
First Homes Policy Overview and Eligibility Criteria
The First Homes initiative is a government policy aimed at promoting home ownership by offering properties at a discounted price to first-time buyers. The policy includes specific criteria for eligibility, such as income thresholds, mortgage requirements, and residency obligations. Local authorities are now required to consider First Homes as a material factor in planning decisions, impacting the development of exception sites.
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Presentation Transcript
First Homes Housing Board 3rd September 2021 Julie Fletcher SCDC
What are First Homes - First Homes is a government policy to promote home ownership. - Must be sold with a minimum of 30% against market price - The first sale must be at a price no higher than 250,000 (or 420,000 in Greater London) (Price caps only apply on the initial sale) - Sold to a person(s) meeting the First Homes Eligibility criteria - On their first sale, will have a restriction registered on the title at HM Land Registry to ensure this discount (as a percentage of current market value) and certain other restrictions are passed on at each subsequent title transfer. - Should account for at least 25% of all affordable housing units delivered by developers through planning obligations - If First Homes do not sell within 6 months of marketing, then these can be sold on the open market, free from restrictions, with the local authority receiving a capital receipt
Who is eligible ? Must be: First time buyers Combined annual household income not exceeding 80,000 (or 90,000 in Greater London) in the tax year immediately preceding the year of purchase Mortgaged to fund a minimum of 50% of the discounted purchase price Must be a buyers main residence and restrictions on lettings apply. LPAs or Neighbourhood planning groups can apply eligibility criteria in addition to the national criteria described above this would only apply for 3 months of marketing. This may involve lower income caps, a local connection test or criteria based on employment status (eg key worker).
Plan and Decision Making Written Ministerial Statement published on 24th May 2021 and PPG on 4th June outlining the planning changes. First Homes is now a material consideration for Local Authorities. The transition period has now started in accordance with the below. First Homes Policy does not apply to : - Local Plan and Neighbourhood plans submitted for examination before 28 June 2021 or that have reached publication stage by 28 June 2021 and subsequently submitted for examination by 28 December 2021. - Sites with full or outline planning permission already in place or determined before 28 December 2021. - Applications for full or outline planning permission where there has been significant pre-application engagement which are determined before 28 March 2022.
First Home Exception Sites - Can come forward on unallocated land outside of a development plan - Cannot come forward in areas designated as Green Belt or designated rural areas (Annex 2 NPPF). - Will need to evidence need for exception sites but does not need to be based on local/village need as is the case for Rural Exception Sites - Can deliver a small proportion of market housing if needed for viability - Applicants may alter the proportions of affordable housing to include small quantities of other affordable housing products. - Likely to impact on the number of Rural Exception Sites coming forward in the future for local people.
Customer Journey 4 1 2 3 Local authority receives application Customer reservation Pre-Sale set up Customer enquiry Builder submits application to local authority Checks against eligibility criteria Eligibility criteria Homes identified Pre-sale valuations Marketing Qualification process identifies likely customer Customer selects conveyancers Confirms customer eligibility and issues Authority to Procced 6 7 8 5 Authority to Exchange Authority to Proceed Legal completion Mortgage offer produced Conveyancer confirms valuation control Conveyancer submits legal undertaking to local authority that it is a compliant transaction. Local Authority issues Authority to Exchange. Exchange of Contracts Conveyancing begins following standard instruction pack Customer moves in Customer pays deposit Conveyancer carries out final legal confirmation and provides to local authority. Local authority receives and updates records Conveyancer proceeds to exchange Mortgage application submitted to lender, lender values
First Homes in South Cambridgeshire Pilot scheme in Great Abington S.106 Scheme that was previously delivering four one bedroom homes to be sold as the Mayor s 100K homes to be swapped to First Homes. Completion likely to be October 2021 Regular meetings with MHCLG, Homes England and Laragh Homes MHCLG & Homes England to support us through the process Deed of Variation submitted follows MHCLG standardised S.106 wording. Property valuations undertaken Looking to achieve 40% discount because of exceptional circumstances
Homes England Early Delivery Programme 2021-2023 Invitation to Tender published 10th August 2021 ends 13 September 2021 To deliver 1,500 First Homes via 2021-2023 Early Delivery Programme Seeking house builders to offer plots for sale as First Homes from their existing market sale homes production Will fund the 30% discount Homes must be completed by 30 June 2023
SCDC/City Policy Position Advice from Legal to treat Ministerial Statement and NPPG as policy which we should start to implement now Going forwards all new applications will need to be seeking 25% First Homes, subject to transitional arrangements Implications for other tenures. Current policy 70% Affordable Rent/30% Shared Ownership. Will mean a scheme of 100 homes, 40 of which to be affordable. 10 will be First Homes, 21 Affordable Rent and 9 Shared Ownership. A loss of 7 Affordable Rented Homes which is our highest priority Working towards an overarching policy for Affordable Routes to Home Ownership Annex to the Greater Cambridge Housing Strategy Consider local criteria Discount; Local Connection; Key Workers Timescale likely to be Summer 2022