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Government speeds up plans for FirstBuy shared equity scheme

The government has responded to housebuilders’ pleas for quicker help for first-time buyers by agreeing to implement the FirstBuy scheme two months ahead of schedule.

The shared equity deal will now be available to consumers by July, allowing housebuilders to market the scheme over the summer.

The original plan was to launch in September, but the Communities and Local Government Department confirmed it was aware of the need for urgent help for first-time buyers. Construction News first aired industry concerns last month (CN, 31 March, p16).

A CLG spokesman said: “We want to give the schemes the opportunity to market themselves over the summer to get things moving as quickly as possible.”

Major housebuilders welcomed the news. Ian Baker, group managing director of Galliford Try-owned housebuilder Linden Homes, said affordability had been a major stumbling block.

“Entering into contracts with housebuilders earlier than originally scheduled has shown that the government is willing to listen to industry and act quickly to address the affordability issue, which is encouraging,” he said.

But he warned the £250 million scheme would not diminish the need for an increase in the lending products available for higher loan-to-value buyers, especially on new-build houses.

A senior source at a major housebuilder agreed more could be done but said the scheme was nevertheless “shaping up to be a big help to the sector”.

He welcomed the news of quicker implementation, saying it was “just what the housebuilders wanted”.

FirstBuy is expected to help 10,000 first-time buyers over the next two years. It offers an equity loan of up to 20 per cent of the house price, funded equally by the Homes and Communities Agency and the housebuilder, leaving buyers needing only 5 per cent deposits to secure a mortgage.

Housebuilders were invited to submit sites for the scheme earlier this month. The deadline for entries is 19 May.

FirstBuy is open to sites across the UK, with £210m earmarked for England and £40m shared between Scotland, Wales and Northern Ireland.

 

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