Get Ready to Claim a 30% Discount - First Time Buyers

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.

geraldbowers@thegoodea.co.uk

The Good Estate Agent – North Nottinghamshire
Tel: 01777 237310 or 07981 744003

https://www.facebook.com/thegoodestateagentnorthnottinghamshire