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This reimbursement should be up to the value of the discount, as a percentage of the sale price and net of any additional Stamp Duty liability that may be incurred from the sale by the seller. If the remaining proceeds from the sale of the property are not sufficient to cover the total percentage value of the discount, then all of the remaining proceeds should be transferred to the relevant authority. Further detail on how this should be calculated, including worked examples and further detail on when additional Stamp Duty liability may be incurred, will be published and appended to this Guidance in due course. A Mortgagee Exclusion Clause should be present in all planning obligations which secure the delivery of First Homes, to ensure appropriate protection for lenders and encourage competitive lending rates.
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This means homes will always be sold below market value and local communities will benefit for generations to come. First Homes will be for first-time buyers only, and councils will be able to prioritise them for local people and for key workers. In addition to capturing the same amount of value towards affordable housing as the existing policy, where onsite affordable housing is required, a policy compliant application will have a minimum of 25% of affordable housing units on-site as First Homes. Homes meeting the above minimum criteria can be sold as First Homes and should be considered to meet the definition of ‘affordable housing’ for planning purposes. A developer should be able to show that the homes they intend to sell as First Homes will meet the above criteria. Gives first time buyers the option to buy a share of their home (between 10% and 75%) and pay rent on the remaining share.
That same percentage will then be passed on with the sale of the property to future first-time buyers, meaning homes will always be sold below market value – benefitting local communities, key workers, and families for generations to come. The policy does not apply to applications made under section 73 of the Town and Country Planning Act 1990 to amend or vary an existing planning permission unless the amendment or variation in question relates to the proposed quantity or tenure mix of affordable housing for that development. If an applicant wishes to amend a planning application to include First Homes which is already submitted and likely to be granted before these dates, the local planning authority should be flexible in accepting First Homes as an alternative type of tenure. If a local authority has an up-to-date policy on cash contributions in lieu of onsite contributions, then a planning application compliant with national policy will align with this approach.
Where can First Home exception sites come forward?
When a mortgage or home purchase plan offer is being considered, the lender will also value the property in the usual way. The sale price of the property should not change unless this valuation is lower than the agreed sale price. In this case, the lender’s valuation should act as a price cap for the sale of the property. JamesEdition can help you find the home that match all the preferences for your dream home. Use filters and narrow your search by price, number of bedrooms, bathrooms, and amenities to find homes that fit your criteria. Is a loan from the government that you put towards the cost of buying a newly built home.
Our new Affordable Homes Programme aims to deliver around 180,000 homes with around half of these available to purchase through shared ownership. A policy compliant planning application should seek to capture the same amount of value as would be captured under the local authority’s up-to-date published policy. It is important that agreements to secure First Homes do not prevent homes from being sold for a long period and there may be circumstances where a suitable buyer for a First Home cannot be found, even when the local restrictions have been removed. Therefore, a local authority should include provisions in a section 106 agreement which allow a developer or First Home owner to sell a First Home on the open market and remove the title restriction, as long as certain conditions are met. The Mortgagee Exclusion Clause should provide that, in the event of the Mortgagee enforcing their security against the property, the property can be sold to anyone on the open market at open market value and the property will cease to be a First Home. Meanwhile, the package also includes a £9.1 million fund for local authorities to support the delivery of garden communities in areas such as Chelmsford, Dunsfold and Corby.
Government activity
Overall, the Garden Community programme has the potential deliver over 350,000 new homes by 2050. Each individual local authority can set a local connection test to determine who should be prioritised for the scheme based on the needs’ of their communities. Our commitment is shared across all necessary stakeholders, as underscored by the high level of co-operation between lenders, government, local authorities and developers in helping drive the First Homes scheme forward. These homes will be locked in for perpetuity to first-time buyers and key workers from their local area – making them an asset to both their owners and the wider local community. First Homes will also support our fantastic key workers who are looking to get their first foot on the housing ladder – from front-line doctors and nurses to delivery drivers and supermarket staff – by giving many of them the chance to buy a home at a 30% discount.
Funding will help unlock land to help deliver more new homes and vibrant communities for people to live and work in. Keepmoat Homes is one of the UK’s leading home-builders for first time buyers so it is great to be part of this initiative which will help even more people realise their dream of owning their own home. This is a true example of how working in partnership helps to support local people and communities. Thanks to First Homes, we will offer more homes to local people and families, providing a route for first-time buyers to stay in their local areas rather than being forced out due to rising prices. First Homes follows on from the 95% mortgage guarantee scheme which helps first-time buyers secure a mortgage with just a 5% deposit and the government’s ‘Own Your Home’ campaign showcasing the range of flexible home ownership options available. Planning Inspectors should consider through the examination whether a requirement for an early update of the local plan might be appropriate.
