Housebuilders are being invited to bid for government funding to help deliver discounted first homes for locals and key workers across England.
The government has earmarked £150m to support the roll-out of the scheme with a target of 1,500 new homes by March 2023.
Housing Secretary Robert Jenrick said: “Homebuilders of all shapes and sizes will now be able to benefit from this scheme while helping first-time buyers and key workers onto the property ladder.”
The scheme offers homes at a discount of at least 30 and up to 50 per cent of the market price. The discount will then be passed on when the property is sold to future first-time buyers.
Successful bidders will gain finance to engage local people and mortgage lenders, understand the level of customer demand and learn about the process before going through planning.
Homes England chair Peter Freeman said: “This is a great opportunity for housebuilders, housing associations and the wider development sector to get to grips with first homes.”
Builders are concerned councils could ask for hefty discounts
The National Federation of Builders, NFB, said it broadly supported the initiative as it would give a greater opportunity to deliver different types of housing. However, NFB housing and planning head Rico Wojtulewicz said the scheme was better suited to larger sites rather than smaller brownfield ones.
He also expressed concern that local authorities could ask for unrealistic discounts well above the minimum 30 per cent which would be unviable for complex sites.
Earlier attempts to offer discounted starter homes for first-time buyers under the age of 40 during David Cameron’s government failed with not a single new home built.
However, the current government pointed to its successful pilot in Bolsover, Derbyshire, where the first home of 22 was completed and handed over to the district council in June.
The social housing sector is unhappy that the government regard first homes as ‘affordable housing’ which they say will reduce funding for other tenures such as affordable and social rent.
Bridging loan intermediary Hank Zarihs Associates said property development finance lenders would be keen to offer finance to SMEs who participate in the scheme.
More information on the invitation to tender is available on Procontract.
