First £100K Homes to be offered at a discount of over a third of market value
Market rate valuations on the first eight £100K Homes at Fordham, Cambridgeshire have revealed they were offered to buyers at a discount rate of 35%.
The ground floor flats were valued at £150K and the first-floor flats at £155K but will be sold to the prospective first buyers at £100,000. This means that all subsequent buyers will purchase the homes at a discount over a third of the market value when the original owners choose to sell.
£100K Homes are 100%-owned one-bedroom properties for local working people who fit the key criteria of being unable to afford to buy on the open market, having a strong local connection to the area – in this case Fordham – and not already owning a home.
They are aimed at giving people who live or work in Cambridgeshire and Peterborough a step on the housing ladder, while enabling them to live to close to where they work.
£100K Homes are part of Mayor Palmer’s response to the housing crisis which is seeing many people locked out of the property market and forced to pay expensive private rents or are stuck living at home with parents to save costs.
The Combined Authority has worked hard to select buyers for the eight homes and carry out necessary checks as quickly as possible and the purchasers currently going through the conveyancing process.
Mayor James Palmer said:
“We need new solutions to the housing crisis. The announcement of the market value of these first £100k Homes shows both the scale of the affordability problem and the strength of our proposed solution. It is simply brilliant news that we can provide such a significant discount on these properties, and give some hard working local people a real chance at a home of their own.
“The housing market currently shuts out hardworking people who do not have access to significant savings or outside finance. I ant to change this, and give those who have done everything right a helping hand and a first step on the homeownership ladder. That is what I am trying to achieve with £100K Homes.”
£100K Homes are allocated on a points system, designed to give a fair representation of an applicant’s local connection to the area. Those with the strongest local connection to Fordham, either by living or working there or having strong family connections, will be the first to be offered the opportunity to purchase a £100k Home.
The Mayoral Combined Authority continues to work with developers across the region to bring forward more £100k Home with new sites coming forward in Great Abington, Ely and Cambridge City. Those who are not eligible for Fordham properties will remain on the waiting list for new builds that come forward in other areas.
£100K Homes are made available at a discount to their full market value through a legal covenant which stays with the property. The new purchaser would also be found through the £100K Home scheme, and they would also benefit from the same percentage discount on the open market value of the property the initial buyer received.
Rather than their monthly payment disappearing into the bank account of their landlord, those who buy a £100K Home own it outright and build their equity as they repay their mortgage. As the monthly mortgage payment is expected to be lower than the equivalent private rent amount, £100K homeowners also have the chance to save more each month; savings that can go towards the deposit on their next homes, in the open market.