First-time buyers using the government ‘starter homes’ scheme can pocket £141,000 by purchasing homes at a discount and selling them on in five years, the campaign group Generation Rent warns.
First-time buyers using the government ‘starter homes’ scheme can pocket £141,000 by purchasing homes at a discount and selling them on in five years, the campaign group Generation Rent warns.
A total of 200,000 first-time buyers using the scheme will be able to purchase properties at a 20% discount but sell them off at the full market rate in five years.
Generation Rent labelled this government-subsidised profit as a “£27bn raffle” which will condemn another two million potential first-time buyers to the private rental sector.
Betsy Dillner, director of Generation Rent, said: “The government said its starter homes would be exclusively for first-time buyers, but by letting them vanish into the open market after five years, they’re betraying the millions who are stuck renting.
“A perpetual 20% discount would help multiple first-time buyers, instead of a jammy handful of winners in a multibillion pound raffle. While a household using the scheme couldn’t sell at the full market price they would be in a much better financial position than if they were still renting.
“The government should keep its promise to first-time buyers and build starter homes for the many, not the few – as well as homes for those who aren’t in a position to buy.”
Generation Rent came up with the £141,000 figure by factoring in potential house price increases of 5% per year and the average cost of a new build home in England.
Buyers purchasing a £297,000 home could buy for £238,000 using the scheme, then sell it on for £379,000 after five years.
