An Introduction to the First Homes Initiative
The First Homes Initiative is a new scheme backed by the government which it is hoped will assist first-time buyers to secure their first property. The scheme offers a minimum discount of 30%, which could go up to 50% depending on the need in the area, on a new-build home. The scheme should deliver around 10,000 first homes each year and is aimed at assisting those who might otherwise be priced out of their area to purchase a home there.
How Does the First Homes Initiative work?
The scheme will make new-build homes (houses and flats) in certain areas available to local people to purchase at a minimum of 30% discount from market value. Local councils will have delegated to them the option of allocating an additional discount up to 50% if they deem it necessary. This means that a home worth £250,000 could be sold under the scheme for £125,000. Local councils will prioritise who may get a first home through the scheme and will set their own eligibility tests to narrow down who should be considered for the scheme based on the needs of the wider community.
Anyone who is a first-time buyer and has an annual household income of £80,000 or less (£90,000 in Greater London) is eligible. You must have funding in place for at least 50% of the purchase price. The property itself will not be more than £250,000 after the discount has been applied, or £420,000 maximum in Greater London. Full details of eligibility criteria can be found at https://www.gov.uk/guidance/first-homes.
How Do I Apply?
The initiative is only running in the Bolsover district in the East Midlands, as it is in its first phase. It is hoped that the scheme will be rolled out into other areas of the country, and if there is high enough demand, the end goal is for 10,000 first homes to be available each year. If you are thinking about purchasing a property, whether through this initiative or not, be sure to get appropriate advice and guidance from a conveyancer such as Sam Conveyancing. Any conveyancer you choose may also be able to provide online conveyancing, which may save you time and make the process move along more smoothly.
Will It Be Successful?
Whilst the benefits of the scheme are apparent, there are potential issues, such as the chance that house prices could be pushed up and price more people out of the area. There are also questions about how the properties will be valued and what approach mortgage lenders will take to the scheme. The scheme will be monitored as it is rolled out in other areas.