Mortgages  

Gov’t consults on discount first-time buyer scheme

The government has started a consultation on plans for a new scheme offering 100,000 first-time buyers new homes with a 20 per cent discount.

Prime minister David Cameron announced the scheme today (15 December), explaining that aspiring home owners will be asked to register their interest via the Starter Home initiative from the beginning of next year, with house builders and councils already looking at sites that could be used for new homes.

This consultation sets out proposals for the scheme and seeks views about the planning policy change and its implementation.

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The government has suggested a change to the planning system to free up under-used or unviable brownfield land from planning costs, giving levies in return for a below market value sale price on the homes built on the site.

Around 100,000 homes will be available to first time buyers under 40 year of age as part of the initiative, with work on the first raft starting next year.

Paul Smee, director general of the Council of Mortgage Lenders, stated that mortgage lenders support measures that deliver affordable ways for people to access home-ownership.

“This new scheme should provide a modest additional flow of lower-cost housing for first-time buyers, which we welcome.

“Lenders will need to consider whether there are any specific lending risks involved, and we will respond to the consultation to help ensure that the scheme is practical and workable from a lending perspective.

He added that once the scheme is up and running, CML will help signpost first-time buyers to government’s specific website.

The CML intends respond to the consultation by the closing date of 9 February.

peter.walker@ft.com