THE FIRST HOMES SCHEME launched across England earlier this month.

The scheme offers discounted new-build homes to local first-time buyers.

However, an East Lancashire estate agent suggests that it might not be the most useful initiative for first time buyers who are on the market.

The aim of the scheme is to help local first-time buyers – many of whom will be key workers like NHS staff and veterans – onto the property ladder by offering homes at a discount of between 30 to 50 percent compared to the market price.

Once the discount has been factored in, the most expensive properties available (outside London) is £250,000.

The government say the aim of the scheme is to support local people who struggle to afford market prices in their area, but want to stay in the communities where they live and work.

Who qualifies for the scheme?

It is for first-time buyers only and each individual authority will be able to prioritise them for local people and for key workers, meaning it’s unlikely that you will be able to buy a home in an area you aren’t geographically connected to.

To be eligible, you need to have household earnings below £80,000, or £90,000 if you’re in London.

Buyers will also need to take out a mortgage of at least 50 per cent of the property’s value.

What are the benefits of the scheme for Lancashire buyers?

According to data from Land Registry, property prices for first-time buyers in Lancashire have surged by more than 10 per cent in the last year (March 2020 compared to the latest March 2021 data).

First-time buyers also make up about about a third of all sales going through right now.

This scheme can improve affordability of properties for first-time buyers who are competing with buy-to-let investors for properties.

Rightmove’s Director of Property Data Tim Bannister says: “There’s likely to be a scramble for properties under this scheme as they become available, especially as we’ve already seen an influx of first-time buyers enter the market recently, helped by more lower deposit mortgages being available.

“The scheme could help level up the playing field for buyers in areas where there’s strong competition between first-time buyers and buy-to-let investors, and could help some people bring their plans forward or buy a bigger home than they were originally expecting to.

“Based on current available stock levels it’s unlikely there will be enough of these properties to satisfy the high levels of demand, so eligible buyers will need to get in quick to have the best chance of securing one.”

The discount of at least 30% will also be passed on with the sale of the property to future first-time buyers, meaning homes will always be sold below market value, helping local communities and families for future generations.

What are the disadvantages for locals?

If you are looking to make a profit when reselling, you will struggle to do so under this scheme as buyers must sell their house at the same percentage discount that they bought it with.

It’s also thought that buyers could struggle to secure the properties due to the high level of demand.

Sally Harrison, from Sally Harrison Estate Agents in Barnoldswick doesn’t  think it’s the best scheme available for all first time buyers.

She said: “Certainly in the Pendle area, I don’t think it will be beneficial as most of the new properties will still be out of the price range for first time buyers.

“If you could get the same on a second-hand house it would be a massive benefit… but it’s only new-builds.”

Sally also thinks there will be a rush to buy the properties with demand outstripping supply.

“We’ve been so busy since coming out of the first lockdown.

“Right now whatever comes on the market is snatched up almost instantly.

“We’ve had first-time buyers placing offers over the asking price because they’re desperate to just secure something.”

Sally explained that the 95 per cent mortgage scheme might be more beneficial to first time buyers hoping to get on the property ladder for an affordable price.

She explained: “It’s more useful to first time buyers looking at second hand homes- especially if they haven’t got a large deposit at their disposal.”

Ms Harrison recommends first-time buyers to set up property alerts if they want to secure a property in the current climate.

They should also ring the estate agents asking if anything suitable has come on the market.

Sally explained: “The more they make themselves known to the estate agents, the more they will stick in their minds.”