From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.

  1. Home
  2. News
  3. News & Views
  4. CML responds to starter homes initiative

CML responds to starter homes initiative


Published: 16 December 2014 | Author: Bernard Clarke

We welcomed the government’s announcement of its scheme to provide starter homes for first-time buyers, which should produce a modest additional flow of lower-cost housing for this group of purchasers.

Our members will need to consider whether there are any specific lending risks involved, and we will consult with them and respond to the government’s consultation on the scheme. Our aim will be to help ensure that it is practical and workable from a lender perspective.

Lenders support measures that deliver affordable homes for people to become home-owners and, once the scheme is up and running, we will help direct first-time buyers to government information provided through the internet.

Under the scheme, the government proposes to introduce a new planning policy enabling starter homes to be built on under-used or unviable brownfield sites not currently identified for housing.

It also wants to use planning obligations or conditions to ensure that these newly-built starter homes are only available to buy or occupy for young first-time buyers and are sold at a minimum discount of 20% below their open market value.

To help cover the cost of the discount, the government proposes to remove obligations on developers to fund section 106 affordable housing contributions that are used to pay for general infrastructure improvements. It also proposes to allow an exemption to the community infrastructure levy on starter homes to help deliver the discounted price. As part of the scheme, the government wants to:

  • champion the good design of starter homes through the creation of a design panel; and
  • develop a register of first-time buyers’ interest in starter homes with the private sector to identify and stimulate demand.

The government says that it wants to work with developers, local authorities and land-owners to enable 100,000 starter homes to be built over five years.