Queen’s speech makes 30% first-time buyer discount pledge
The Queen’s speech, which is written by the government, has pledged to provide homes at a discount for local first-time buyers.
Before the election the Conservatives pledged to discount homes by a third for local people who cannot otherwise afford to buy in their area. The party added that this could be used to prioritise the likes of police, nurses and teachers.
The Queen said: “My government will take steps to support home ownership, including by making homes available at a discount for local first-time buyers.”
A briefing document published alongside the Queen’s speech said: “The government will shortly launch a consultation on First Homes.
“This will provide homes for local people and key workers at a discount of at least 30% – saving them tens of thousands of pounds.
“The discount on First Homes will be secured through a covenant. This means these homes will remain discounted in perpetuity, supporting people now and in the future who aspire to own a home of their own.”
Dilpreet Bhagrath, mortgage expert at online mortgage broker Trussle, said: “The government’s proposal of a discount of at least 30% for first-time buyers on homes in areas near to where they grew up is certainly positive.
“With average house prices now nearly eight times the average UK wage, the younger generation often struggle to get any kind of a foothold on the housing ladder.
“Ensuring homes are affordable will make homeownership more accessible, particularly for the under-served younger generation and those on lower incomes.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Discounts for first homes is a policy which is all about giving first dibs to local people as opposed to investors or foreign-based buyers.
“It is very laudable, helping to build communities and reducing the risk of properties being left empty with the lights on or off. This is such a waste of resources when there is such high demand for property as supply has failed to keep up with household formations for so long.
“Local discounts are, in theory, a very interesting idea and one that was mentioned both during and before the election campaign, and not just by the Conservatives. Its success will be determined by the detail and how it works in practice.
“It sounds a bit like a shared ownership-type arrangement so it is not clear whether the discount will be portable if buyers change up or even if buyers trade down.
“Questions that need answering include: as people move, will it be portable and how will developers be persuaded to sell at a discount? Will it be via housing associations or local authorities? Who will pay for the subsidy? And who is a local person – do they have to live in the area, work in the area, and will they be obliged to leave if they move out of the area or no longer work in it?”