Local Life - Wigan - August 2021

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having
First Homes
- An Overview
The Government have recently launched the First Homes
initiative, their latest scheme for prospective home
buyers, and one designed to give first-time buyers in
England, and key workers in particular, a chance to buy
homes within their local area for a 30-50% discount.
This sounded too good to be true, so I took a look over
the scheme and here’s an overview at what this means for
future homeowners in the Wigan area.
The background
First Homes is just the latest in a range of initiatives
that the Government has launched to help people buy
homes. The government’s target is to make 1,500 First
Homes available by the end of 2021, with a total of 10,000
eventually. Some previously frustrated homebuyers will
get lucky and gain a foothold on the property ladder, but
many will not as demand is likely to be fierce.
The first properties available through the scheme have
been put on the market in Bolsover in the Midlands,
and the government has asked developers to ring-fence
25 per cent of all new homes built, so most parts of the
country should have at least a few of these affordable
homes coming on-stream soon.
Are you eligible?
The scheme is only open to first-time buyers. If you’ve
never owned a property but your partner has, then you
won’t be eligible for the First Homes scheme. It must be
your first non-rented home.
The combined annual income of all the buyers can’t
exceed £80,000 (£90,000 in London).
You must have some sort of ‘local connection’. This is
where it gets a little bit hazy, and the criteria will differ
from area to area. It may be something as simple as
family in the area or being employed locally, but
each local authority will be able to set their own criteria
and they are also responsible for setting the discount
levels. However, it is expected that, in all areas, the priority
will be given to key workers, so if you are deemed as a
key worker, then you have a better chance of securing a
property.
Main benefit
According to a recent survey published by Dataloft using
the UK House Price Index, a 30% discount in the North
West would be worth £47,342 to first time house buyers
whilst a 50% discount would be worth £78,903.
These are substantial discounts for any person, but
massively so to a first-time buyer. Effectively this means
that first-time buyers may be able to secure a home for as
little as half the market price.
Main drawback
The discount is ‘for keeps’ – all subsequent buyers of the
property will receive the same percentage discount, not
just the first buyer. When a buyer comes to sell their First
Homes home, they must pass on the same percentage
discount that they themselves received, and the buyer
must also be someone who meets the eligibility criteria
at the time.
Most first-time buyers will not be deterred by this rule,
but it’s something to consider when looking at the longer
term. As there is less scope for making such a big profit,
buyers under the First Homes scheme may struggle to
climb the housing ladder as quickly in future.
Summary
Depending on your personal circumstances and the level
of discount you can secure, the benefits of the First Homes
scheme generally outweigh the drawbacks and any first
time buyer, particularly those already in the rental sector,
should carefully consider the scheme.
For details on this and other Government schemes
targeted at house buyers, check out
www.ownyourhome.gov.uk.
Alan Batt is a member of The Royal Institution of Chartered Surveyors (RICS) and has
worked within the Wigan property market for over 30 years.
Alan Batt
For more of Alan’s tips, guidance and analysis on the Wigan property market, check out his blog at
www.alanbatt.co.uk