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Consumer group concerned over 30% cut price First Home scheme

The HomeOwners Alliance, a leading property consumer group, has now suggested it has some concerns about the government’s First Homes scheme.

This is the measure under which local first time buyers may receive a discount of 30 per cent on the market price of new homes built for the scheme.

When details were announced on Friday, the official press release from the Ministry of Housing, Communities and Local Government included a statement from the HOA, welcoming the scheme.


Paula Higgins, chief executive of the Homeowners Alliance, was quoted by the MHCLG as saying: “We know that first-time buyers will welcome the opportunity to buy a good quality home at a discount in their local area. We look forward to contributing to the consultation and working with the government to ensure that the scheme does what it says on the tin - more high quality and affordable local homes for current and future first-time buyers.”

However, the HOA has now had at least a partial re-think having had more time to assess how the initiative will operate.

The association says that it now realises there is no ’new money’ for the scheme and instead the 30 per cent discount will be funded only through a re-allocation of existing developer payments; until now those payments have gone to Section 106 deals for affordable homes and local infrastructure allied to new full-price housing estates.

The HOA has now written to the media to clarify its position.

Paula Higgins says in the letter: “The devil is always in the detail. We congratulate the government on taking action to tackle the affordable housing crisis. Their First Homes initiative will entitle local first-time buyers, with a welcome focus on key workers, to 30 per cent off the price of a new build home, funded by developer contributions. 

“But these are the same contributions that currently fund affordable rent schemes in London and that’s not right. This new scheme should tackle supply and affordability, but it must not come at the expense of affordable homes for lower income families.

“There is also the sticky problem of what does ‘local’ mean in London. Will those that move to the capital for work not be considered ‘local’? As First Homes will be delivered by councils and by a site by site basis, will this mean Londoners will need to identify themselves as Haringeyers or Streathamens?

“And let’s avoid First Home prisoners – owners desperate to move because of growing families and changing circumstances but who end up stuck because having passed their discount onto their buyer, they find themselves unable to afford the next step on the ladder. We need to avoid unintended consequences of government intervention.”  


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