What is "starter home"

A starter home or starter house is a house that is usually the first which a person or family can afford to purchase, often using a combination of savings and mortgage financing. In the real estate industry the term commonly denotes small one- or two-bedroom houses, often older homes but sometimes low-cost new developments. The concept originated in the United States during the post-World War II era when entry-level home ownership was a preferred option for young families and regarded as part of the American Dream.

The original concept of a newly built starter home outside of the city has changed due from both the end of low-cost land development and the changing preferences of successive generations in the United States. Since the end of the 20th century, more new homeowners are seeking different kinds of housing such as a condominium or older existing home.

A starter home is in the United Kingdom a house sold at a 20% discount to first time buyers under 40. Starter homes are a policy of the Conservative Government. Starter homes are being introduced in the Housing and Planning Bill 2015-16. The National Housing Federation have described starter homes as “yet another short-term initiative that fails to address the root of the problem”.