It is early days for the Government’s First Homes scheme, with the initial pilot only launching on 4th June, but what effect can we expect to see on demand for housing or the number of property transactions? Read on to find out how mortgage tech can help the market to cope with any surge in demand.
As revealed in its 2020 announcement, the Government’s First Homes scheme aims to help address housing affordability concerns following the spike in average house prices. The scheme will help first-time buyers to purchase a home by offering properties at a discount of between 30% and 50% against the market price. This discount will also be honoured for other first-time buyers in future sales to ensure the property is always sold below market value.
The 4th June this year saw the launch of the first phase of the scheme, with a small number of properties listed in Bolsover in the East Midlands. The Government has also shared plans to add a further 1,500 properties from the autumn and deliver at least 10,000 homes a year, subject to demand.
These are bold plans indeed, but what could the impact be on the market? With average house prices rocketing by 10.2% over the year to March 2021, demand for the scheme is likely to be extremely high. However, research from Savills suggests that buying an average two-bedroom flat under the scheme would still be unaffordable for 88% of households in London, and 68% in some parts of the South East, suggesting that demand for the scheme could vary by region. In addition, with reports suggesting that just 12 properties were listed as part of the initial pilot in Bolsover, supply will have to be bolstered before we see any significant impact on market activity.
Nonetheless, the First Homes scheme looks to be an exciting and much-needed form of support for those looking to make their first step onto the property ladder. If 10,000 homes are to be included as part of the scheme per year, brokers will need the most efficient tech to help cope with the surge in demand. This includes powerful sourcing tools, automatic or ‘one click’ DIPs and strong CRM systems to help make the homebuying journey more efficient for all involved.
Despite the scheme still being in the early stages, the time to arm yourself with the most powerful tech is now. Want to see how ours can help cut inefficiencies in your day-to-day work? Book your demo today to be guided through our platform by our talented team!