First-time buyers First Homes initiative

The Government’s new First Homes initiative could save first-time buyers in England £100,000 or more. The government says the scheme is aimed at first-time buyers in the area where the homes are built, many of whom will be key workers such as NHS staff and those on the pandemic frontline such as delivery drivers and supermarket staff.

It is aimed at helping them get 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 bigger discount – either 40% or 50% – if they can demonstrate a need for this.

SUPPORTING LOCAL PEOPLE
Crucially, 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, thereby ‘benefiting local communities, keyworkers and families for generations to come,’ the government said. ‘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,’ the Ministry of Housing said.

FOR FIRST-TIME BUYERS ONLY
First Homes is the latest initiative aimed at tackling the challenges of helping people get on the property ladder and follows a government guarantee scheme for 95% mortgages. The First Homes scheme is for first-time buyers only; households with a combined annual income of more than £80,000 – or £90,000 in Greater London – cannot apply. Local councils will be able to bring in their own requirements, such as prioritising key workers or local people.

IMPOSING LOWER PRICE CAPS
There are also price caps – after the discount has been applied, the purchaser cannot be required to pay more than £250,000, or £420,000 in Greater London. However, councils will be able to make the case for imposing lower price caps. The initial First Homes properties have gone on the market as part of the opening phase of an early delivery project in Bolsover, Derbyshire. More new homes will be offered to first-time buyers under the scheme across the country in the coming weeks and months.

HOMES PURELY AS AN INVESTMENT
The government said it would be funding a further 1,500 homes, which will come onto the market from the autumn, and plans to have ‘at least 10,000 homes a year being delivered in the years ahead, and more if there is demand.’ 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.

REALISTIC AND AFFORDABLE ROUTE
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.’

HIGH-STREET LENDERS
Halifax and Nationwide Building Society, along with local building societies and community lenders, announced that they will be offering high loan-to-value mortgages against first homes to support the roll-out of the scheme.