As a wannabe first time buyer, I've been having some 'thoughts' about this First Homes announcement yesterday (Please stand by for a thread full of my scorching hot takes).

Help to Buy (sort-of ending in 2021) works because buyers have the money to buy their home at market value (just part of it comes from the govt). But First Homes will be sold ‘at a discount’. So is the govt going to stump up the 30% shortfall w/ direct payments to developers?

That’s not a great look politically (not helped by things like Desmond-gate), and you can see housebuilders steering clear of it because of the real possibility that the policy/the entire government will change during the 18 months-ish it takes to build a house.

More likely, the government will provide public land, tax incentives etc so it’s cheaper for developers to build these homes, on the condition that they pass on some of the saving to buyers. That could work.

A risk is that the homes will be built in a way that makes them worth only 70% of local market value, because that’s what the people who will live in them are paying. Which isn’t *necessarily* a problem – I’d take a pretty basic first home as a way to get on the ladder.

But you can see corners being cut, especially when tied in with the new rules on turning vacant commercial/residential buildings into new homes without full planning permission.

The other issue is what happens when buyers want to sell up and buy a bigger home.

New build homes come at a premium, and if it’s not brand new any more it knocks a bit off the value. So why should the next buyer pay the same 70% of market value you paid for a home that’s been lived in for, say, five years?

Also, unless property values have increased hugely, you’re unlikely to buy a new, bigger home with the 70% of market value you get back. So you’re stuck there, unless you have the capacity to save loads, which key workers, young families etc probably won’t.

To be fair, resale was also a problem with the Help to Buy equity loan, particularly if developers over-valued their properties in the first place because they knew the buyer had gov’t help. It's great to get on the ladder, but you don't want to be stuck on the first rung.

Anyway, TL;DR: I’m still not buying a house until I’m 40.