The Government is currently consulting on its proposals for First Homes for local people.
The consultation seeks input on the new proposed policies, both in terms of their design and the options for implementation. It will close on 3 April 2020.
The proposed policies cover what First Homes are, who should be eligible, how the scheme should work in practice, how to deliver these homes through developer contributions, and the requirement to deliver these homes through planning or legislation.
Key points from the proposed policies are:
- Lowered deposit and mortgage requirements, with a ‘standard model’ lending agreement that includes a mortgagee protection clause. These homes would be ineligible for Help to Buy.
- Amendment to the definition of “Discount Market Sale Housing” which is currently defined as at least 20% below market value.
- A possible cap on the value of properties to ensure they are not used to discount exceptionally expensive properties. This cap could be a nationally defined cap in line with the Help to Buy Equity Loan Scheme (£600,000), or regionally variable price caps.
- A proposed restriction on the sale of First Homes to enable them to remain as first homes in perpetuity, which could affect the value uplift of improvement works undertaken on homes. The government may leave the administrative details to local authorities.
- Special allowances for members and veterans of the Armed Forces seeking to purchase First Homes.
- To increase deliverability, the government has proposed either a requirement on developers to deliver First Homes alongside market housing via planning policy or legislation, or to amend entry level exception sites policy to a First Home exception site policy.
- The government is additionally proposing a First Homes exemption from CIL.
The government is proposing a First Homes exemption from CIL