Government to cut the cost of new homes by a third

Housing Secretary Robert Jenrick has said that a new generation of homeowners will be backed by the government thanks to a scheme cutting the cost of some new homes by a third.

First Homes will see a discount locked into the property to ensure more first-time buyers benefit in years to come. It should mean that local people who are unable to afford a home will be able to buy in their area, rather than be forced to look elsewhere by rising prices.

Veterans will be prioritised as part of Armed Forces Covenant and councils will also be able to use the scheme for front-line workers in their area such as police, nurses, prison officers and teachers.

The scheme will lower deposit and mortgage requirements for local first-time buyers in England – shaking up the housing market and making the dream of home ownership a reality. The average price of a newly-built home in England is currently £314,000. Under First Homes, a property sold with a 30 per cent discount would deliver a £94,000 saving and enable first-time buyers to get on the ladder faster by taking more than £18,000 off a 20 per cent deposit.

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

David Renard, housing spokesman at the Local Government Association, 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. The last time this country built homes at the scale that we need now was in the 1970s when councils built more than 40 per cent of them. Councils were trusted to get on and build homes that their communities needed, and they delivered, and they can do so again.

“For that to happen, the government needs to use the forthcoming Budget to reform Right to Buy, by allowing councils to keep receipts of homes sold under RTB in full and to have the flexibility to set discounts locally.”