Mortgages >Homebuy Schemes The Starter Home initiative

The Starter Home initiative

In an attempt to help get more people onto the housing ladder, Prime Minister David Cameron has launched a scheme which offers 100,000 homes to first-time buyers with a 20 per cent discount on their normal costs.

Called the Starter Home initiative, the scheme will last for five years, with the government's intention being to build 100,000 new homes by 2020, on top of the other houses being built during that time


Those who are interested in signing up must register their interest online, and hope to be selected. However, due to the demand this will likely generate, it is not open to everyone. You must be a first-time buyer, and below 40 years old, in order to apply.

For those who are successful, they will be able to purchase a home with a minimum discount of 20 per cent. However, they will have to repay this price advantage if they re-sell within 5 years, to prevent people trying to buy the houses cheaply just to then quickly sell them for a profit.

Purpose and process

The scheme is intended to free up the planning system without putting a burden on the taxpayer, aiming to encourage home ownership and construction on brownfield land (land which has previously been developed).

The government has promised that the houses will still be well-designed, despite being cheaper to buy than normal. There will be no compromising of the build-quality and energy efficiency.

In order to fund the discounts, certain charges that are normally involved with new property developments are being waived. When these charges are in place, the cost of a new property is typically £15,000 more than when they are waived. By freeing the developers of these charges, the government hopes to be able to generate substantial interest in the idea of offering 20 per cent discounts.

Being able to successfully supply 100,000 houses at a discounted rate requires effective cooperation between the government, developers, local authorities and also landowners. These are the parties involved in bringing such a scheme to fruition.

So far there has been a strong level of interest from many relevant parties in participating in the scheme, keen to turn unused (or previously unviable) land into affordable housing.

Previous developments

The Help to Buy scheme was started in April 2013 and has helped approximately 80,000 first-time buyers onto the property ladder so far. It was originally intended to run until December 2016, but has been extended until 2020.