Housing Secretary Robert Jenrick has confirmed that the First Homes scheme will provide newly built homes at a 30 per cent discount for first time buyers, local people and key workers.
Confirmation of the initiative, first announced back in February, came in the lengthy and controversial planning reform proposals outlined by Jenrick this week.
“First Homes will be life-changing for people all over the country aspiring to take their first step on to the housing ladder” he says, adding that the discount should be “at least” 30 per cent.
The discount will be ‘attached’ to the specific properties in perpetuity, ensuring future buyers can continue to benefit from it.
“When owners of First Homes decide to move up the housing ladder, their home will be independently valued, When they sell the home, the discount will be passed on to the new buyer with the discount (of at least 30 per cent) attached to the new value” says a guide to the scheme issued by the Ministry of Housing, Communities and Local Government.
It continues: “First Homes are for people to live in so we won’t allow them to be used as holiday homes or as buy to lets. These are for local people to take their first step on to the ladder.”
The ministry says that slashing the cost of the necessary deposit – an example given concerns a £246,000 property having more than £18,000 cut from a 20 per cent deposit – will mean young people will not be forced to move away from their home towns when searching for an affordable property.
Armed forces veterans will be given priority under the scheme, and councils will be encouraged to allow front-line workers, such as teachers, nurses, prison officers and police, to be prioritised too.
The government says that the scheme will be funded through contributions that housing developers routinely provide through the planning system, which means that there will be no extra building costs.
However, there’s still no specific timescale to the arrival of the initial First Homes with the MHCLG saying more information should be available “later this year.”