The Government has published a consultation paper on how the new starter homes regulations will work.
A starter home is defined in the consultation as a new home available for purchase by qualifying first-time buyers and which is made available at price which is at least 20% less than its market value but which is below the price cap. A price cap of £250,000 outside Greater London and £450,000 in Greater London is specified in the Planning Bill. The clause also sets out the criteria which a person must fulfil to be eligible to purchase a starter home. These include that the purchaser is a first-time buyer (falling within the statutory definition) and that he or she is under the age of 40. The Secretary of State may also, through regulations, specify additional criteria a first-time buyer must fulfil for example nationality.
The consultation seeks views on various matters in relation to how the requirement for starter homes will operate, including;
- Whether there should be restrictions on the sale and sub-letting of starter homes for 5 years following their initial sale
- What flexibility there should be in the restriction of buyers being under the age of 40, for example where a couple is looking to purchase a starter home but one of the couple is over the age of 40.
- What the requirement for starter homes should be in new residential developments. The consultation paper suggests a threshold of 20% starter homes in new residential developments of 10 units or more or on sites over 0.5Ha in area
- Whether there should be an exemption from the requirement to provide starter homes in cases where the viability of the development would be compromised.
- Whether the starter homes requirement can be met by commuted sums paid to the Local Authority towards the provision of starter homes elsewhere where the Local Authority agrees.
The consultation document can be downloaded at https://www.gov.uk/government/consultations/starter-homes-regulations-technical-consultation. The consultation runs until the 18th of May 2016.
If you have any queries with the consultation paper then please do not hesitate to contact us.