Housebuilders urged to take part in 1,500-home project to test home ownership scheme
Housebuilders can now bid for a share of £150 million to support the roll-out of the latest government scheme aimed at helping first-time buyers on to the property market.
Developers can now bid to Homes England for money through a First Homes “Early Delivery Scheme”. They will have to offer plots for sale as First Homes, which offer a discount of at least 30% on the sale price to first-time buyers.
The discount, unlike a similar incentive under the previous failed Starter Homes programme, remains in perpetuity for future first-time buyers of the property.
The pilot programme aims to deliver 1,500 homes by 2023, with the first sales expected later this year. The aim is to “provide learning to Homes England to assist the national implementation of First Homes”, which will then go on to be delivered at scale via developer planning contributions, rather than government funding. The government has an ambition to deliver 10,000 First Homes a year.
First Homes are expected to account for 25% of affordable housing provided through section 106 agreements, under which developers agree to make a proportion of homes in a development affordable as a condition of planning approval.
The eligible homes for the scheme are capped by value at £420,000 in London and £250,000 in the rest of England. There are household eligibility caps of £90,000 in London and £80,000 across the rest of England.
The First Homes scheme is the latest drive by the government to increase levels of home ownership. The previous Starter Homes initiative, which failed to deliver a single home, offered discounts of up to 20%. This scheme ran into opposition in part due to concern over the valuation of properties, given that the discount only applied to the initial purchaser. An initial batch of 12 First Homes in Bolsover went on sale in March .
Housing secretary Robert Jenrick said: “Homebuilders of all shapes and sizes will now be able to benefit from this scheme while helping first-time buyers and key workers onto the property ladder”