Discounted houses will be available to first-time buyers for almost a third off the market price under a new government scheme that launches today.
According to MHCLG, the First Homes scheme will help local first-time buyers – including key workers – onto the property ladder by offering homes at a discount of at least 30% compared to the market price.
That same percentage will then be passed on with the sale of the property to future first-time buyers, meaning homes will always be sold below market value – benefitting local communities, key workers, and families for generations to come.
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 new scheme is part of the government's ambition to build one million new affordable homes during this parliament with the first properties under the scheme available on the market from today as part of the first phase of an early delivery project in the Bolsover district. More sites set to launch across the country in the coming weeks.
A further 1,500 will enter the market from the autumn, with at least 10,000 homes a year being delivered in the years ahead - and more if there is demand, according to officials.
Major 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.
This latest government initiative follows on from the 95% mortgage guarantee scheme which helps first-time buyers secure a mortgage with just a 5% deposit and the government’s ‘Own Your Home’ campaign showcasing the range of flexible home ownership options available.
Housing Secretary Robert Jenrick said: “Thanks to First Homes, we will offer more homes to local people and families, providing a route for first-time buyers to stay in their local areas rather than being forced out due to rising prices.
“First Homes will also support our fantastic key workers who are looking to get their first foot on the housing ladder – from front-line doctors and nurses to delivery drivers and supermarket staff – by giving many of them the chance to buy a home at a 30% discount.
“These homes will be locked in for perpetuity to first-time buyers and key workers from their local area – making them an asset to both their owners and the wider local community.”
David Postings, CEO of UK Finance, comments: "Key workers have kept the country running during the pandemic and we are committed to doing what we can to help them, and other local first-time buyers across England, to realise their dreams of owning their own homes.
"Our commitment is shared across all necessary stakeholders, as underscored by the high level of co-operation between lenders, government, local authorities and developers in helping drive the First Homes scheme forward.
Robin Fieth, Chief Executive of the Building Societies Association, said: "Building societies have always been dedicated to bringing homeownership within reach for as many people as possible, which is why we are working with the sector to help bring forward mortgages for First Homes as soon as possible.
"Building societies, both large and small, are pleased to be among the first lenders to offer mortgages in support of this new product."
Tim Bannister, Rightmove’s Director of Property Data, warned: “There’s likely to be a scramble for properties under this scheme as they become available, especially as we’ve already seen an influx of first-time buyers enter the market recently, helped by more lower deposit mortgages being available.
"The scheme could help level up the playing field for buyers in areas where there’s strong competition between first-time buyers and buy-to-let investors and could help some people bring their plans forward or buy a bigger home than they were originally expecting to. Based on currently available stock levels it’s unlikely there will be enough of these properties to satisfy the high levels of demand, so eligible buyers will need to get in quick to have the best chance of securing one.”
Mark Hayward, Chief Policy Adviser, Propertymark, adds: “Propertymark is pleased to see a further focus on homeownership with the news of the first properties to be made available under the First Homes scheme, together with the flexible home ownership options through the launch of the Own Your Home initiative.
"It is good to see these creative initiatives at this crucial time, one where our members are actively dealing with a very busy market right now, full of hungry buyers. In welcoming this move we also reiterate our concern that introducing more buyers without increasing supply could further push the supply and demand out of balance, further fuelling the spiral in house prices.”
“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. 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 downsizing and releasing family homes.”