First-time buyers in England will be able to apply for a discount of up to 50% on a new-build home under a new government scheme launched today.
The First Homes initiative, which could save some buyers £100,000 or more, is aimed at helping first-time buyers onto the property ladder by offering homes at a discount of at least 30% compared with the market price.
However, local authorities will be able to offer a discount of up to 50% “if they can demonstrate a need”.
The government says the scheme is aimed at first-time buyers in the area where the homes are built, many of whom will be keyworkers such as NHS staff and those on the pandemic frontline such as delivery drivers.
The discount will be passed on with the sale of the property to future first-time buyers, meaning homes will always be sold below market value.
Households with a combined annual income of more than £80,000 (£90,000 in Greater London) cannot apply.
Local councils will be able to bring in their own requirements, such as prioritising keyworkers or local people.
Price caps will be in place, meaning that, after the discount has been applied, the buyer cannot be required to pay more than £250,000 (£420,000 in Greater London).
However, councils will be able to make the case for imposing lower price caps.
Those who can afford to buy a First Home without a mortgage will not be eligible, and there are measures aimed at preventing people buying the homes purely as an investment.
Commenting on the launch of the scheme, Robert Jenrick, the Housing secretary, said: “First Homes will offer a realistic and affordable route into home ownership for even more people who want to own their own home.”
The Housing ministry added: “The scheme will support local people who struggle to afford market prices in their area, but want to stay in the communities where they live and work.”
First Homes is the latest initiative aimed at tackling the challenges of getting on the property ladder and follows a government guarantee scheme for 95% mortgages.
The initial First Homes properties went on sale today as part of the opening phase of an early delivery project in Bolsover, Derbyshire.
More new homes are set to be offered to first-time buyers across the country in the coming weeks, with the government pledging to fund 1,500 homes that will come onto the market from this autumn.
It added that at least 10,000 homes a year will be delivered in the years ahead, “and more if there is demand.”
‘Scramble for properties’
Some experts say that, with demand for these cut-price homes likely to exceed supply, the initiative could spark a “scramble” for properties and exacerbate the current house-price boom.
With the property website Rightmove putting the current average asking price for first-time buyers in Great Britain at £205,925, some buyers using the scheme could save over £100,000.
However, Rightmove’s director of property data, Tim Bannister, said: “There’s likely to be a scramble for properties under this scheme as they become available, especially as we’ve already seen an influx of first-time buyers enter the market recently, helped by more lower-deposit mortgages being available.”
Image: fizkes/Shutterstock
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