First time buyers in England boosted by discount

Gamechanger: Cameron. Picture: Getty
Gamechanger: Cameron. Picture: Getty
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YOUNG first time buyers in England will be able to steal a march on their Scottish counterparts when it comes to taking their place on the housing ladder thanks to a “game- changing” government scheme that launches tomorrow.

The starter homes initiative allows prospective buyers under the age of 40 to claim a 20 per cent discount on a property due to relaxed planning rules for underused land on unviable brownfield sites.

The project allows developers to use the land to build properties which will then be sold a fifth below market value. About 45 developers have so far expressed an interest in taking advantage of the move, that would save them around £15,000 per home in obligations.

The rollout of the discount puts Scottish first time buyers at a further disadvantage after authorities in Wales confirmed they were to extend their Help to Buy scheme beyond the end of March 2016.

While the Help to Buy scheme in England has been extended to 2020, the Scottish shared equity equivalent’s final funding tranche of £130 million will expire at the end of the 2015-16 financial year.

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Trade body Homes for Scotland has warned that although buyers in the rest of Britain can take advantage of “an extended and fully funded scheme” to meet demand, those in Scotland face the prospect of funds for the final round being “exhausted early” because of high demand.

The starter homes initiative in England applies to buyers under the age of 40. The discount will apply for five years to prevent anyone seeking to make a quick profit.

Prime Minister David Cameron said: “We want to help people who work hard and want to get on in life but have been priced out of the housing market. A 20 per cent discount off the price could be a real gamechanger for many aspiring home-owners. My message is clear: we are on your side and we will help you fulfil your dream of buying your first home.”

But shadow housing minister Emma Reynolds said it remained unclear how the policy would deliver.

“Warm words from David Cameron about home ownership will ring hollow for those young people and families who have been priced out of home ownership over the past five years,” she said.

“This government has presided over the lowest levels of house building in peacetime since the 1920s and home ownership is at its lowest level for 30 years. There is also a record number of young people living at home with their parents in to their twenties and thirties.

The Scottish Government said its Help to Buy (Scotland) scheme has provided funding of £220m over three years from 2013 to help people buy a new-build property from a homebuilder who has been approved to participate in the project.

A spokesman said the government has “no current plans for an equivalent scheme to the one announced in England.”

He added: “A strong and growing house-building industry is key to Scotland’s future economic prosperity. The Scottish Government will do all it can, within our powers and our resources, to help people get a foot on to the housing ladder.”