Lord Kennedy of Southwark – 2015 Parliamentary Question to the Department for Communities and Local Government

The below Parliamentary question was asked by Lord Kennedy of Southwark on 2015-11-10.

To ask Her Majesty’s Government what is their assessment of the size of deposit needed to buy a starter home in London.

Baroness Williams of Trafford

Starter Homes will be sold at a minimum of 80% of the full market price and offered to first time buyers under the age of 40. The discounted Starter Homes price will be capped at £450,000 in London.

The cap is not an expectation of the going price for a Starter Home. Most first time buyers are not buying average-priced properties, but those at the lower quartile of values in an area. This is the first time buyers market that exists, and this is where we anticipate developers pricing starter homes

Starter homes will reduce deposit requirements for first time buyers. The average price paid by a first time buyer in London in Q2 2015 was £376,000 (Office for National Statistics data). The discount achieved through the Starter Home initiative would reduce the price of such a property to £301,000 and also reduce the deposit.