Property Loans News:- Young people priced out of buying in their hometown, key workers and veterans could get up to a third off the price of their first home, said housing secretary, Robert Jenrick, today.
House builders support the move and believe it’s an improvement on the ineffective starter home initiative launched by the former prime minister, David Cameron, and his chancellor, George Osborne.
Home Builders Federation communications director, Steve Turner, said: “It will help another part of the market get into home ownership which will, in turn, help house building.
“You have to have certainty of demand and if you create this, this will help the market.”
The First Homes scheme would lower deposit and mortgage requirements on a proportion of new homes with the government consulting on how to do this.
Mr Jenrick said the initiative would be “genuinely life-changing” for everyone in England looking to buy their first home.
“A proportion of new homes will be made available at a 30 per cent market discount rate – turning the dial on the dream of homeownership.
“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.”
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Pricey places would be more accessible
Popular places for second homes such as Cornwall, where the average cost of a new home is £246,000, would mean savings of more than £73,000, for example.
The scheme would also deliver big savings in areas where prices are high such as the South East. The average cost of a new build home in England is £314,000. Under First Homes, a property sold with 30 per cent off would deliver a £94,000 saving taking more than £18,000 off a 20 per cent deposit.
Homeowners Alliance chief executive, Paula Higgins, said: “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.”
The government is consulting on a price cap on properties available through the scheme, similar to the ones on stamp duty and the new help-to-buy equity loan scheme.
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Brokers Hank Zarihs Associates said development finance lenders would be interested in studying the proposals in more detail. The brokerage added that a discount passed onto the next local buyer would make a lasting difference in expensive areas.
The government said it was determined to rebalance the housing market through schemes such as First Homes and pointed out it had extended the help-to-buy equity loan scheme to 2023.
Government figures show first-time buyers reaching 357,090 – an 11-year annual high and an increase of 84 per cent since 2010. The percentage of home-owning 25 to 34-year-olds has grown from 36 per cent to 41 per cent over the last five years.
