First Homes will see a discount locked into the property to ensure more first-time buyers benefit in years to come.
A new generation of homeowners will be able to take their first step on to the housing ladder thanks to a scheme cutting the cost of some new homes by a third, Housing Secretary Robert Jenrick has been announced.
First Homes will see a discount locked into the property to ensure more first-time buyers benefit in years to come. Local people unable to afford a home will be able to buy in their area, rather than be forced to look elsewhere by rising prices.
The scheme will lower deposit and mortgage requirements for local first-time buyers in England — shaking up the housing market and making the dream of home ownership a reality. The discount will apply to a proportion of new homes, with the government consulting on how this will be delivered.
Veterans will be prioritised as part of the 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.
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.
The average newly-built home in Cornwall costs £246,000, meaning a 30% discount delivers a saving worth more than £73,000. Areas with particular affordability pressures will see even greater savings with a 30% discount.
Commitment to new homes
The Government is committed to delivering more than one million new homes over the next five years to further improve the affordability of housing.
The proposals published, which could see tens of thousands of First Homes being built, include measures to help release more land.
More than 240,000 new homes were delivered in 2018-19 — more new homes than at any point in the last 30 years.
And the latest figures show more than 250,000 energy performance certificates being issued to new homes in 2019 — the highest number ever, suggesting further progress being made.
The latest figures show the number of first-time buyers reaching 357,090 — an 11-year annual high and an increase of 84% since 2010 — and the percentage of home owning 25 to 34-year-olds has grown from 36% to 41% over the last five years.
Paula Higgins, Chief Executive of the Homeowners Alliance, said: “We know that first-time buyers will welcome the opportunity to buy a good quality home at a discount in their local area.
“We look forward to contributing to the consultation and working with the Government to ensure that the scheme does what it says on the tin — more high quality and affordable local homes for current and future first-time buyers.”
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.
Creating a mix of homes
Responding to the Government’s consultation on its First Homes scheme, Cllr David Renard, housing spokesman at the Local Government Association, said: “Councils support measures to enable home ownership. It is important that this does not come at the expense of providing truly affordable homes for rent.
“Not everybody is ready to buy and we will be making the case in this consultation that local areas will need discretion on the number of First Homes required in new developments. This will allow councils to ensure a mix of homes — to rent and buy — are available and affordable to people that need them.
“A genuine renaissance in council housebuilding would increase housing supply, boost home ownership and reduce homelessness. The last time this country built homes at the scale that we need now was in the 1970s when councils built more than 40% of them. Councils were trusted to get on and build homes that their communities needed, and they delivered, and they can do so again.
“For that to happen, the Government needs to use the forthcoming Budget to reform Right to Buy, by allowing councils to keep receipts of homes sold under RTB in full and to have the flexibility to set discounts locally.”
Header image ©Tony Baggett/AdobeStock.
