Home builders invited to bid for share of £150m first homes package

Home builders across England can today (11 August 2021) bid for their share of a £150m package by offering plots for sale as First Homes, the flagship government scheme aimed at first-time buyers and key workers.

House builders are being invited to work with the government to deliver First Homes across the country in the coming months, with the aim of delivering 1,500 homes by March 2023.

Ministers claim that First Homes helps local first-time buyers and key workers onto the property ladder by offering homes at a discount of at least 30% compared to the market price. The same percentage will then be passed on with the sale of the property to future first-time buyers. This means homes will always be sold below market value – aiming to benefit local communities and families for generations to come.

The contract award will give housebuilders the opportunity to engage with local councils and mortgage providers, understand the expected level of customer demand and to learn more about the delivery process ahead of the full roll out through planning.

Today’s package follows the initial introduction of First Homes earlier this summer, where local sites were opened up in Bolsover, East Midlands, developed by Keepmoat Homes, and Cannock, West Midlands, developed by Vistry Partnerships. Leeds Building Society recently received the first mortgage application for a First Homes property as more homes come onto the market.

Housing secretary Robert Jenrick said: “It is great to see the First Homes scheme gaining momentum and I am happy to invite house builders to deliver this flagship house building programme across the country. It will support local communities and give local people a greater chance of getting on the housing ladder and having a place which they can call their own. Just as importantly, homebuilders of all shapes and sizes will now be able to benefit from this scheme while helping first-time buyers and key workers onto the property ladder.”

Peter Freeman, chair of Homes England, said: “The Early Delivery Programme is a great opportunity for housebuilders, housing associations and the wider development sector to get to grips with First Homes. We look forward to working with partners to help aspiring homeowners realise their ambitions and own their own home.”

Councils will also be able to prioritise the homes for keyworkers such as nurses and teachers who have been looking to get on the housing ladder while supporting their community throughout the pandemic.

The bidding invitation has sparked leading industry figures into calling for policymakers to seriously consider introducing legislation that will require builders to commit to using modern methods of construction (MMC) to deliver a good proportion of its pipeline under the scheme. This, they say, will ensure discounted homes are highly energy-efficient and high-quality, avoiding the need for costly retrofitting programmes later down the line.

Joseph Daniels, CEO and founder at modular housing and technology company Etopia Group, and also a special adviser to the government on decarbonising housing and construction as part of the BEIS-backed Construct Zero programme, was amongst the first to respond.

He said: “With over 1.1 million families sitting on council waiting lists for housing and rapid house price inflation locking many first-time buyers out of ownership, there has never been a greater need to deliver high-quality, affordable homes at pace. As the government begins kicking off the bidding process for its First Homes scheme, policymakers should seriously consider introducing legislation that will require builders to commit to using modern methods of construction (MMC) to deliver a good proportion of its pipeline – as has happened with the £11.5 billion Affordable Housing Programme. Precision-engineering techniques mean that homes manufactured in factories are more energy-efficient, higher quality and can be delivered in half the time of traditional methods.” 

Housebuilders can click here for more information on the invitation to tender (ITT), available on Procontract.