Since 2010 over 644,000 households have been helped to buy a home through the Government’s Help to Buy and Right to Buy Schemes and to continue this progress the Government launched a consultation on the First Homes scheme. This scheme allows first time buyers to buy a home in their local area for a 30% discount on the open market price which could save them around £100,00 on the price of an average new build property in England.
On the 6th August, the Government published the outcome of the consultation. The consultation initially ran for eight weeks from the 7th February but due to Covid-19 was subsequently extended for a further 4 weeks, closing on 1st May 2020. Full details of the response can be found here.
What are First Homes and how does the Scheme work?
- First Homes are flats and houses built on developments throughout England. They are no different to any other properties except they will be sold with a discount of at least 30%.
- Local planning authorities can set larger discounts of 40% or 50% to ensure local people can afford the homes
- They will be sold to local people who want to stay in the community where they live or work but are struggling to purchase property at market value.
- Priority will be given to first-time buyers, serving members and veterans of the Armed Forces and key workers such as nurses, police and teachers.
- When owners of First Homes decide to move up the ladder, the discount will be passed on to future buyers. The home will be independently valued and the discount of at least 30% will be applied to the new value to ensure more people can be helped onto the property ladder. This means that First Homes will always be sold below market price and will benefit local communities and generations to come.
Price caps, income caps and eligibility criteria – what you should know
- If an eligible local buyer cannot be found who fits the local connection criteria, after a period of 3 months the property will become available to all first-time buyers with the 30% discount.
- Regional price caps will apply after the discount has been applied as follows: £420,000 in London and £250,000 elsewhere. Household income caps are also applied in London of £90,000 and £80,000 elsewhere. Local Planning authorities can set lower caps for the first three months depending on the local need.
- Restrictions on letting First Homes: First Homes should NOT be used as an investment opportunity. The house should be the buyer’s sole residence although there may be times when the owner may need to let out their property for short periods of time up to two years. The Local Planning Authority will need to be informed and permission requested if the period is longer than two years. Circumstances could include:
- Short job posting elsewhere
- Deployment elsewhere (Armed Forces)
- Relationship breakdown
- Fleeing domestic violence
- Care for a relative/friend
Details on how to apply for the scheme will be available in due course and we will be updating our website with any further information as soon as it is available.
Should you have any queries regarding buying a property, please call our team on 01926 491181.