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ARTICLE · 18 NOVEMBER 2016

Starter Homes: Not To Be Confused With Affordable Housing

Gowling WLG
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The government's drive to support home ownership continues apace. The Housing and Planning Act 2016, in force since May of this year, provides a statutory framework for the delivery of 'Starter Homes'.

CanadaReal Estate and Construction
Jacqueline Knox
Jacqueline Knox
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The government's drive to support home ownership continues apace. The Housing and Planning Act 2016, in force since May of this year, provides a statutory framework for the delivery of 'Starter Homes'. But what are they and what implications are they likely to have for Registered Providers (RPs)?

What is a starter home?

Starter homes are defined as:

  • A new dwelling
  • Available for purchase by qualifying first-time buyers
  • At a price at least 20 per cent less than market value
  • Attracting restrictions on re-sale or letting

Typically, a starter home is not expected to be priced more than the average price paid by a first time buyer after the 20% discount is applied. This would mean the discounted price should be no more than £450,000 in London and £250,000 outside London. If the buyer of a starter home wants to resell or lease the property within 8 years of buying, a taper mechanism will be applied under which the amount of repayment required or the

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