Starter for First: Déjà vu as Jenrick unveils cut-price housing scheme

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THE Government appears to be offering a fresh take on its failed Starter Homes discount scheme for first-time buyers in its first major housing announcement of the year.

First Homes, announced by the housing secretary Robert Jenrick MP, intends to cut the cost of new homes by around a third. The Ministry of Housing, Communities & Local Government (MHCLG) claims this could save eligible first-time buyers an average of around £100,000 off the cost of a home.

The scheme, which is aimed at first-time buyers, will also seek to prioritise military veterans and key workers, such as nurses, fire fighters and police officers. The discount would be “locked” into the property in perpetuity; the idea being to pass on the benefits of the discount to future generations of first-time buyers.

“First Homes will be genuinely life-changing for people all over the country looking to buy their first home,” said Jenrick.

“I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. 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 discount will be passed on with the sale of the property to future first-time buyers, helping thousands more people in years to come and ensuring local communities can stick together.”

By reducing the overall cost, it is claimed the scheme will lower the level of deposits, and the size of the mortgage needed for local first-time buyers in England. The discount will apply to a “proportion” of new homes, with the Government set to consult on how this will be delivered.

Despite the lack of any specific target for First Homes, the echoes of Starter Homes is inescapable. That scheme, first proposed back in the days of David Cameron’s government, proposed 200,000 cut-price newbuild homes for first time buyers.

However, as the National Audit Office revealed in November last year, the scheme failed to deliver even one home, despite millions being spent on it. This point wasn’t missed by Labour’s shadow housing secretary, John Healey MP, who criticised the announcement.

“This is yet another empty promise from the Conservatives, after 10 years of failure on housing. We’ve heard this all before,” he said.

Paula Higgins, chief executive of the Homeowners Alliance, welcomed the proposals, but the National Housing Federation (NHF) and the Local Government Association (LGA) expressed concern at the potential impact on the provision of much-needed affordable rental housing.

“We know that first-time buyers will welcome the opportunity to buy a good quality home at a discount in their local area,” Higgins said. “We look forward to contributing to the consultation and working with the government to ensure that the scheme does what it says on the tin – more high quality and affordable local homes for current and future first-time buyers.”

Kate Henderson, the NHF’s chief executive, said: “We are concerned that this proposal could make it more difficult for housing associations and councils to provide homes for lower income families.

“We support efforts to increase home ownership, but not at the expense of building homes for those most in need.

“At present almost half of new affordable homes come through the planning system. If this proposal goes ahead, we will need to see a significant increase in government funding for genuinely affordable housing – this is the only way we will end homelessness and provide the homes local areas need.”

Councillor David Renard, the LGA’s housing spokesperson, said: “Councils support measures to enable home ownership. It is important that this does not come at the expense of providing truly affordable homes for rent.

“Not everybody is ready to buy, and we will be making the case in this consultation that local areas will need discretion on the number of First Homes required in new developments.

“This will allow councils to ensure a mix of homes – to rent and buy – are available and affordable to people that need them. A genuine renaissance in council housebuilding would increase housing supply, boost home ownership and reduce homelessness.”



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