“Agents need to be ready for Government’s First Homes scheme properties”
The initiative is to help budget buyers access ring-fenced affordable new-builds in local areas – but eventually these will spill into the resale market.
On the 24 May the Minister of State for Housing, Christopher Pincher made a Written Ministerial Statement on the future plans for affordable housing. In the statement, he discussed the new ‘First Homes’ scheme.
First Homes were initially consulted on in February 2020 and it’s an interesting initiative because government are not just introducing more buyers, they’re actually giving them something to buy.
‘First Homes’ will be newbuilds meaning the sales will be handled by developers, but first-time buyers don’t stay put for long, so those houses will come onto the second-hand market in-time and provide helpful stock.
In some instances, they will be earmarked for veterans and key workers, that’s down to local discretion using section 106, but the government are keen to encourage it.
Those buyers can secure the house at a minimum discount of 30%, again decided by the local authority.
The discount exists in perpetuity, meaning that generations of first-time buyers are being helped with the size of the deposit, which we know is the biggest stumbling block.
Because First Homes have the local clause, the ringfencing for certain buyers and the discount, there is learning for agents who will encounter them, although those working in AONB will most likely have dealt with similar when encountering restrictions under section 157.
Propertymark will be distributing information for agents as soon as we can, it’s been speculated that the scheme will start with a pilot of 1,500 houses soon so watch this space.
Generation rent
This campaign and similar predecessors are aimed at the lower end of the market, with a real push on homeownership and getting ‘generation rent’ onto the ladder.
And whilst we support helping first time buyers, the market needs to be considered as a whole and the UK Government seem to have tunnel vision. What we are not seeing are initiatives to free up family homes and support downsizers.
If more first-time buyers are created, we see a flood from one end of the market which could create a logjam when people want to upsize to family homes and find a lack of availability.
That means they stay put, making it look like more starter homes are needed because they are all full.
We need to see some homes being built for older people to encourage movement at the end of the market as well and allow a friction free flow of buyers and sellers.
Read the official guide to First Homes.
