First-time buyers could get 20% discount on homes near where they grew up under new plans
FIRST-time buyers could get a 20 per cent discount on homes in the area where they grew up under new plans being considered by ministers.
They come on top of proposals to rip up existing rules around “shared ownership” housing to help low-income Brits buy their first home.
The plans unveiled today mean Brits could move up the property ladder for just thousands of pounds.
Meanwhile, the up to 20 per cent discount would be offered on the price on new properties, with the cost being borne by developers, said.
Robert Jenrick, the housing secretary, wrote in the paper today: “I want young people… to be able to stay in their communities.
“It’s not right that people on low incomes risk being forced out.”
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a grim task but there are schemes out there to help first-time buyers own their own home.
Help to Buy ISA – It’s a tax-free savings account where for every £200 you save, the government will add an extra £50. But there’s a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan – The government will lend you up to 20 per cent of the home’s value – or 40 per cent in London – after you’ve put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime ISA – Another government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards your first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you’re restricted to specific ones.
“First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest .
“What a difference it might make to the planning system if existing residents knew that a good proportion of new homes would be sold at discounted prices to local people trying to get on the ladder,” he added.
Mr Jenrick mentioned areas that have been difficult for first-time buyers because of second home owners, such as Cornwall and Cumbria, but the policy could be applied across the country.
If it becomes a reality, it would provide some relief for first-time buyers who face having to raise an average deposit of £32,000 with the figure soaring to £110,000 in London.
Thousands of first-time howeowners who bought with a 5 per cent deposit just two years ago could now also be in negative equity due to falling house prices.
This is when you owe more money on your mortgage than the value of the property.
Paula Higgins, chief executive of the HomeOwners Alliance, told The Sun: “The emptying of communities and the plight of younger people getting onto the property ladder is an issue that affects us all.
“So it is right for government to focus on this, especially in areas where property prices are out of reach of those living and working in the area.
“But the devil is in the detail, and you cannot treat those people who have the right place name on their birth certificate over those who are settled and making a positive contribution to the community they live in.
“First-time buyers should be given the same advantages where ever they choose to live – it shouldn’t depend on where they were born.”
The Ministry of Housing, Communities and Local Government didn’t confirm whether first-time buyers will potentially get a 20 per cent discount when contacted by The Sun.
A spokesperson said: “The proposal is being considered and we will set out more details in due course.”
Parents who lend their children money to help them onto the property ladder risk blowing their pensions, new research has found.
The average adult fork out over £63,000 in rent before they get onto the property ladder – about a quarter of the average cost of a home in the UK.
Looking to buy your first home? Here’s our guide on how to get a mortgage and which government schemes are available.
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