The government’s new First Home scheme will give first time buyers a 30% discount to get on the property ladder.
Successful first time buyer applicants of the government’s new First Home scheme are given a 30% discount saving them up to £100,000 on a new-build home in England.
The lack of affordability is not just in London and the South East as the number of young first time buyers that can buy with a mortgage and 10% deposit has reduced from 93% in 1996 to only 61% in 2016.
Priority is offered to local people that would struggle to buy on the open market, especially young first time buyers as well as key workers such as nurses, firefighters, police officers and armed forces.
Government pledge to build more homes
Over the last 23 years the average house price in the UK has increased from £58,854 in August 1996 to £235,298 in November 2019 with the deposit quadrupling over this time.
Higher house prices allow older equity release buyers stay in their home while accessing the wealth with a lifetime mortgage, using this for any purpose such as home improvements, holidays or giving to a family member.
In the next five years the government has pledged to build one million new homes having built 241,000 of all types in 2019, the highest number in over 30 years.
Housing Secretary Robert Jenrick said, a proportion of new homes will be made available at a 30% market discount rate turning the dial on the dream of home ownership.
The scheme would also be available to home movers or previous homeowners that are stuck in unsuitable housing and unable to move as the next step is unaffordable.
Developers contribute to new homes
The government will use developer contributions to ensure local communities can benefit from the First Home schemes with 28,168 affordable homes delivered in 2018-19.
As an established method to deliver homes sold at a discount, the scheme intends to use section 106 planning obligations to prescribe a percentage of all new build homes that will be affordable.
The 30% discount would remain when the property is sold and passed to the next first time buyer thereby helping thousands of people get on the property ladder.
The scheme promotes new home ownership for people with affordability issues and is not available to switching remortgage buyers or buy-to-let investors.
In addition to local authorities, delivery of affordable homes can be through exception sites that are outside the local plan and are small locations across the country or in rural areas.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to pay university fees for grandchildren or pay for care at home.
Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
