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First Homes Scheme launched today.


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First-time buyers in England offered new homes at up to 50% off | First-time buyers | The Guardian

First Homes scheme: Properties with 30% discount for first-time buyers go on sale - LBC

Three homes Jenrick thinks it's a great idea so obviously it can't be, so where's the catch?

First-time buyers in England will be able to apply for a discount of up to 50% on a new-build home under a government scheme.

The First Homes initiative could save buyers £100,000 or more. But some experts say that with demand for these cut-price homes likely to exceed supply, it could spark a scramble for properties and add more fuel to the house price boom.

The government says the scheme is aimed at first-time buyers in the area where the homes are built, many of whom will be keyworkers such as NHS staff and those on the pandemic frontline such as delivery drivers and supermarket staff. It is aimed at helping them on to the property ladder by offering homes at a discount of at least 30% compared with the market price.

Edited by Bruce Banner
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Reminder of a similar titled scheme, just  over a yr ago..

Discounted housing scheme out of reach of 96% of first-time buyers

https://www.housepricecrash.co.uk/forum/index.php?/topic/235889-discounted-housing-scheme-out-of-reach-of-96-of-first-time-buyers/

https://www.theguardian.com/society/2020/feb/16/first-homes-scheme-unaffordable-most-buyers

 

edit: new scheme Gov Press release 

Press release Discounted homes for key workers and local residents as flagship First Homes scheme launches

https://www.gov.uk/government/news/discounted-homes-for-key-workers-and-local-residents-as-flagship-first-homes-scheme-launches

Edited by Saving For a Space Ship
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1 hour ago, Bruce Banner said:

People with BOMAD funded deposits get nice discounts, but less social housing for the actual poor?

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1 hour ago, Bruce Banner said:

Three homes Jenrick thinks it's a great idea....FOR TORY FUNDING PROPERTY DEVELOPERS.

 

50% discount means they've just doubled the price.

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1 hour ago, Bruce Banner said:

Can anyone find a link explaining how the funding for this specific "initiative" works? Best i can find is that it's part of an overall £12bn programme of demand-side stimulus.

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I remember seeing a version of this last time.

There was a hard upper limit for income, also some requirement to either live or work in the borough. 

Overall it didn't look that attractive. The major advantage is the discount, but it was 20% based off a punchy valuation. The major disadvantage is that the discount stays with the property and can only be sold to another eligible person, thus narrowing your market if you want to sell.

Sure some people may not have the cash but IIRC you could pick up an unencumbered property for c.10% more. That is more expensive but better value as you could keep all of the upside if there were gainz and it would be easier to sell.

I think this would be a similar fate. The arbitrary discount off a generous valuation means that it won't be that great a deal.

 

 

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4 minutes ago, Postman said:

If I've learned one thing in the last ten years, it's that government schemes designed to help first time buyers 'onto the housing ladder', invariably end in house price increases.

“The nine most terrifying words in the English language are 'I'm from the government, and I'm here to help.' ”?

Ronald Ragan.

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If politicians, bankers, estate agents, and house builders think something is a good idea, you can guarantee the benefits have already been divvied up long before the buyer arrives.

Alternatively, an old poker saying (apparently attributed to Warren Buffet) "If you can’t find the sucker at the table, you’re it."

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21 minutes ago, Huggy said:

If politicians, bankers, estate agents, and house builders think something is a good idea, you can guarantee the benefits have already been divvied up long before the buyer arrives.

Alternatively, an old poker saying (apparently attributed to Warren Buffet) "If you can’t find the sucker at the table, you’re it."

Luv it! 😁

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4 hours ago, Timm said:

People with BOMAD funded deposits get nice discounts, but less social housing for the actual poor?

If someone is able to buy with BOMAD it means they are not putting pressure on rental prices, are not claiming housing benefit.

Good luck to them

 

 

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I guess they got to do something to have keyworkers to be able to afford anything. So 10 percent HPI through there housing props this year and they will give keyworkers 30 percent off. If the government didn't keep proping up the market perhaps we could have all had 30 percent off and the government wouldn't have to subsidise these schemes along with high bills for housing benefit and working tax credit. But 1500 throughout the country per year is nothing and helps to stoo houses coming to the free market.

Tories get 10 mill from Vested Interest donors and repay them with policies or contracts for over 100 million. 

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Not a fan of these.

Discount has to be passed on so automatically narrow market. 
price goes up = only 70% of increase captured.
price goes down = mortgage debt remains the same

 Not sure lenders will want to lend against these unless either:

A. the LTV is low,
B. mortgagees in possesion are exempt from having to pass on the discount when they sell.
C. they are forced to lend by the government. 

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7 hours ago, Bruce Banner said:

“The nine most terrifying words in the English language are 'I'm from the government, and I'm here to help.' ”?

Ronald Ragan.

I think Reagan - and Senator Edmund Muskie before him - said this because they thought government was inefficient (government policy often failed to meet its objectives). I don't think that applies to UK government housing policy - they aren't trying to help buyers.

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4 hours ago, crescent said:

If someone is able to buy with BOMAD it means they are not putting pressure on rental prices, are not claiming housing benefit.

Good luck to them

To be fair, if they are using schemes like this, they are simply receiving a different form of housing benefit.

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On 04/06/2021 at 07:54, Bruce Banner said:

So it’s not a ‘gift’ as such but rather a reduced price which much then be passed on to the next buyer?  Effectively a shared ownership ie 100% maintenance but 70% ownership. The advantage being that people can buy something they might otherwise not be able to afford ie they get the space but financially are still at the lower level if they move.  

Sounds great....I would pay 30% more for a house like that.....er, bet that’s what happens. Help to Sell house prop version 43. 🤦🏻‍♂️

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How to get key workers in to work in expensive cities when they would be better off working elsewhere?

This pseudo discount is option 1. 

Option 2 is paying more than half a percent pay rise. 

It's going to be shock when they realise they're already on option 3. 

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I will wait and see it any of these ever actually go on sale.

Back in their 2015 manifesto the Tories promised to deliver 200,000 starter homes by 2020 at a 20% discount for first time buyers. In the 2015 spending review £2.3 billion was set aside for the first 60,000 homes under the scheme.  The number actually ever built - ZERO!

 

https://www.theguardian.com/society/2019/nov/05/tories-broke-pledge-on-starter-homes-in-2015-manifesto-report-says

Edited by MARTINX9
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