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‘Starter Homes’ Scheme Loophole Benefits Buy to Let Landlords


The Government’s new ‘Starter Homes’ scheme is intended to help young first time buyers get a foothold on the property ladder. 200,000 new homes will be built by 2020, which will be offered at a 40% discount to first time buyers under the age of 40.

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However, although in theory it sounds like a great scheme for anyone who can’t afford to buy at current market prices, the Liberal Democrats are concerned that savvy landlords and property developers will exploit a loophole in the current terms and conditions, which will allow them to rent these properties out.

A Share of the Profits As the legislation currently stands, there is no requirement for the person who buys the property to actually live in it. So, it won’t be terribly difficult for wealthy parents to give their kids cash to purchase a discounted home, and then let it out for a profit. Furthermore, there is also nothing to prevent a property developer from striking a deal with a first time buyer to share any profits made from letting or selling on the property.

Lib Dems Call for Loophole Closure According to Tim Farron, leader of the Liberal Democrats, “The Government’s plans for Starter Homes are very badly designed and will fail to help the right people. They will be snapped up by the sons of millionaires and make them a huge profit. Those who can’t turn to the bank of mum and dad should not lose out. It is vital the Government makes changes to its housing policy.”

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