complex, but look at it this way: Short term, this supplies younger people with the affordable starter homes that they so desperately need. Sold at a discount of 20% of market value, houses will be capped at £450,000 in London and £250,000 in the rest of England.

But there’s a catch (there’s always a catch)… 

Download the full PDF document HERE.