These minimum discounts should apply to the entire local plan area and should not be changed on a site-by-site basis. First Homes exception sites can deliver a small proportion of market housing, provided that it can be demonstrated that this is necessary in order to ensure the overall viability of the site. Local authorities and neighbourhood planning groups can set policies that specify in further detail the proportions of market housing would be considered acceptable, and under what circumstances. For areas that do not meet the criteria for transitional arrangements, new development plans, including local plans and neighbourhood plans, should take account of the new First Homes requirements from 28 June 2021.
The Community Infrastructure Levy Regulations make provisions for charging authorities to give relief or grant exemptions from the levy. These regulations allow developers of First Homes to obtain an exemption from the requirement to pay CIL. Purchasers of First Homes, whether individuals, couples or group purchasers, should have a combined annual household income not exceeding £80,000 (or £90,000 in Greater London) in the tax year immediately preceding the year of purchase. A purchaser of a First Home should be a first-time buyer as defined in paragraph 6 of schedule 6ZA of the Finance Act 2003 for the purposes of Stamp Duty Relief for first-time buyers.
First-time buyers can find the right scheme for them via the Own Your Home website which provides a single gateway for all routes to home ownership. The campaign highlights the support available to help make home ownership a realistic and affordable option for more people than ever. 23 December 2021 Amended Paragraphs 003 and 010 to add links to the template planning obligations. There should also be a requirement, within the agreement, that the home is marketed for at least 6 months in total and that all reasonable steps have been taken to sell the property . In circumstances where this restriction needs to be removed, such as an invocation of the Mortgagee Exclusion Clause, the Local Authority will be required to apply to enable the removal of the restriction. C) the home is sold to a person who meets the First Homes eligibility criteria, as set out in the first 2 paragraphs under First Homes eligibility criteria.
Authorities should consider the application of these discretions carefully and ensure they do not limit the eligible consumer base to the point that homes become difficult to sell. The price cap of £250,000 (or £420,000 in Greater London), however, applies only to the first sale and not to any subsequent sales of any given First Home. The government working with several regional and national lenders to deliver the first of these homes in Bolsover and elsewhere in England.
If you’re eligible for an equity loan, you can borrow up to 20% (40% if you’re in London) of the market value of a new home. First Homes exception sites can come forward on unallocated land outside of a development plan. They cannot come forward in areas designated as Green Belt, within the Broads Authority, or in designated rural areas as defined in Annex 2 of the National Planning Policy Framework. Where a mixture of cash contributions towards affordable housing and on-site units are secured, 25% of the overall value of affordable housing contributions should be applied to First Homes. Local connections may include current residency, employment requirements, family connections or special circumstances, such as caring responsibilities.
However, the First Homes Written Ministerial Statement does give local authorities and neighbourhood planning groups the discretion to require a higher minimum discount of either 40% or 50% if they can demonstrate a need for this. As part of their plan-making process, local planning authorities should undertake a housing need assessment to take into account the need for a range of housing types and tenures, including various affordable housing tenures . Specific demographic data is available on open data communities which can be used to inform this process. The assessment will enable an evidence-based planning judgement to be made about the need for a higher minimum discount level in the area, and how it can meet the needs of different demographic and social groups. For example, a development of 80 homes in a local authority with a policy for 30% affordable housing would be expected to provide 24 affordable homes to comply with local plan policy.
Once a minimum of 25% of First Homes has been accounted for, social rent should be delivered in the same percentage as set out in the local plan. The remainder of the affordable housing tenures should be delivered in line with the proportions set out in the local plan policy. Where cash contributions for affordable housing are secured instead of on-site units, a minimum of 25% of these contributions should be used to secure First Homes. This could be achieved, for example, by acquiring additional First Homes from market development, paying the developer a sum to offset the discount from market price, and securing the tenure through section 106 planning obligations.
25% of these affordable homes would be expected to be First Homes, which would equate to 6 First Homes (7.5% of the total number of homes provided). The expectation that at least 10% of homes on this site to be available for affordable home ownership would equate to 8 homes so an additional 2 affordable home ownership products would be expected. As part of the section 106 agreements, local authorities or neighbourhood planning groups can apply eligibility criteria in addition to the national criteria described above. This may involve lower income caps (if this can be justified with reference to local average first-time buyer incomes), a local connection test, or criteria based on employment status. First Homes are designed to allow people to get on the housing ladder in their local area, and in particular to ensure that key workers providing essential services are able to buy homes in the areas where they work. Authorities can therefore prioritise key workers for First Homes, and are encouraged to do so, especially if they have an identified local need for certain professions.
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