New measures target younger first time buyers

02-Oct-2014

A series of new measures have been unveiled as part of a bid to encourage more younger people to invest in a property.

Prime minister David Cameron, announced that first time buyers under the age of 40 are to be offered 20 per cent discounts on 100,000 new properties.

Houses built under the government's proposed Help to Buy: Starter Homes scheme would also be exempt from a range of taxes, enabling them to be sold for 20 per cent below the normal market rate.

This means that a house worth £200,000, for example, could be purchased by a first time buyer for £160,000 – a discount of £40,000. 

The scheme was unveiled under the Tory party's conference, and is part of a drive to boost homeownership.

Announcing the measures, Mr Cameron said: "We want to help more young people achieve the dream of homeownership so today I can pledge we will build 100,000 homes for young, first-time buyers. We will make these starter homes 20 per cent cheaper by exempting them from a raft of taxes and by using brownfield land. 

"I don’t want to see young people locked out of home ownership. We’ve already started to tackle the problem with Help to Buy mortgages – and these new plans will help tens of thousands more people to buy their first home."

Under the plans, the properties will be built on brownfield land; plots that have already been earmarked for development but are no longer needed for industrial or commercial use.

Before the homes are constructed, developers will have to prove that the homes they build will be one-fifth cheaper than comparable houses in order to qualify for the cheaper plots and tax exemptions.

The new initiative has been welcomed by campaigners. 

Stewart Baseley, executive chairman of the Home Builders Federation, said: "Enabling more first-time buyers to realise their ambition of home ownership and introducing policies that allow more land to come forward and increase house building would clearly be positive."

Increase in first time buyers

Initiatives such as Help to Buy, and all of the variations that encompasses, have helped to fuel the general positivity in the housing market.

Figures by the National Association of Estate Agents, for example, revealed that in August, 28 per cent of sales were to first time buyers. This is the first time this has gone up since April.

Furthermore, almost half of all homes sold were to people aged between 31 and 40, while just three per cent to those aged 18 to 30.

Increasing sales

A separate report revealed a seven per cent increase in the number of first time buyer completions since last year.

In addition, the research by Your Move and Reed Rains revealed that the average first time buyer paid £151,942 for their first home.

Conclusion

The drive to boost the number of first time buyers and build more homes has undoubtedly helped to boost the general optimism surrounding the property market.

The increase in first time buyer sales also represents yet more positive news for the UK housing market.

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