The government launched the flagship initiative to provide homes at a discount of at least 30% compared to market price today. It announced a number of lenders would be offering mortgages for buyers taking advantage of First Homes.
NHS and veterans were among those being targeted by the scheme, which aims to encourage them to stay in the communities in which they live and work. It will act as remedy to the problem that many people currently struggle to afford the market value of homes in their own area.
The homes will remain in the scheme even when they are sold on, therefore the discount will be passed on with the sale to enable future first-time buyers to take advantage of the reduced price.
Today, the first ‘First Homes’ properties went on the market in Bolsover, East Midlands. Further sites are expected to launch in the coming weeks with a further 1,500 due to enter the market from the autumn.
The government said at least 10,000 homes a year would be delivered in the years ahead if there is enough demand.
High LTV mortgages
Lloyds and Nationwide Building Society, along with other local building societies and community lenders, have announced they will be offering high loan-to-value (LTV) mortgages against First Homes to support the roll-out of the scheme.
This morning both Newcastle Building Society and Leeds Building Society released statements announcing they would be supporting the scheme.
Andrew Haigh, chief executive at Newcastle Building Society, said: “Home ownership can often feel out of reach for first time buyers – especially those without access to the bank of mum and dad.
“We’re committed to delivering innovative ways to help first time buyers find affordable and sustainable ways to own their own home. We’re pleased to be one of the first lenders to support the scheme.”
Meanwhile, Richard Fearon, chief executive officer of Leeds Building Society said: “Supporting schemes like this is a way to reaffirm our support for first time buyers and other borrowers who are not well served by the wider market.
“Leeds Building Society helps these customers through a range of mortgages, from traditional high LTV (loan to value) lending to affordable housing initiatives such as Shared Ownership.
“We’ve experienced some of our busiest ever months for home purchase in 2020 and so far in 2021. Our purpose as a building society is to help people save and have the home they want, so I’m particularly proud that during 2020 we helped 8,000 first time buyers and continued to offer 95% LTV Shared Ownership mortgages throughout the pandemic.”
Delivery of the scheme is part of the Government’s wider pledge to build one million new affordable and attractive homes in this Parliament and help put home ownership within reach for people across the country.
First Homes has been launched as a follow on to the 95% mortgage guarantee scheme and along with the government’s ‘Own Your Home’ campaign showcasing the range of flexible home ownership options available.
The campaign highlights the support available to help make home ownership a realistic and affordable option for more people.
First-time buyers can find the right scheme for them via the Own Your Home website which provides a single gateway for all routes to home ownership.
Housing Secretary, Robert Jenrick MP, said: “Enabling more people to buy their own homes is at the heart of the mission of this government, and First Homes will offer a realistic and affordable route into home ownership for even more people who want to own their own home.
“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 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.
Councils will also be able to prioritise the homes for keyworkers such as nurses and teachers who have been looking to get on the housing ladder while supporting their community throughout the pandemic.
Each individual local authority can set a local connection test to determine who should be prioritised for the scheme based on the needs’ of their communities.
Robin Fieth, chief executive of the Building Societies Association, added: “Building societies have always been dedicated to bringing home ownership within reach for as many people as possible, which is why we are working with the sector to help bring forward mortgages for First Homes as soon as possible.
“Building societies, both large and small, are pleased to be among the first lenders to offer mortgages in support of this new product.”
