First Homes - discounted purchase price housing
First Homes is a Government scheme that seems to be growing in popularity, potentially replacing shared ownership properties on developments delivering on-site affordable homes.
The scheme has been around for several years but there has been little experience of it locally as far as we can tell. For those interested the Government|'s materials relating to first homes can be read here.
First Homes are discounted purchase price properties very specifically for first time buyers only, with possibly other qualification conditions such as needing to be a local person, key worker or military personnel. These categories of people will have priority access to the First Homes for a period of time.
First Homes are one aspect of the affordable homes definition, making up a small proportion of all affordable homes compared to those being made available for affordable rent.
The market price of the Furst Homes property is discounted by at least 30% meaning that the buyer has to find a lower deposit and mortgage, something they couldn’t stretch to at full market price. These properties are therefore potentially more 'affordable', hence falling under the affordable home definition..
It is important to note that these properties are not setting a lower market price for housing. That price remains intact.
First Homes houses are typically freehold, with flats and apartments being leasehold. The buyer owns the complete property despite paying a reduced price.
But there are some important caveats.
These properties will clearly help a few local people get on the property ladder. But being in relatively short supply, first time buyers need to get in quick!
The scheme has been around for several years but there has been little experience of it locally as far as we can tell. For those interested the Government|'s materials relating to first homes can be read here.
First Homes are discounted purchase price properties very specifically for first time buyers only, with possibly other qualification conditions such as needing to be a local person, key worker or military personnel. These categories of people will have priority access to the First Homes for a period of time.
First Homes are one aspect of the affordable homes definition, making up a small proportion of all affordable homes compared to those being made available for affordable rent.
The market price of the Furst Homes property is discounted by at least 30% meaning that the buyer has to find a lower deposit and mortgage, something they couldn’t stretch to at full market price. These properties are therefore potentially more 'affordable', hence falling under the affordable home definition..
It is important to note that these properties are not setting a lower market price for housing. That price remains intact.
First Homes houses are typically freehold, with flats and apartments being leasehold. The buyer owns the complete property despite paying a reduced price.
But there are some important caveats.
- New builds only.
- The buyer, or joint buyers, must all be first time buyers and not have a total income of more than £80k.
- The mortgage must cover 50% or more of the discounted price.
- The discounted price cannot be more than £250k which will limit the properties to flats or apartments in high house price areas. At 30% discount it limits the scheme to £357k market price. There are unlikely to be many new build houses at that price point locally
- The property must be the buyers only or primary residence.
- The same discount applied initially must be applied when the property is sold to benefit the next owner, who must also be a first time buyer and meet any other qualification conditions. This clearly stops instant profit making by the first and any subsequent buyers. The property deeds will state that the property must be independently valued at the time of sale and the level of discount to be applied.
These properties will clearly help a few local people get on the property ladder. But being in relatively short supply, first time buyers need to get in quick!
