A scheme to help first time buyers get on the property ladder in the East Riding has seen younger people getting on the property ladder but has seen a slow down in it's take-up.
The First Homes scheme was introduced in 2021, it enables buyers to purchase a home at a minimum discount of 30% on the open market value. The discount is secured in perpetuity by a restriction on title at Land Registry. The maximum value of a First Home after the discount has been applied is £250,000
East Riding Council's Director of Asset Strategy - Claire Hoskins - says while take up was initially good, there has been a marked slowdown over the last 12 months.
There have been 49 First Home completed sales to date with a further 14 in the process of conveyancing.
Claire Hoskins says the take up by younger buyers has been strong.
First Homes are only available to first time buyers with a maximum household income of £80,000 in accordance with national criteria. In the case of a joint purchase, both buyers must be first time buyers. Buyers must obtain a mortgage or home purchase plan for a minimum of 50% of the discounted value and the home must be their main residence.
Local authorities have been able to choose to apply additional local criteria such as a local connection requirement, reduced household income cap or prioritisation of key workers, where they can evidence that this is needed in their area. in July 2022 East Riding's Cabinet approved the application of local connection criteria along with a reduced maximum household income of £70,000.
First Homes are sold directly by developers with the Council being responsible for checking the eligibility of applicants. The properties must be marketed for a minimum of six months.
Any local eligibility criteria are removed after the first three months if a suitable buyer is not found. If a First Home in unsold after six months, the developer can ‘flip’ the property to become a market unit and pay an off-site contribution to the Council instead. First Homes have proven to be a popular option for first time buyers in East Riding and have generally sold quickly.
East Riding Council say that the household income for purchasers of a First Home on average has been around £46,900 per year and just over 70% of sales have been joint purchases. The average age of First Home buyers has been 27 years old.
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