A new government scheme launched today to help first-time buyers and could save them at least 30 per cent off a property price. Here’s what we know so far…
The government has just announced its new First Homes scheme which launched on 4 June in the East Midlands. The scheme offers buying discounts for local people and key workers such as NHS staff and veterans. It is aimed at first-time buyers and intended to help them get onto the property ladder by offering homes at around 30 per cent or more discount.
The percentage saved will be passed on with the sale of the property to future first-time buyers. The homes will always be sold below market value so that local communities and key workers will benefit in future generations.
Further sites across the UK
The scheme has been launched in the Bolsover area of East Midlands, but the government’s website says that around 1500 further sites will launch across the country in the coming weeks. It predicts at least 10,000 homes a year being delivered in years ahead.
Housing secretary Robert Jenrick says: ‘Enabling more people to buy their own homes is at the heart of the mission of this government, and First Homes will offer a realistic and affordable route into home ownership for even more people who want to own their own home.’
The scheme is part of the government’s wider pledge to make one million new affordable homes. The government predicts that first-time buyers will save an average of £70,000 through the scheme.
Support from lenders
First Homes looks set to attract support from key lenders. Halifax and Nationwide have said they will offer high loan-to-value mortgages against First Homes to help with the roll out of the scheme.
Local councils will be able to set a local connection test to determine who can be prioritised for the scheme based on the needs of their communities. You must be a first-time buyer to apply and can only be eligible if you cannot afford a mortgage without the scheme.
Some property experts have said the scheme could result in demand for the discounted homes outstripping supply and could lead to a scramble for properties. The housing market is already busy, with property prices rising by 10.9 per cent in the 12 months to May 2021 according to Nationwide.
MB Associates’ Sales Manager & Senior Mortgage Adviser Phil Leivesley says: ‘I’m generally in favour of schemes that enable key workers to be able to live in the communities they serve without being priced out, providing this doesn’t have distorting effects on the wider housing market. We welcome initiatives that help people, and whilst the proof will be in the pudding, it’s encouraging that there is some thought going into creating solutions.’
For more information on the scheme, visit the government’s Own Your Home website. This provides a gateway to the various types of home ownership schemes available and helps you find the right one for you.