First Homes is designed to help people in England to buy in their local area and means they will need a lower deposit and mortgage requirements.

Veterans will be prioritised as part of Armed Forces Covenant and councils will also be able to use the scheme for front-line workers in their area such as police, nurses, prison officers and teachers.

This scheme will apply the discount in perpetuity, so when the home is sold in years to come the new local buyer will be able to purchase it at a discount as well.

The discount will be paid for through the contributions that housing developers routinely provide through the planning system. The government says this means that the First Homes scheme will not result in extra building costs.

Only a proportion of new homes will benefit from the discount and the government is consulting on the finer details.

Housing Secretary Rt Hon Robert Jenrick MP said: “First Homes will be life-changing for people all over the country looking to buy their first home.

“I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. A proportion of new homes will be made available at a 30% market discount rate – turning the dial on the dream of home ownership.

“The discount will be passed on with the sale of the property to future first-time buyers, helping thousands more people in years to come and ensuring local communities can stick together.”

Average saving of £94,000

According to the government the average price of a newly-built home in England is £314,000. Under First Homes, a property sold with 30% off this price would deliver a £94,000 saving and take more than £18,000 off a 20% deposit.

As a regional example, the average newly-built home in Cornwall costs £246,000, meaning a 30% discount delivers a saving worth more than £73,000. Areas with particular affordability pressures will see even greater savings with a 30% discount.

Government housing commitment

The government is committed to delivering more than one million new homes over the next five years to further improve the affordability of housing.

These proposals could see tens of thousands of First Homes being built, including measures to help release more land.

More than 240,000 new homes were delivered in 2018-19 – more new homes than at any point in the last 30 years.

And the latest figures show more than 250,000 energy performance certificates being issued to new homes in 2019 – the highest number ever, suggesting further progress being made.

More first-time buyers

The number of first-time buyers reached 357,090 last year, an 11-year annual high and an increase of 84% since 2010 – and the percentage of home owning 25 to 34-year-olds has grown from 36% to 41% over the last 5 years.

Paula Higgins, chief executive of the Homeowners Alliance, said: “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.”

Jackie Bennett, director of mortgages at UK Finance, said: “Buying a home locally can be a big consideration for house buyers, but sometimes the prices are simply out-of-reach.

“So the First Homes scheme is a great initiative by the government to fix this problem and we are looking forward to working with them to finalise the details and help house hunters become home owners – in their own neighbourhood.”