Conservative Party promises more help for first-time buyers

The Conservative Party Conference has just finished with a headline housing pledge that, if re-elected, they will provide further help to get first-time buyers onto the property market in England.

They propose to do this by building 100,000 new ‘starter’ homes on brownfield sites in England which will be available to buy at 20% below the market rate. The discount will only be available to first-time buyers under the age of 40 and they must be able to provide a deposit if at least 5%.

Extending Help to Buy

The new scheme will be an extension of the current Help to Buy mortgage scheme which has been in operation since October 2013 throughout the whole of the UK. The 20% discount will be achieved by:

• the government providing a 20% equity loan to buyers of the new build properties,
• building on brownfield sites which are cheaper than other types of land,
• making the properties exempt from some taxes, and
• removing the zero carbon homes standard, which was intended to improve the energy efficiency of new builds. This standard is due to commence in 2016, but homes built under this new scheme will be exempt.

David Cameron has stated that any properties made available under the scheme "...can't be bought by foreigners, they can't be bought by buy-to-let landlords, they can't be flipped round in a quick sale. They can only be bought by hard working people under the age of 40."

Whilst this may be good news for first-time buyers in England there is real concern about the removal of the requirement on developers to build social housing as part of any development. Currently all housing developers are required to ensure that a proportion of new homes are ‘affordable’.

Rent to Buy

The Conservatives also announced a new Rent to Buy scheme. The scheme is intended to help young people save for a deposit before they buy their home by firstly being able to rent the property at a cheaper level. Housing associations and social landlords will be given £400million worth of cheap loans to build new homes. These properties will then be let at below market rents (capped at 80% of local market value) for seven years. The tenant will then be able to buy the property. The scheme will be aimed at single people earning £33,000 or less and couples on up to £66,000.

It is not clear as to whether any of these proposals will also be introduced in Northern Ireland.