Housing Secretary Robert Jenrick has announced consultation on a new scheme that would see 30% discounts on new homes being made available for local first-time buyers.
First Homes acknowledges the difficulties for first-time buyers. It also acknowledges the increased likelihood of local communities supporting new developments if they are seen to benefit local people.
It is proposed that homes made available exclusively to local first-time buyers should be offered at a 30% discount on the local market price. The discount would apply to the property in perpetuity – so when the original purchaser sells, the property is again made available at a 30% discount on the current market valuation.
An example house, on the market for £300k would receive a discount of 30 per cent, meaning the First Home buyer pays only £210k. When the owner is looking to sell, the new value of their home may be £350k. This is allocated to a new first-time buyer or prioritised worker by the local authority and is sold with a 30% discount at £245k.
A variety of options for funding the scheme is set out in the consultation: an obligation on developers is one so is a proposed extension to the entry level exception sites scheme announced in the NPPF 2018.
In announcing the consultation on 7 February, Robert Jenrick suggests that: “First Homes will be genuinely life-changing for people all over the country looking to buy their first home.”
HBF has welcomed the initiative: “First Homes could provide another route onto the housing ladder for a generation of would-be home owners who are struggling to access home ownership. We look forward to working with councils and other stakeholders to ensure the scheme is workable and attractive to home buyers.”
It is confirmed in this consultation document that first homes discounted in this way would not be eligible for the shared equity support in the Help To Buy scheme, so potentially this consultation starts to suggest what a successor to Help to Buy might look like.
There are still many questions over the detail of how the scheme would operate in practice and the Government is asking for input from interested parties by 3 April. The consultation can be viewed here.