The newly announced First Homes scheme will offer qualifying first time buyers up to 50% discount on a new home.
First Homes is designed to help key workers and young people the chance to get onto the property ladder by helping them to buy at a substantial discount to the market value.
The scheme follows April's launch of government supported 95% mortgages and will replace Help to Buy, which expires next year.
It is designed in particular to address the problem faced by those who cannot afford homes within their local community. First Homes will help them to buy close to where they live and work.
The government will foot the bill for a 30% discount. Local authorities will be able to make a case for an additional 20%, depending upon demand and budgetary constraints. There is a cap on the value of qualifying properties - £420,000 in London, £250,000 elsewhere.
A pilot scheme has been launched in Bolsover in the East Midlands, with an additional 1,500 homes being made available by year-end. Thereafter, the government intends that 'at least' 10,000 properties will be made available each year.
It is not just the first wave of buyers who will benefit. Properties will retain their First Home status, with owners obliged to sell on at the same discount as they initially received.
The scheme will help by offering homes at a discount of at least 30% compared to the market price.
A number of big lenders have indicated their willingness to provide low deposit mortgages for thos looking to take advantage of the scheme.
The initiative will be welcomed with open arms by qualifying applicants, but, given the limited numbers involved, First Homes is unlikely to have any measurable effect on the first time buyer market, property resales or rentals.