First Homes trial discount scheme for first time buyers

Make your house a home

Some of the key factors of recent elections have been making home ownership more affordable for more people, particularly those wanting to purchase first homes, as well as the regeneration of deprived areas. The results have meant significant gains for the Conservatives in former Labour strongholds, and new policies designed to realise voters’ confidence are slowly being introduced.

To further boost home ownership in areas where, traditionally, fewer people have been able to buy into the housing market, the government’s new ‘First Homes’ scheme is being trialled for first-time buyers. First Homes endeavours to help first time buyers by providing a discount of 30% to 50% on their first property, and initially it is being trialled at Bolsover in Derbyshire.

In order to qualify as a First Home, the initial sale of the property must be at least 30% below open market value and below the national cap of £250,000 (or £420,000 in Greater London) after the discount has been applied. However, the rules give local authorities and neighbourhood planning groups the discretion to require a higher minimum discount of either 40% or 50%, or to set a lower cap – if they are able to demonstrate the requirement for these amendments.

When a First Home property is sold by the developer to the first home buyer, a restriction is entered onto the title register identifying the property as a First Home. This is to ensure that the title cannot be transferred to another owner unless it is confirmed to HM Land Registry by the local authority that the First Homes and other eligibility criteria have been met, including the discounted sale price.

The new build homes under the scheme will be offered to first time buyers who want to buy property in their local area, many of whom will be key workers.

There is likely to be fierce demand for the homes, particularly as first time buyers are already being offered other incentives, including mortgages with lower deposits, in a market where few properties are available to purchase.

It is hoped the scheme will help first time buyers stay ahead of buy to let investors, who often compete for the same types of property. However, there are concerns that it will simply drive up property prices which are already at record levels. Indeed, the average price of a home in Bolsover has already increased 28% in the last five years, to £333,564.

The housing secretary, Robert Jenrick, said the First Homes scheme will “offer a realistic and affordable route into home ownership for even more people who want to own their own home.”

The government website has full details of the scheme, including a checklist, if you want to see if you are eligible to apply.