First-Time Buyers To Get Up To 50% Discount On Houses Under New Government Scheme
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First-time buyers in England will be able to apply for a discount of up to 50% on a new-build home under a new scheme.
The government’s First Homes initiative could save buyers £100,000 or more, and is aimed at people wanting to buy within the area they live.
It is expected that many of those applying for the scheme will be key workers including NHS staff as well as others who have been on the pandemic frontline.
The scheme will offer new-build homes at a discount of at least 30% compared with the market price, however local authorities will be able to offer more substantial discounts - of up to 50% - if they can ‘demonstrate a need’.
According to Rightmove, the average asking price for first-time buyers in Great Britain currently stands at £205,925, meaning some buyers could save themselves £100,000 or more under the scheme.
What is more, the discount will be passed on with the sale of the property to future first-time buyers, meaning the homes will always be sold below market value.
The housing ministry said: “[The scheme will] benefit local communities, key workers, and families for generations to come and will support local people who struggle to afford market prices in their area, but want to stay in the communities where they live and work.”
The scheme will only be open to households with a combined annual income of less than £80,000 - £90,000 in Greater London, and councils will be given the power to apply their own requirements such as prioritising key workers or local people.
The scheme also stipulates that the buyer cannot be required to pay more than £250,000 - or £420,000 in Greater London - after the discount has been applied, but again councils may be able to adjust those price caps downwards in their areas, and only buyers who require a mortgage will be eligible to prevent people buying the homes purely as an investment.
However, some experts warn that with demand for the discounted homes likely to exceed supply, it could spark a scramble for properties, further fuelling the house price boom.
Tim Bannister, Rightmove’s director of property data, said: “There’s likely to be a scramble for properties under this scheme as they become available, especially as we’ve already seen an influx of first-time buyers enter the market recently, helped by more lower deposit mortgages being available.”
Robert Jenrick, the housing secretary, said: “First Homes will offer a realistic and affordable route into home ownership for even more people who want to own their own home.”
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