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First-time buyers could get a discount of up to 50% on a property as part of the government’s First Homes scheme, which officially launched today.
The scheme, which was a pre-election pledge by the Conservatives in 2019, will normally see first-time buyers offered homes at a discount of “at least” 30% compared with the open market price.
After the discount has been applied, the price must be no higher than £250,000, or £420,000 in Greater London, the government said.
However, local authorities will be able to set a discount of either 40% or 50% if they can show evidence that it is needed.
Councils will also be able to impose lower price caps than those under the standard scheme.
The same discount will also be passed on if a home is sold on to another first-time buyer, the government said.
These discounts will be funded through developer contributions used to deliver affordable housing.
The initiative is among a series of measures ministers are hoping will help people get on the property ladder as part of a continued focus on homeownership.
First Homes has proved controversial, however, as the G15 group of large London housing associations warned last year that its members would deliver up to 3,600 fewer affordable homes a year if the government pressed ahead with the scheme.
In a statement last month, housing minister Christopher Pincher said that “a minimum of 25% of all affordable housing units secured through developer contributions should be First Homes”.
A consultation on the scheme, which was first announced in February last year, received around 800 responses.
Announcing the launch of First Homes today, housing secretary Robert Jenrick said the scheme will “offer more homes to local people and families, providing a route for first-time buyers to stay in their local areas rather than being forced out due to rising prices”.
Young people and key workers are among those the government hopes the programme will benefit.
The initial raft of First Homes will be marketed this summer, while the government will fund a further 1,500 homes to come to the market from the “end of 2021”.
Halifax and Nationwide Building Society are among the lenders who have said they will offer 95% loan-to-value mortgages against First Homes to support the roll-out.
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