Exit strategies for first homes scheme

tbo127

So the previous government schemes - help to buy and shared ownership required exit strategies. 

For help to buy, what you plan to do in 5 years when interest kicks in. 

For shared ownership, whether your aim is to staircase to 100% or remain at a certain share then sell. 

So what’s the exit strategy one needs to think about for the new first homes scheme. 

SDLT_Geek

tbo127 said:

So the previous government schemes - help to buy and shared ownership required exit strategies. 

For help to buy, what you plan to do in 5 years when interest kicks in. 

For shared ownership, whether your aim is to staircase to 100% or remain at a certain share then sell. 

So what’s the exit strategy one needs to think about for the new first homes scheme. 

You sell the property at the same discount at which you bought it.  But you have to jump through the hoops to find someone who is eligible to buy it from you and for the approval of the price.  https://www.gov.uk/first-homes-scheme  The formalities will be tied up in a planning agreement binding the property.

If there is no-one who can be identified who qualifies to buy at the discount, then you can sell on the open market, but making a payment to the local authority equivalent to the discount percentage.  (There is debate about whether you should be paying stamp duty land tax on that possible payment, as well as the discounted purchase price.)

tbo127

SDLT_Geek said:

tbo127 said:

So the previous government schemes - help to buy and shared ownership required exit strategies. 

For help to buy, what you plan to do in 5 years when interest kicks in. 

For shared ownership, whether your aim is to staircase to 100% or remain at a certain share then sell. 

So what’s the exit strategy one needs to think about for the new first homes scheme. 

You sell the property at the same discount at which you bought it.  But you have to jump through the hoops to find someone who is eligible to buy it from you and for the approval of the price.  https://www.gov.uk/first-homes-scheme  The formalities will be tied up in a planning agreement binding the property.

If there is no-one who can be identified who qualifies to buy at the discount, then you can sell on the open market, but making a payment to the local authority equivalent to the discount percentage.  (There is debate about whether you should be paying stamp duty land tax on that possible payment, as well as the discounted purchase price.)

Thanks. Is it the same for the Pocket Living scheme or other private Discount Market Sale schemes if you can’t find a buyer at the discounted price? 

tbo127

tbo127 said:

SDLT_Geek said:

tbo127 said:

So the previous government schemes - help to buy and shared ownership required exit strategies. 

For help to buy, what you plan to do in 5 years when interest kicks in. 

For shared ownership, whether your aim is to staircase to 100% or remain at a certain share then sell. 

So what’s the exit strategy one needs to think about for the new first homes scheme. 

You sell the property at the same discount at which you bought it.  But you have to jump through the hoops to find someone who is eligible to buy it from you and for the approval of the price.  https://www.gov.uk/first-homes-scheme  The formalities will be tied up in a planning agreement binding the property.

If there is no-one who can be identified who qualifies to buy at the discount, then you can sell on the open market, but making a payment to the local authority equivalent to the discount percentage.  (There is debate about whether you should be paying stamp duty land tax on that possible payment, as well as the discounted purchase price.)

Thanks. Is it the same for the Pocket Living scheme or other private Discount Market Sale schemes if you can’t find a buyer at the discounted price? 

It seems with the pocket scheme, they can never be sold above the discounted value and if a pocket home fails to sell after 6 months, it can be sold on the open market without the eligibility criteria. So then my question is, is there a need for an exit strategy in this case?