The government has announced the First Homes scheme in England, which will likely improve home ownership for first-time buyers.
Christopher Pincher, the Minister of State for Housing, recently announced the First Homes schemes. This is another part of the government’s commitment to supporting homeowning, especially for first-time buyers.
In England, new houses and flats built under the First Homes initiative will be available to eligible first-time buyers. The properties will be at least 30% less than market value. In some cases, the discount may even reach up to 50% off.
Many professionals in the property industry have welcomed the news. Nathan Emerson, Propertymark‘s interim CEO, says: “First Homes is a creative initiative and one that can really work because you are not just introducing more buyers, you are also giving them a home to buy.
“That is key because we have a very busy market right now, full of hungry buyers, and there is a danger that introducing more buyers without increasing supply could further push the supply and demand out of balance, meaning house prices would continue to rise.”
First Homes requirements and eligibility
The First Homes scheme will prioritise first-time buyers whose household income doesn’t exceed £80,000 (£90,000 in Greater London). Local authorities will decide on the specific eligibility and discounts available.
After the discount is applied to the property, the first sale must be marketed at £250,000 or less. In Greater London, this should be at £420,000 or less. Properties bought under the scheme will also then be sold to eligible first-time buyers with the same percentage of discount it was purchased at.
Buyers who can afford to buy a property under the scheme without a mortgage will not qualify. Homes bought under the scheme are also intended to be used as a person’s primary or sole residence. However, if the local authority is notified, owners could rent out the property for a maximum of two years.
Boosting home ownership and homebuilding
Under this initiative, a minimum of 25% of all affordable housing units through developer contributions should be First Homes. Local plans and neighbourhood plans will start taking this into account from 28th June.
The First Homes scheme will not only help more first-time buyers get on the property ladder. It was also likely further improve confidence in the homebuilding sector and increase demand for new-builds.
“It’s clear that the UK Government recognise the importance of homeownership, looking forward we want to see a further expansion of measures to support the market as a whole,” Nathan Emerson comments.
“Coupled with planning reforms to make building easier and create more homes, the UK Government should now look to incorporate initiatives to encourage and support older generations to downsize and release family homes.”