Government Unveils New Discount Scheme for First-time Buyers

Housing Secretary Robert Jenrick has confirmed plans to offer a 30% discount scheme, called First Homes, which could be worth up to £100,000 a select group of eligible first-time buyers.

The discount only applies to local buyers and will be prioritised for veterans and key workers such as nurses, police officers and firefighters.

First Homes will see a discount locked into the property, which will be inherited by the next first-time buyer. This means a lower deposit and mortgage requirements for local first-time buyers in England.

This discount will only apply to a proportion of new homes, with the government consulting on how this will be delivered.

Veterans will be prioritised as part of Armed Forces Covenant and councils will also be able to use the scheme for front-line workers in their area such as police, nurses, prison officers and teachers.

Jenrick said: “First Homes will be genuinely life-changing for people all over the country looking to buy their first home. I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices.

“A proportion of new homes will be made available at a 30% 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.”

“The average price of a newly built home in England is £314,000. Under First Homes, a property sold with 30% off this price would deliver a £94,000 saving and enable first-time buyers to get on the ladder faster by taking more than £18,000 off a 20% deposit.”

The proposals published today include measures to help release more land. However, the Tories aren’t famous for keeping their promises to First Time Buyers. Last year a report from the National Audit Office found that a 2015 pledge to build 200,000 new starter homes for first time buyers had failed to produce a single property.

John Healey MP, Labour’s Shadow Housing Secretary, said: “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.”

The latest figures show the number of first-time buyers reaching an 11-year annual high of 357,090 – up 84% on 2010 – and the percentage of homeowning 25- to 34-year-olds has grown from 36% to 41% over the last five years. However, the figure is still shy of the 59% seen in 2002-03.

Paula Higgins, chief executive of the Homeowners Alliance, said: “We know that first-time buyers will welcome the opportunity to buy a good-quality home at a discount in their local area.

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 scheme will apply the discount in perpetuity, so when the home is sold in years to come the new local buyer will be able to purchase it at a discount as well. The measures build on action from the government to make it easier for people across the country to take their first step on the property ladder.”