First Homes – Interim Position Statement

2.1 The key requirements of First Homes delivery are:

a) At least 25% of affordable homes delivered on each site must be First Homes. Some exemptions apply, including developments that provide solely Build to Rent homes, 100% affordable housing schemes, rural exception sites, developments that provide specialist accommodation for a group with specific needs such as the elderly, and self-build developments.

b) Purchasers must be first time buyers.

c) The discount must be at least 30% of open market value. Local authorities can set policies that seek discounts of 40% or 50% if they can evidence the need and viability through the Local Plan process.

d) The discount and first time buyer eligibility requirement will be held in perpetuity and secured through legal mechanisms, i.e. when any First Homes are sold to subsequent purchasers the same level of discount and first time buyer eligibility criteria will apply.

e) There will be a price cap for qualifying properties, and the maximum purchase price after the discount will be £250,000.

f) Local authorities can apply their own local connection criteria and other criteria such as giving priority to keyworkers.

g) Purchasers are eligible to purchase a First Home if they have household income of less than £80,000 (this is the same as the qualifying criteria for shared ownership housing).

h) Local connection criteria can only be applied for the first 3 months of marketing, after which a property can be sold to any purchaser from anywhere in England, subject to meeting the criteria around household income, first time buyer eligibility, and with the discount still being held in perpetuity.

i) A First Home must be a purchaser’s only home.

k) At least 50% of the discounted value of the property must be financed via a mortgage or other similar form of finance.

l) In the event that a First Home cannot be sold to a qualifying purchaser within 6 months of marketing, the property can be sold as an open market home and the seller pays the council a cash contribution in lieu of the 30% discount. This requirement will be secured in the Section 106 agreement.

m) House values should be set by developers obtaining valuations from a registered valuer acting in an independent capacity, and any valuations should be in accordance with the Royal Institution of Chartered Surveyors red-book valuation guidance for new-build homes. When the home is resold in future, the seller should secure a valuation in the same way in accordance with RICS’s guidance. Where First Homes do not sell, a local authority may 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.

n) The Community Infrastructure Levy (CIL) Regulations 2010 (as amended) 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. There is a CIL in operation in the Wycombe, Chiltern and South Bucks areas of the county.