Last week, it was confirmed that a new Government scheme has been proposed to help more first-time buyers purchase properties in their local area. The First Homes Scheme will see new-build properties reduced by at least 30% of the market price. They will be prioritised for first-time buyers, serving members and veterans of the Armed Forces, as well as key workers, such as nurses, police and teachers.
Why launch the First Homes Scheme?
Despite the fact first-time buyer sales are at their highest in a long time, it remains difficult for those wanting to buy their first home. Many people are stuck paying sky-high rents, struggling to save for the initial deposit. There’s a shortage of affordable housing. And most importantly, first-time buyers are struggling to find affordable properties within their local community. Rising prices are forcing many to move away from the area where they live or work. The First Homes Scheme will be a huge help to many across the country, who are looking to buy their first home, in the place where they live.
How the scheme will work
Properties within the scheme will include flats and houses on developments across the country. These properties will be sold with a discount of at least thirty per cent. This will see a lower deposit and mortgage, saving eligible buyers of local homes around a third. If you consider the average price of a new build home is £314,000, savings will be in the region of £100,000. And moving forward, the scheme will continue to apply the discount as the property changes hands. First-time buyers may decide to sell their home in the scheme, to move up the ladder. When this happens, the property will firstly be independently valued. Then when they sell the home, the discount will be passed on to the new buyer, against the new property value.
A welcome benefit to communities
The scheme will benefit communities as much as the first-time buyers themselves. Enabling key workers to stay and live within the community in which they work, will help communities to prosper and flourish. As Housing Secretary, Robert Jenrick says of the Scheme, “The discount will be passed on with the sale of the property to future first-time buyers, helping thousands more people in years to come and ensuring local communities can stick together.” There’s another crucial point about the Scheme, which holds relevance to communities. And that’s the fact that First Homes will not be allowed to be bought as holiday homes or buy to lets. They are homes for people to live in. News of the scheme is very much well received as many welcome the opportunity to buy a good quality home at an affordable price in their local area.
Other Government plans
As well as the Scheme itself, the Government proposals also outline the building of new First Homes, with measures to help release more land to build them. There is also due to be consultation on a new national model for shared ownership. This will see the reduction in the initial share that has to be bought, enabling buyers to take further steps in smaller increments.
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