Government announces new First Homes scheme
The Housing Secretary Robert Jenrick MP has announced Government plans to cut costs of a proportion of new homes by a third for first-time buyers.
The First Homes scheme will see a discount locked into the property to ensure more first-time buyers benefit in years to come.
It will give people the opportunity to buy a home in their local area – saving eligible first-time buyers on average around £100,000. In turn this will scheme will lower deposit and mortgage requirements for local first-time buyers in England.
Discount stays with the home
When they come to sell the discount will remain in place, so the next buyer gets the benefit that the current owner had.
Paula Higgins, chief executive of the Homeowners Alliance, said: “The scheme will apply the discount in perpetuity, so when the home is sold in years to come the new local buyer will be able to purchase it at a discount as well.”
How will it work?
We don’t know the exact details but the Government is consulting on the proportion of new homes that will be part of First Homes and exactly how it will be delivered.
It said that veterans will be prioritised as part of Armed Forces Covenant and councils will also be able to use the scheme for front-line workers in their area such as police, nurses, prison officers and teachers.
It added that the discount will be paid for through the contributions that housing developers routinely provide through the planning system. These contributions are an established mechanism for ensuring that new developments deliver benefits for local communities. This means that the First Homes scheme will not result in extra building costs.
Housing Secretary Rt Hon Robert Jenrick MP said: “First Homes will be life-changing for people all over the country looking to buy their first home.
“I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. A proportion of new homes will be made available at a 30% market discount rate – turning the dial on the dream of home ownership.
“The discount will be passed on with the sale of the property to future first-time buyers, helping thousands more people in years to come and ensuring local communities can stick together.”
The average price of a newly-built home in England is £314,000. Under First Homes, a property sold with 30% off this price would deliver a £94,000 saving and enable first-time buyers to get on the ladder faster by taking more than £18,000 off a 20% deposit.