First Home schemes, according to government, will help local people buy their first home. The new First Home scheme will be targeted at key workers to buy their first time buyer house. This is a new first time buying scheme. As the scheme suggests it will be aimed at local first time buyers.
We first wrote this article in December 2019, however it has been updated. The First Homes Scheme was launched as of 4th June 2021, with the first properties being in Bolsover.
First Home scheme offering at least 30% discounts for local buyers
It is early days yet to say what the criteria is for such a home. However it looks like there could be a 30% discount for such properties. We don’t yet know if it will just be for new build homes or whether it will be extended to all homes. If it is the latter there will need to be detailed ironed out to say how a property for sale can be classed as being available via the First Home scheme.
There has been an issue, particularly in sought after locations whereby local people have struggled to buy their first home. This is due to rising prices and the fact that they were being purchased as second homes or buy to let opportunities.
What is the criteria for the new First Home scheme?
The criteria has been clarified and it looks like First Homes will be for first-time buyers only, with councils able to prioritise them for local people and for key workers.
The then housing secretary Robert Jenrick said that “First Homes will also support our fantastic key workers who are looking to get their first foot on the housing ladder. From front-line doctors and nurses to delivery drivers and supermarket staff . By giving many of them the chance to buy a home at a 30% discount”
Further detail needed to see how it differs from other First Home schemes
It also appears that some of the detail around the scheme says that should a local person buy the home they cannot sell it on at a profit to a non-local person. First Homes will make a proportion of new homes available with a minimum 30% discount on the open market value. This will be passed on with the sale of the property to future first-time buyers. This means homes will always be sold below market value and local communities will benefit for generations to come. Therefore, the aim is to be able to sell on these homes to people also in the local area.
Jenrick also stated that “Thanks to First Homes, we will offer more homes to local people and families, providing a route for first-time buyers to stay in their local areas rather than being forced out due to rising prices.”
First home schemes, what else is there?
There is already help to buy which is a first time buying scheme too. This has been around a lot longer, however it is due to finish in 2023 unless the government changes it’s mind.
Likewise another first time buying scheme is shared ownership. This is where you part buy part rent your home.
We cover this off in our help to buy vs shared ownership article.
Review the current planning process to build First Home scheme properties
If the new First Home scheme is for new build properties only they may need to review the current planning laws. This will enable the homes to be built quicker if they can streamline the planning process.
So it could be that the First Home scheme will be another option. It could sit nicely alongside shared ownership and the help to buy scheme that already exist.