Questions have been raised about the government’s housing policy after it pledged a 30 per cent discount to local first-time buyers.
Speaking at the House of Lords yesterday (December 19) the Queen, on behalf of the government, said her ministers would “take steps to support home ownership” which included “making homes available at a discount for local first-time buyers”.
In supporting documents the government stated it would launch a consultation on ‘First Homes’ — a new initiative which would aim to deliver homes at below market prices, prioritised for local first-time buyers.
Such homes will be provided for local people and key workers at a discount of at least 30 per cent in a move which would save them “tens of thousands of pounds”, the government said.
This discount is set to be funded by developers through “developer contributions”, which the government said were an “established mechanism” for ensuring new developments delivered benefits for local communities.
The homes would therefore remain discounted forever and support people “now and in the future”.
The policy was first announced in the Conservative party’s manifesto, launched last month (November 25) during the election campaign.
But industry experts have raised concerns over the policy, claiming the “laudable” legislation came attached with a number of questions.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the policy was a “very interesting idea” but that its success would be “determined by the detail and how it works in practice”.
He said: “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?
“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?”
Sarah Coles, personal finance analyst at Hargreaves Lansdown, agreed, saying the policy would be “warmly received” but raising concerns over “exactly how it will work”.
Meanwhile Jeremy Raj, national head of residential property at Irwin Mitchell, said the intentions behind discounts for local first-time buyers were “laudable” but said the danger was that “a lot of time, energy and resource” will be spent creating “complex rules in an already complex system”.
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