The Government announced its intentions to roll out a new housing scheme to give the next generation of homeowners the opportunity to take their first step on to the property ladder.
The scheme, known as First Homes, will see a proportion of new homes be made available at a 30% market discount rate, with those eligible being able to buy direct from the developer.
However, properties built under the scheme will retain the discount it was purchased with, meaning that buyers wanting to sell will have to sell at the same 30% market discount rate.
This requirement has raised some questions about how buyers using the scheme will fare when trying to progress up the property ladder on the open market and how the discount will be maintained on future sales.
The Government has not yet given an exact figure of how many homes would be built under the First Homes Scheme, nor where the scheme will be trialled.
It is mooted that the Government will introduce the First Homes scheme via the planning system, and most likely via s106 Agreements. If the scheme is integrated into a s106 Agreement, developers will have to deliver a number of units on each new development as First Homes.
These First Home requirements may (and almost certainly will) replace, in whole or in part, the currently common requirements to transfer a proportion of the new homes on a development to a Registered Provider for shared ownership, intermediate or social/ affordable rent.
The housing charity Shelter has voiced their concerns that rather than creating a route to affordable homes, the scheme will simply put the social homes currently being built at risk.
A consultation has been launched to consider the new scheme, and will run until 3rd April https://www.gov.uk/government/consultations/first-homes. By then we should have a clearer picture on what the future holds.