Major lenders have warned government officials they will not support Starter Homes unless ministers agree to a major climbdown over the discount period.

Accoridng to Inside Housing researchers:

“An “impasse” has been reached between a number of major lenders and the government over its plans to allow buyers to sell the flagship housing product at full market value after five years, Inside Housingcan reveal.

This would allow buyers to cash in the original 20% discount, meaning they could make profits of £141,000 by selling an average home bought under the scheme after five years.

Large lenders have now reached a deadlock with government, as they fear this could distort market values and incentivise people to overpay.

Most large lenders therefore want the 20% discount to be held in perpetuity, or for the period where the discount applies to a resale to be extended to 20 years.

However, it is understood Department for Communities and Local Government (DCLG) officials have so far rejected potential compromises, including a 15-year discount period with a taper after the first five.”