Housing Secretary Robert Jenrick said a new generation of homeowners will be able to take their first step on to the housing ladder thanks to the First Homes initiative, under consultation until April, cutting the cost of some new homes by a third. The plan is for the First Homes to see a discount locked into the property to ensure more first-time buyers benefit in years to come. It’s hoped that local people unable to afford a home will be able to purchase in their area, rather than be forced to look elsewhere thanks to rapidly rising prices.
Veterans will be prioritised as part of the Armed Forces Covenant, while councils will also be able to use the scheme for key workers in their area – for example police officers, nurses, prison officers and teachers.
At present, the average price of a newly-built home in Herefordshire is £255,000 so under the First Homes scheme, a property sold with 30% off this price would deliver a £76.5K saving.
Bearing in mind that earlier initiatives to help first time buyers have not been successful, it’s how it will work in practice that will be the acid test. The Help to Buy Scheme appeared to inflate the cost of new houses, which benefitted the shareholders and directors of volume builders. Worse still the 2015 commitment to build 200,000 affordable houses achieved nothing. The obvious pitfalls of First Homes are that the initiative will be funded by diverting Section 106 money, and that the builders will determine the value of the housing.
Properly structured, First Homes may assist first time buyers, but home ownership is still an unaffordable dream for many. Decent housing, at social rents, delivered through Community Land Trusts, is a vital part of solving the UK’s housing crisis.