Discounts on New Homes
If you meet the criteria set down by the government (you are buying a new home, you are less than 40 years old, and you are a first time buyer) you could receive a discount of up to 20% on the purchase price. It is intended that the discount will be funded by local authorities waiving their fees, thus allowing developers to sell new builds at a lower price.
This is excellent news but there are questions which need to be considered.
Why is a discount only available on new builds?
If someone is trying to get on the housing ladder using this discount scheme, why restrict this to buying new homes? If the buyer lives in a small town or village, there simply may not be the new homes available for them to buy. And how is this going to affect the finances of local authorities, who are already strapped for cash?
What happens when I come to sell?
The first 200,000 applicants who are accepted will get a 20% discount on a brand new home. At the moment, there does not seem to be any restriction on the property being sold on at the full market value, say within 6 months. This does seem rather unfair to those who did not make it to the first 200,000 list, who still have to find the full market value for a property, even though they might meet all of the criteria laid down by the government.
What if they just let it out?
At the moment the answer to this is unclear. Perhaps there will be restrictions about these properties being bought and then immediately let but, but from a legal point of view, permanent covenants prevent letting could be problematic and adversely affect the resale value.
What about people who are over 40?
Unfortunately, the offer is simply not open to you, even if you have a more urgent need, with children or other dependents.
If you are lucky enough to qualify for this scheme, you should register quickly as the demand is likely to be high. It could be your lucky day! To register, visit www.starter-home.co.uk
If you would like to discuss any of the above issues, or if you require advice about this or any other property related issue, contact one of our experts by email or on 01271 343457 today.