First Homes will be life-changing for
people all over the country aspiring to take their first step onto the housing
ladder, by providing new homes at a discount of at least 30 percent’
This week the Minister for Housing
Christopher Pincher made a statement on the future plans for helping first time
buyers to purchase affordable housing. In the statement he discussed the new
‘First Homes’ scheme.
‘First Homes’ is a new initiative from
the government and a very interesting way of helping more people get onto the
housing ladder.
‘First Homes’ will be new builds. In
some instances these homes will be earmarked for military veterans and key
workers including teachers, police and others. Local authorities will have
powers to decide.
30% Discount
Buyers will be able to secure these new
build homes and take advantage of a minimum discount of 30% (Yes, you read that
correctly). Again the level of discount will be decided by local authorities.
PLUS the discount will exist in perpetuity, meaning that generations of first-time buyers will be helped. See example below.
The
scheme will start with a pilot of 1,500 houses and should be launched before
the end of 2021.
An Example:
Market Price £175,000
First Homes discount of 30%
First Home buyer pays £122,500
After a few years when the owner is
looking to sell, the new value of their home is say £225,000.
This is allocated to a new first time
buyer or prioritised worker by the local authority, and it is sold with a 30% discount
for £157,500.
What are First Homes?
• First Homes are flats and houses
built on developments up and down the country. They will be no different from
other properties except they will be sold with a discount of at least 30
percent.
• They will be sold to local people who
want to stay in the community where they live or work but are struggling to
purchase a home at market prices.
• They will be prioritised for
first-time buyers, serving members and veterans of the Armed Forces, and key
workers, such as nurses, police and teachers.
• The discount will be passed on to
future buyers when First Homes are resold so more people can be helped onto the
ladder.
How will it work?
• First Homes will be sold with a
minimum discount of 30 per cent off the market price, but local areas will be
able to set a larger discount to ensure the homes are affordable to local
people.
• Buyers will purchase First Homes in
the usual way and will have access to conventional mortgage products.
• When owners of First Homes decide to
move up the ladder, their home will be independently valued. When they sell the
home, the discount will be passed on to the new owner with the discount (of at
least 30%) applied to the new value.
• This means homes will always be sold
below market price and local communities will benefit for generations to come,
with local authorities continuing to allocate these homes to first-time buyers
and able to prioritise local workers.
• First Homes are for people to live
in, so they will not be used as holiday homes or as buy to lets. These
are for local people to take their first step onto the ladder.
When will I be able to buy a First
Homes property?
The government is working to deliver
First Homes as quickly as possible and currently consulting on the final design
of the First Homes scheme. Look out for further details.
Helping Generation Rent
This initiative is clearly aimed at the
lower or starter end of the property market with a real push to help getting
generation rent onto the property ladder.
It will only help if and when we start
to speed up the house building programme across the country.
There is a clear demand for first time
buyer properties. This is a brave move from the government but clearly
demonstrates how they are committed to helping people towards home ownership.
I'm here to help sellers, buyers, landlords, and tenants.
Call me or drop me a message if you think I might be able to help you.
The Good Estate Agent – North
Nottinghamshire
Tel: 01777 237310 or 07981 744003
https://www.facebook.com/thegoodestateagentnorthnottinghamshire
