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Starter Homes Initiative

Three-and-a-half years after it was announced, no homes have been built under the Starter Homes Initiative.

In this article
How does the Starter Homes Initiative work? When will the first starter homes be available?
Is the Starter Homes Initiative right for me? Alternatives to the Starter Homes Initiative

Under the Starter Homes Initiative, the government has pledged to build thousands of new homes to be sold at a minimum discount of 20% to first-time home buyers aged between 23 and 40 - but as of mid-2018, no properties have yet been built. 

How does the Starter Homes Initiative work?

When it was announced (amid much fanfare) in 2014, the government said the initiative would allow first-time buyers to purchase new homes priced up to £250,000, or £450,000 in London, at below-market value. 

To be eligible, buyers would need a combined household income of less than £80,000 per year, or £90,000 in London.

In theory, the majority of the new homes were to be built on underused or unviable brownfield land, which the government would release to developers free from planning costs. Brownfield land tends to be vacant space that has previously been used for industrial or commercial purposes.


When will the first starter homes be available?

No specific dates have been set for the delivery of the first homes.

In January 2017, the government selected 30 local authorities to spearhead the schemes and offered buyers the chance to register their interest and receive official updates as they're announced.

In July 2018, a government spokesperson told Which?: 'We have spent £250 million buying land to build affordable properties, and work is underway getting them ready for development.

'It’s important we get Starter Homes right and we aim to introduce regulations on them alongside our new planning policy before building gets underway.'

The 30 councils signed up to deliver the first homes are as follows: 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. 

Is the Starter Homes Initiative right for me?

If it ever comes to fruition, the Starter Homes Initiative will present an attractive opportunity for first-time homebuyers who can't afford to pay full price for a property. 

In addition to a substantial discount, homebuyers would also be able to enjoy the benefits of buying a new-build property, including improved energy efficiency and lower maintenance costs. 

Starter homes might not be the best option for those who are looking to move up the property ladder quickly, however, as buyers wouldn't be allowed to sell homes on at full market value until 15 years after they are purchased. 

Find out more: First-time buyer guide

Alternatives to the Starter Homes Initiative

Help to Buy equity loans allow buyers to pay a 5% deposit on a new-build home, with the government lending you an extra 20% (40% in London) and you taking out a mortgage on the remainder.

If you can't afford to buy outright, shared ownership could also be an option. This involves buying a share of a property (between 25% and 75%) and paying rent on the rest. Some shared ownership schemes also allow you to increase your share at a later date, allowing you to build towards full ownership.