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Rightmove : First Homes scheme offers discounted properties to local first-time buyers

06/04/2021 | 07:39am EDT

In comments exclusive to Rightmove, the Secretary of State for Housing, Communities and Local Government Robert Jenrick introduces the government's new scheme to help first-time buyers on to the property ladder

Saving for a deposit is one of the biggest barriers to buying a first home and can easily make getting onto the property ladder feel out of reach.

Recently the government launched the 95% mortgage guarantee scheme to help buyers with smaller deposits.

This week, the government has introduced another new initiative in England called 'First Homes', which aims to help local first-time buyers and key workers onto the housing ladder with discounts of up to 50% on new-build homes.

The first properties being sold under the scheme went on the market this week in Bolsover, Derbyshire, with the Housing Secretary in attendance.

Further sites are set to launch across the country in the coming weeks, with 1,500 due to enter the market from the autumn. The government says at least 10,000 homes a year will be delivered in the years ahead, and more if there is demand.

As the First Homes scheme launches this week, we've asked Housing Secretary Robert Jenrick to tell us how it works.

What is the First Homes scheme?

Robert Jenrick says the government's new First Homes scheme 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.

He explains: 'The scheme will help by offering homes at a discount of at least 30% compared to the market price.

'The same percentage will then be passed on with the sale of the property to future first-time buyers. Many of these buyers will be 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 - and this could give them the chance to buy a discounted home.'

Passing on the discount to future buyers protects these homes from being sold on at an inflated value if asking prices rise in the local area. For example, those buying a home with a 30% discount will also be required to sell it for 30% off the market value at that time. Some councils will be able to make a case for a bigger initial discount of up to 50% if needed.

Our property expert Tim Bannister says: 'We're seeing a lot of first-time buyers entering the market at the moment, now that there are more lower deposit mortgages available, so there's likely to be a scramble for properties being sold under this scheme.

'If you are eligible to buy a home under this scheme and you find one in your local area, you'll need to act quickly to have the best chance of securing one.'

What other help is there for first-time buyers?

Jenrick says First Homes is of several schemes that can make a real difference if you're looking to buy your first home.

'Our 95% mortgage guarantee scheme can help you get on the ladder without the need for a large prohibitive deposit.

'The Shared Ownership scheme offers you the chance to buy a share of your home if you can't quite afford the mortgage on 100% of the home.'

'We have launched our 'Own Your Home' campaign which showcases the wide range of Government support schemes into home ownership,' he says.

To find out which scheme might work for you, visit ownyourhome.gov.uk.

First Homes: key things to know
  • Local authorities will prioritise key workers or those who pass the 'local connection' test. This takes into account where you live and work, family connections nearby and special circumstances, for example if you are a carer.
  • Any First Homes which haven't been sold or reserved three months after going on sale will then be offered to other local interested buyers.
  • You will not be eligible for the scheme if you have a combined household income of more than £80,000, or £90,000 if you live in London.
  • You will need to use a mortgage to cover the cost of at least 50% of the price of the discounted home.
  • If you can afford to buy one of the homes with the discount and your savings, you also won't qualify.
  • The scheme does not apply in Wales, Scotland or Northern Ireland
How much will the homes cost?

There will be a cap on the price of homes sold under the First Homes scheme. Outside London, you won't pay more than £250,000, although this could be lower in some local authority areas. In London, properties will be capped at £420,000.

When you're ready to move on, the property will need to be sold at the equivalent discount off the market value that you bought it for. However, the price caps will no longer apply.

How can you apply?

You don't need to formally register. Keep an eye out for new-build developments in your area and check if local developers are in the scheme. As the roll-out continues and more properties become available, you will be able to find these listings on Rightmove. You can also visit the Help to Buy website.

READ MORE:How the 95% mortgage guarantee scheme works

Disclaimer

Rightmove plc published this content on 04 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 June 2021 11:38:05 UTC.


© Publicnow 2021
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