In his most public appearance since the coronavirus pandemic hit, the Prime Minister Boris Johnson headed to the West Midlands to unveil his major new affordable housing plan in front of a lectern with the slogan of ‘Build, Build, Build’.
Johnson promised that the UK will ‘build back better, build back greener and build back faster’ as the country looks to recover from the coronavirus crisis.
As part of a major ‘new deal’ speech
, which sought to mimic the series of programmes, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the US between 1933 and 1939 in response to the Great Depression, Johnson outlined the first steps in the strategy to rebuild Britain and fuel economic recovery across the UK.
Housing formed a major part of this speech, and in particular the discounted homes for First Time Buyers – a scheme which was first mooted in the Conservative manifesto in the lead-up to last December’s general election and which Robert Jenrick, the currently embattled Housing Minister, fleshed out in February of this year
Here, we take a look at what the PM said about the latest planned flagship housing policy, which follows in the footsteps of the Starter Homes scheme, Help to Buy
and, further back, Margaret Thatcher’s controversial Right to Buy
What did Boris Johnson announce?
The PM’s speech outlined proposed reforms to the UK's planning system, in an effort to make it easier to build better homes where people want to live.
Under the planned new system, there will be regulations which will allow for buildings and land in town centres to change use without requesting planning permission, while new homes will also be able to be created from empty buildings – for instance, converting high street stores that due to the coronavirus crisis have been forced to close their doors permanently. These changes are set to be implemented by September.
Alongside this, Johnson confirmed a £12 billion affordable homes programme, which will aim to support up to 180,000 new affordable homes for ownership and rent over the next eight years.
Furthermore, small and medium-sized housebuilders will be handed an extra £450 million in funding for new housing developments in an attempt to get Britain building. This injection of cash is expected to support delivery of around 7,200 new homes.
How do the new plans help First Time Buyers?
As part of the affordable homes programme, there is set to be the inclusion of a 1,500-unit pilot of the previously mooted ‘First Homes’ scheme.
First Homes (flats and houses built on developments throughout the UK) are no different from other properties except they are sold to First Time Buyers with a hefty discount of 30%, plus they are targeted at local people and key workers who might otherwise be forced out of their area by high house prices or unaffordable living costs.
Local people who want to stay in the community where they live or work but are struggling to buy a home at market prices will be the main target demographic for this scheme, so it doesn’t cover all aspiring First Time Buyers and may be a bit of a lottery in terms of geography and where you happen to be buying.
The plan is also for the 30% discount to be handed down to future buyers when First Homes are resold so more people can be helped onto the property ladder. This may in part be an effort to learn from the mistakes of the Right to Buy scheme, where properties have in many cases ended up in the hands of private landlords rather than being recycled affordably to other struggling First Time Buyers or being used to house those most in need.
As it stands, the government is still consulting on the final design of the First Homes schemes, so it’s not entirely clear when it will go live or how exactly the 30% discount will be calculated or deducted.
First Time Buyers will, though, be able to buy First Homes in the normal way, with access to conventional mortgages from lenders.
Back in February, the government said veterans will be prioritised as part of the Armed Forces Covenant, while councils will also be able to use the scheme for key workers in their area, including police officers, nurses, prison officers and teachers. Given the vital role frontline workers have played during the pandemic, this is likely to prove a popular initiative if indeed it can be delivered.
As we know from previous flagship housing schemes – most infamously the Starter Homes scheme
, which never got off the ground at all – actually delivering something is much harder than promising it.
The government says it will launch a Policy Paper this month, setting out its plan for comprehensive reform of England’s 70-year-old planning system, ‘to introduce a new approach that works better for our modern economy and society’.
How else can First Time Buyers get onto the ladder?
Before the pandemic hit, First Time Buyers had been one of the main buying demographics for a number of years, with a range of schemes targeted towards this group. That said, there are still many aspiring first time purchasers who are struggling to get on the ladder, and those who fear they will remain in the private rented sector forever.
In the last decade, the government has introduced a range of initiatives – some more successful than others – to improve the chances for First Time Buyers.
This has included stamp duty relief for First Time Buyers (with purchasers paying no tax on first homes worth up to £300,000), the Help to Buy
and Lifetime ISAs
, the Help to Buy equity loan
(where the government lends up to 20% of the home’s value, or 40% in London, on top of a 5% deposit put down by the buyer), Shared Ownership
, and Sadiq Khan’s ‘First dibs’ scheme in the capital. In the latter case, Khan has been working on a scheme that will restrict sales of all new-build homes in London up to £350,000 to UK buyers for three months, before any marketing to overseas buyers can take place.
We recently looked at what impact the lockdown had had on First Time Buyers
, and whether the post-Covid-19 world might be a more affordable one for this demographic, and also outlined why property buying looks like in the new normal.
First Time Buyers can also find out plenty of useful advice and information on our page here