Thursday, 19 January 2017

Minister rules out perpetuity for Starter Homes discounts

Brandon Lewis has ruled out perpetuity for Starter Homes discounts, but will consider increasing the discount period to 10 or 15 years, Inside Housing can reveal.

The housing minister said the long-awaited consultation on Starter Homes will launch “imminently” as he visited MIPIM, the international property conference in Cannes, France, today.

The government has come under pressure from some major lenders to increase the discount period on Starter Homes from the currently proposed five years.

After that period, buyers would be allowed to sell at full market value, effectively cashing in the 20% discount.

Lenders have been pressuring ministers to extend the discount period from five years to 10 to 15 years to prevent the market overheating.

Speaking today, Mr Lewis said: “There will be no discount in perpetuity. If you say to the buyer you can never realise the full value, you could argue that’s not really a discount.”

Pressed on whether he would be willing to increase the discount period to 10 or 15 years, he said: “I wouldn’t rule out anything other than perpetuity. I will look at the consultation and I will take a view. You can see from my record as minister, I am willing to listen in consultations.”

Inside Housing reported earlier this month that the government had reached an impasse with lenders over the discount period, with some major lenders refusing to back the scheme unless the government gave ground.

Today’s comments are the first indication that the government may be willing to show some flexibility.

The government has committed to build 200,000 Starter Homes over the life of this parliament. The maximum price is capped at £450,000 in London and £250,000 elsewhere.   

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