Buying your first home is one of life’s big milestones. But for many people under 40, especially in today’s market, it can feel more like a distant dream than an achievable goal. That’s where the Starter Home Scheme comes in.
At Friends Capital Mortgage Advisers, we’re here to make sense of your options and help you navigate government-backed schemes like this one. If you’re under 40 and trying to get your foot on the property ladder, this guide is for you.
The Starter Home Scheme is a UK government initiative designed to help first-time buyers under the age of 40 purchase their own home. The homes available under the scheme are brand-new builds, offered at a 20% discount on market value.
These properties are built on brownfield land—previously developed areas that are no longer in use—to keep costs down and ensure the developments don’t eat into the green belt.
The government’s ambition is to build 200,000 new homes under the scheme, specifically tailored to younger buyers.
Here’s a quick breakdown of what the scheme offers:
To qualify for the Starter Home Scheme, you must:
It’s worth noting that the 20% discount comes with a few conditions. For instance, if you sell the property within a certain time frame, you may have to repay a portion of the discount. This is to discourage people from buying simply to flip the property for a profit.
Let’s say you’re looking at a home with a market value of £250,000. Under the Starter Home Scheme, this same home could be available to you for £200,000—a saving of £50,000.
That discount is locked in at the time of purchase and helps lower your deposit and mortgage requirements. It makes home ownership more realistic for those who might otherwise struggle to save a large deposit.
But there’s a catch. To prevent buyers from cashing in on the discount too soon, there’s usually a resale restriction in place. If you sell the property within five years, you may have to pay back some or all of the discount to the local authority or housing provider.
Starter Homes are built on brownfield sites across England. Local authorities work with developers to release suitable land and ensure homes are built with the needs of younger buyers in mind.
While not every area may currently have Starter Homes available, the aim is to deliver 200,000 homes across the country, with an emphasis on locations where affordability is a challenge.
Areas prioritised often include:
To check if Starter Homes are being built in your area, you can contact your local council or speak with a mortgage adviser who keeps track of government schemes and developments.
Even with a 20% discount, you’ll likely need a mortgage to buy a Starter Home. That’s where we come in.
At Friends Capital, we specialise in helping first-time buyers understand:
We also help you access other schemes that can work alongside the Starter Home Scheme, such as the Lifetime ISA, which offers a 25% bonus on your savings (up to £1,000 a year) if you use them for a house deposit.
If you’re eligible, there are some major upsides to buying through the Starter Home Scheme:
Like any scheme, it’s not without its caveats:
The application process can vary by local authority, but typically includes:
Because demand can be high, it’s worth preparing in advance. Having a Mortgage in Principle ready can give you a head start.
The Starter Home Scheme is one of several government initiatives aimed at helping first-time buyers. Others include:
Each scheme has its own rules and benefits, and in some cases, they can be used together. That’s why it’s so important to speak with an experienced adviser who can help you explore your options.
Buying your first home can feel overwhelming. At Friends Capital, we work with first-time buyers every day and understand the ups and downs of getting onto the property ladder.
When it comes to the Starter Home Scheme, we can:
We’ll also keep an eye on new developments and upcoming sites where Starter Homes may become available, so you don’t miss out on opportunities.
The Starter Home Scheme could be the boost you need to make your first home a reality. With 20% off the market price, it’s designed to ease the financial strain and give younger buyers a fair shot at ownership.
But as with all property decisions, it pays to plan ahead, get sound advice, and act quickly when the right opportunity arises.
If you’re under 40 and ready to take the first step, get in touch with Friends Capital Mortgage Advisers today. We’ll help you understand your options, get mortgage-ready, and guide you through the process of owning your first home.
Need help buying your first home?
Call Friends Capital or book a free consultation. Let’s make home ownership more than just a dream.