First Time Buyer new home scheme to cut costs by a third
The Government announces it will cut the cost of new homes by a third for first time buyers under ‘First Homes’ scheme.
On February 7, the Government announced that it would cut the cost of new homes by a third. The Government says this will result in a “discount locked into the property to ensure more first-time buyers benefit”. Robert Jenrick, the Housing Secretary, stated that this would help affordability for first-time buyers which in turn save eligible first-time buyers on average around £100,000. Public services employees such as Firefighters, Nurses, Police Officers along with Armed Forces Veterans, Prison Officers, Teachers will be prioritised.
Mr Jenrick’s announcement said that the benefits of this are:
• First Homes will see a discount locked into the property to ensure more first-time buyers benefit in years to come.
• Local people unable to afford a home will be able to buy in their area, rather than be forced to look elsewhere by rising prices.
This is made possible because the scheme “will lower deposit and mortgage requirements” for local first-time buyers in England.
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. 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”.
The Government states that the average price of a newly-built home in England is £314,000 and £246,000 in Cornwall. Under the new scheme a saving of £94,000 could be made in England and £73,000 in Cornwall. This would enable first-time buyers to get on the ladder faster by taking more than £18,000 off a 20% deposit in England.
The Government aims to see the building of more than a million new homes over the next five years.
Paula Higgins, Chief Executive of the Homeowners Alliance, welcomed this news by saying.
“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.”
Labour claim this is a previous scheme being re-launched
However, John Healey MP, Labour’s Shadow Housing Secretary, dismissed the Government’s announcement of homes for first-time buyers by saying:
“This is yet another empty promise from the Conservatives, after 10 years of failure on housing. We’ve heard this all before. Conservative Ministers previously pledged to build 200,000 cut-price homes for first-time buyers, but the National Audit Office has confirmed they haven’t built a single one, despite wasting almost five years and spending millions of pounds. Unlike Labour, the Tories have no plan to fix the housing crisis.”
The Opposition’s view is that the Conservatives are re-announcing an old proposal to build. It also says first-time buyers may already be able to get the same discount being proposed simply by buying an existing rather than newly built dwelling because.
Labour also disagrees with the statistics stated by the Government. It says the Government has fallen short of its own target for new homes built by pointing to a report from The National Audit Office report ‘Investigation into Starter Homes’ released in November 2019 which found that, despite the Conservatives’ promise to build 200,000 starter homes for first-time buyers in 2015, not a single starter home had been built.