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Government Consultation on First Homes and Some Detail on New Help to Buy Scheme Rules


The Ministry of Housing, Communities and Local Government (MHCLG) recently published a consultation paper to consider the creation of a First Homes scheme in England aimed to deliver discounted homes to local people.

The consultation process, which closes on 3 April 2020, requests views on the design of a First Homes scheme, including how it should work in practice.

It suggests that First Homes:

  • will include flats and houses built on developments, to be sold to local people who wish to stay in the community they live or work in, but struggle to purchase at market prices;
  • will have a minimum discount of 30% off market price. However, local areas will be able to set a larger discount to ensure the homes are affordable to local people;
  • will be prioritised for first-time buyers, members and veterans of the Armed Forces, and key workers, such as nurses, police and teachers;
  • are to be lived in, so buyers would be restricted to using them as their “sole or primary residence” – and not used as holiday homes or as buy to lets.

Despite the scheme name, MHCLG seeks views on circumstances where Local Authorities should allow non-first-time buyers to access First Homes on the same basis as first-time buyers.

The MHCLG proposes that the discounted value should be preserved, so if buyers of First Homes decide to move, their home will be independently valued, and the discount will be passed on to the new buyer with the appropriate discount applied to the new value.

The consultation paper also considers how best to deliver the scheme and seeks views on setting developer contributions for First Homes, delivery through exception sites and Community Infrastructure Levy exemptions. The consultation also seeks views on how First Homes could work for mortgagees.

Source: Ministry of Housing: Communities and Local Government: Consultation on the design and delivery of First Homes (7 February 2020).

Help to Buy

The MHCLG also announced further details of the Help to Buy scheme to run from April 2021 until March 2023. As announced in the Autumn 2018 Budget, the scheme will offer financial help to first-time buyers, for properties with a market value up to a regional property price cap.

The MHCLG announced on 24th February that developers intending to use the Help to Buy scheme will need to comply with a range of new quality measures to improve consumer experience and safety, such as:

  • ground rents on leasehold properties sold through the scheme must be at a peppercorn rent;
  • homes built from May 2020 to comply with most recent energy efficiency requirements;
  • builders must be subject to adjudication provided by the New Homes Ombudsman and the preceding voluntary scheme, when established;
  • builders must sign up to the Building Safety Charter (when launched), if selling residential Help to Buy units in blocks above 18 metres (or six floors, whichever is lower)
  • builders with a Home Builders Federation star rating must clearly communicate that star rating on their relevant Help to Buy communications and advertisements.

In addition, all buyers will be entitled to view the actual home being purchased (with their own surveyor if desired) before legal completion of sale.

If you would like to discuss these proposals, please contact Chris Dolan on 01202 099 093 or email [email protected]

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