THE government has launched its new first time buyers scheme today – but just 12 homes are up for grabs so far.
The scheme, which was first revealed by Boris Johnson as part of an affordable housing plan last year, gives buyers up to 50% off a new build home.
Housing Secretary Robert Jenrick hopes to be able to put 1,500 homes up by the end of the year, with developers forking out the upfront costs.
But the initial pilot today will see a rush for just 12 homes in Bolsover.
The scheme aims to help more young Brits get onto the property ladder as house prices continue to soar – putting it out of reach for many.
The Prime Minister first revealed the scheme as part of a wider affordable housing plan announced in June last year.
The discounted homes will be sold to local people who want to stay in the community where they live or work, but are struggling to buy a home at market prices.
It is estimated that Brits will save an average of £100,000 off their home.
The government has since been consulting on exactly what the First Homes scheme will look like, and has now revealed its final plans.
Here’s everything you need to know about the scheme.
What is the First Homes scheme?
New flats and houses in England built under the First Home scheme can be bought by first time buyers for at least 30% less than market value, and potentially up to 50% off in some cases.
The minimum discount eligible Brits will get off their homes will be 30%.
However, the government has now announced it’s possible that the discount could be as high as 50% off.
This is because local authorities will be able to choose whether to increase the discount placed on First Homes.
But they’ll have to prove the steeper discount is needed – so you’ll only be able to get the maximum discount in some cases.
There is also a cap on the price of these houses – after the discount has been applied, you won’t be paying more than £250,000 for your home, or £420,000 if you live in London.
But this price cap could be even lower, depending on whether your local authority chooses to lower it.
Only first-time buyers can purchase a home under the First Home scheme and it’s not available in Wales or Scotland.
As the scheme is aimed at helping buyers on lower incomes get on the property ladder, you won’t be eligible if your combined household income is over £80,000, or £90,000 if you live in London.
Those who can afford to buy one of the homes without a mortgage will not qualify for the help.
Buyers must use a mortgage for at least 50% of the price of the discounted home.
However, further conditions can be set by local councils so the eligibility criteria may vary depending on where you’re looking to buy.
For example, some authorities may give key workers first dibs.
But after the first three months of the homes going on sale, extra conditions set by the local authority will be removed for any First Homes which haven’t been sold or reserved.
When will the scheme launch?
The scheme was scheduled to launch on June 28, 2021, but 12 homes have gone up for sale today as part of a pilot in Bolsover.
As the homes need to be built first, it is expected more First Homes will be available for sale from 2022.
How do I apply?
There’s no national website or portal you can use to apply for a First Home.
Instead, you’ll need to do your research, and see which developers are taking part in the scheme.
If there’s a housing development being built near you and it’s offering discounted First Homes, then you’ll need to apply for a home through the developer.
It might be worth checking out which first time buyer events are being hosted around your local area.
There are websites that can help you search for affordable homes too, such as HomeHunt.
Simply type in the postcode you’re hunting in into the site’s search engine to see what properties are available.
There’s no deadline to hit to apply for a First Home – it is open wherever plots are available.
What happens if I want to sell my First Home?
Properties bought under the scheme will have to be sold to first-time buyers who are also eligible for the help.
This will make sure there are enough homes available under the scheme to help first time buyers purchase a property.
But it means you’ll need to sell it with the same discount you bought it for.
For example, if you bought it for 30% off market value, you’ll also need to sell it for 30% off what it is now worth.
It also means there is a risk that if the property value goes down, you could end up selling it for less than what you bought it for.
Will the scheme be helpful?
Property advice company Propertymark chief executive said the First Homes plan is a “creative initiative” and one that could “really work”.
However, he warned that the scheme could push rocketing house prices up even further.
“We have a very busy market right now, full of hungry buyers, and there is a danger that introducing more buyers without increasing supply could further push the supply and demand out of balance, meaning house prices would continue to rise,” he said.
While Trussle head of mortgages warned first time buyers that they will still need to secure a home loan to buy a First Home.
“Rising house prices, a lack of affordable housing, and high deposit requirements can make it difficult for many first-time buyers to own their own home,” he said.
“While the First Home scheme will make home ownership a possibility for many first-time buyers, it’s important to bear in mind that a mortgage will need to be obtained to finance the purchase.”
Here’s how one first time buyer got a 20% discount off her new home aged just 24.
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