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Govt's 'First Homes' scheme launched this week, FTBs to get 30% discount


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Have you read into the Govt's recently launched First Homes scheme?

The scheme which launched on the 4th June, "will help local first-time buyers – including key workers – onto the property ladder by offering homes at a discount of at least 30% compared to the market price."

https://www.propertyreporter.co.uk/property/ftbs-to-get-30-discount-as-governments-first-homes-scheme-launches-today.html?SRC=MC

Clearly, this scheme was put into effect with the desire of helping FTBs get on the housing ladder, which is important as the ladder is becoming an increasingly distant possibility for many people in the UK.

It's also important to note that the 30% discount of these houses will be passed on with the sale of the property, meaning they will always be BMV properties via this scheme.

I think this seems like an excellent way of counteracting the issue of supply and demand occurring in the country at the moment. What do you think?

Mark Rocks
Community Builder and Content Writer

www.propertyhub.net

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I actually had a similar idea several years ago (although more heavily discounted) and thought it made sense as it would get people on the ladder and essentially serve as a savings account you could live in 

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What are the hidden criteria or limitations for this scheme?

Surely 30% discount will come with some requirements e.g. can't sell the property within next 5 years or perhaps repay that 30% discount over 10years?

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It's definitely an interesting one this, for the main reason that the discount/scheme is registered with the land registry and should be tied to the the property whoever buys and sells it in the future.  This is a radical difference to the Help To Buy scheme which just helps buyers pay more (over simplification but close enough).

Ultimately, it's a variation on a flawed theme though: pump money into the demand side of the equation. Basic economics suggests that more demand will inflate the property prices which has a negative knock on effect for other buyers. The supply side obviously needs to be fixed for prices to hold or drop.

The usual restriction to new builds is a shame too, as new builds are already, on the whole, comparatively expensive. It's another win for large developers but not the end of the world for investors who already hold property though.

My guess is that, in years to come, the forced discount will he removed via an expiry date, such as 10 years post purchase, and a whole bunch of voters will be very happy indeed. Excuse the cynicism!

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