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Jenrick unveils plans for ‘First Homes’ with £100,000 discounts
Housing secretary Robert Jenrick has unveiled plans for a ‘First Homes’ scheme offering first-time buyers new homes at prices discounted by a third.
The scheme will be aimed primarily at veterans or key workers such as nurses, police officers and firefighters from the local area, the government said.
Buyers will save an average of nearly £100,000, meaning lower deposits and mortgage requirements. The discounts will also be locked into homes and apply to future sales.
The discount would be paid for through Section 106 planning contributions from developers, which are usually used to fund affordable housing.
The government has said in its consultation paper accompanying the announcement that it is "mindful of the trade-off between the level of ambition for First Homes, funded through developer contributions, and the supply of other affordable housing tenures."
Inside Housing is currently assessing what impact this could have on section 106 contributions to affordable housing schemes.
Polly Neate, chief executive of housing charity Shelter, warned that the initiative “simply shuffled the deck chairs on the Titanic” and claimed it would put new social housing “at risk”.
The government suggested “tens of thousands” of First Homes could be built but did not specify an exact number.
When First Homes was announced by the Conservatives ahead of the December general election, the party claimed that the discount could apply to only 19,000 homes by the mid-2020s. More than 240,000 new homes were built in 2018/19.
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A consultation on how the scheme will be delivered has been published, including proposals aimed at releasing land for the homes.
Mr Jenrick said: “First Homes will be genuinely life-changing for people all over the country looking to buy their first home.
“I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. A proportion of new homes will be made available at a 30% market discount rate – turning the dial on the dream of homeownership.
“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.”
Ministers are proposing a price cap on homes available through the scheme like that imposed on Help to Buy.
Armed Forces veterans will not have to meet any local eligibility criteria.
The average new build home in England costs £314,000, meaning that through First Homes buyers would save £94,000 and need to save £18,000 less for a 20% deposit.
English Housing Survey figures published last month showed that homeownership among people aged 25 to 34 was 41.2% in 2018/19, up from 37.6% in 2013/14.
The First Homes scheme appears to be modelled on former prime minister David Cameron’s Starter Homes policy – which was ditched in 2017 under Theresa May with £174m spent and not a single home built.
Paula Higgins, chief executive of the Homeowners Alliance, said first-time buyers “will welcome the opportunity to buy a good quality home at a discount in their local area”.
Inside Housing Development Summit 2020
Inside Housing is pleased to join forces with Homes England and the LGA to introduce the Inside Housing Development Summit.
Taking place on 27-28 April 2020, the summit will gather together local authorities, housing associations, developers, fund managers and advisors for a Chatham House style event focussed on making new connections and exploring new delivery models.
The summit will take place over 28 hours, starting with an afternoon plenary on 27 April, an exclusive development site study tour to Northstowe, England's largest new town since Milton Keynes, followed by a business dinner.
The second day will provide opportunities to network with a range of senior Homes England and LGA staff including Nick Walkley, chief executive of Homes England and Mark Lloyd, chief executive of LGA.
You’ll also meet with leaders from across the development ecosystem and take part in group discussions to help you connect and explore new opportunities. All accommodation and meals will be provided within the fee.
Places for each stakeholder group are limited to ensure a balanced mix of participants and to make sure you leave with the relationships and leads you need.
Click here to book your place or for more information
