Labour’s first-time buyer scheme faces Eligibility concerns
A new analysis suggests that fewer than one-third of homes will be eligible under Labour’s “Your First Home” scheme, designed to assist first-time buyers. The initiative offers interest-free loans for new build properties to individuals or couples with a combined income of £110,000 or less.
Research from SAM Conveyancing, published in The Times, indicates that only 30 percent of homes will meet the scheme’s criteria. The property company’s survey of 285 local authorities found that property price caps are below the average cost of new builds in 264 areas. In 97 local authorities, less than a quarter of homes qualify.
Andrew Boast, chief executive of SAM Conveyancing, advocates for expanding the scheme to include all homes. “Limiting Your First Home to new builds was always going to restrict where first-time buyers could use it, and the price caps show just how tight that restriction is,” he stated.
The situation is particularly stark in Oxford, where none of the 66 new build properties sold in the last two years fall under the £415,000 cap, compared to an average new build price of £777,867. In Worthing, only one of 90 new builds would be eligible, with a government cap of £300,000 and an average new build cost of £409,472.
Central London areas like Westminster, Kensington and Chelsea, and the City of London have the highest price caps, reaching £650,000. Eligibility rates are extremely low: 3.6 percent in Islington, 3.8 percent in Westminster, 5.3 percent in Hammersmith and Fulham, and 5.6 percent in Kensington and Chelsea. Melton boasts the highest proportion of eligible homes, with 35 percent of new builds below the £300,000 cap.
A government spokesperson defended the scheme, stating it is “specifically designed to target support to those who need it most.” They added that the analysis doesn’t account for the type of new build homes sold or whether they would be purchased by first-time buyers. The government claims that industry estimates suggest almost half of new build homes sold in England last year and two-thirds of new build flats would be covered by the price caps.
The price caps are calculated by adding 10 percent to the median price paid by first-time buyers and rounding up to the nearest £5,000. The government anticipates the scheme will help 70,000 people purchase homes and save hundreds of pounds monthly, requiring a minimum deposit of 2.5 percent.
Mr. Boast suggests using an independent valuation for equity loans on existing homes to provide buyers with more options and help control prices.
Source
“Concerns only a third of homes could be eligible under Labour’s new scheme for first-time buyers”
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