New Discounted Homes Announced For First Time Buyers
The government has announced plans to build 20,000 new homes every year that will be discounted for first time buyers under the age of 40. The scheme is seen as another sweetener just before the election. The government hopes that 100,000 new homes will be built over the next 5 years under the scheme. It is still a fraction of what needs to built every year just to keep up with the current demand but many first time buyers will be attracted to the scheme because they will be able to buy these new starter homes with a 20% discount. The UK is still way behind in terms of actual units that are required. According to experts we need to build 300,000 new homes every year but we are only building 130,000 new homes annually. The government has said that the scheme will build a new class of starter homes.
Starter Homes To Be Exempt From Usual Council Fees
The government has said that the new starter homes will be exempt from the usual fees that local councils charge in fees. When a new home is built the council are able to charge on average fees of circa 45,000. These fees must be paid by property developers before the houses are sold. These costs are normally passed onto the buyers which pushes up the prices. The councils are gong to waive these fees which will mean that the buyers are going to get a discount of around 20% on this new class of starter home. It is an interesting development considering councils are already under pressure with recent spending cuts. This will no doubt mean that all councils will need to make more cuts in their budgets to pay for these new homes.
Move Welcomed By First Time Buyers
This move will be seen as popular amongst first time buyers who are being priced out of the market and need help to get onto the housing ladder. Much has been done by the government to help buyers but has been accused of creating the demand for homes but not building enough homes for these buyers to move into. Much of the recent house prices increases has been attributed by the "Help To Buy Scheme". This scheme is still being offered by the government but many property experts have said that they would like to see the scheme stopped before the market overheats. Whilst the housing market has seen some meteoric increases over the last 2 years there are some signs that the market has cooled over the last few months.
First time buyers are at a seven year high as they look to take advantage of the various schemes that are on offer. They are also keen to buy a home because it is currently much cheaper than renting. Anybody buying one of these new starter homes will have to repay the 20% discount if they sell within 5 years.
More information can be found here https://www.gov.uk/government/news/20-discount-on-your-first-home-announces-pm