The first discounted homes went on sale today under the government’s First Homes scheme, which it says will help “local young people and key workers on to the housing ladder”.
The properties in Bolsover, Derbyshire, are on offer at least 30% below the market price to first-time buyers in the area.
The percentage saving will be passed on with the sale of the property to future FTBs, “meaning homes will always be sold below market value – benefitting local communities, key workers, and families for generations to come,” says the Ministry of Housing, Communities and Local Government.
It adds additional homes will come into this system across the country “in the coming weeks”.
A further 1,500 will enter the market from the autumn, “with at least 10,000 homes a year being delivered in the years ahead and more if there is demand,” says the department.
Lloyds and Nationwide Building Society, and a range of local building societies and community lenders, have pledged to offer high loan-to-value mortgages against First Homes properties.
Housing Secretary Robert Jenrick says: “Thanks to First Homes, we will offer more homes to local people and families, providing a route for FTBs 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.
“These homes will be locked in for perpetuity to FTBs and key workers from their local area – making them an asset to both their owners and the wider local community.”
Newcastle Building Society chief executive Andrew Haigh adds: “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 FTBs find affordable and sustainable ways to own their own home. We’re pleased to be one of the first lenders to support the scheme.”
However, critics warn that the initiative could undermine the supply of social rented homes as the proposals require developers to set aside a quarter of the affordable housing they are obliged to create as discounted homes to be sold under this scheme.
This could reduce the share of homes given to housing associations to provide social rented options for the poorest families who are unable to buy, some argue.
The housing department says its target is to build 300,000 new homes a year, as well as spending £12bn on affordable homes over the next five years.
The First Homes scheme comes as the government also launches its Own Your Home campaign.
Ads across TV, digital and radio will highlight the range of options available to FTBs to help them onto the property ladder.
These include the government’s 95% mortgage guarantee, Help to Buy, Shared Ownership and Help to Build schemes.
