Local authorities have urged the Government to ensure that the proposed First Homes scheme does not come at the expense of providing ‘affordable’ homes for rent.

Housing secretary Robert Jenrick today announced a consultation on a scheme that will see a discount of nearly a third on a proportion of new homes for first-time buyers.

This will lower deposit and mortgage requirements, and help people get onto the housing ladder.

Veterans will be prioritised as part of Armed Forces Covenant and councils will also be able to use the scheme for front-line workers in their area such as police, nurses, prison officers and teachers.

‘First Homes will be genuinely life-changing for people all over the country looking to buy their first home,’ said Mr Jenrick.

‘I know that many who are seeking to buy their own home in their local areas have been forced out due to rising prices. A proportion of new homes will be made available at a 30% market discount rate – turning the dial on the dream of home ownership.

‘The discount will be passed on with the sale of the property to future first-time buyers, helping thousands more people in years to come and ensuring local communities can stick together.’

The average price of a newly-built home in England is £314,000. Under First Homes, a property sold with 30% off this price would deliver a £94,000 saving and take more than £18,000 off a 20% deposit.

Paula Higgins, chief executive of the Homeowners Alliance, commented: ‘We know that first-time buyers will welcome the opportunity to buy a good quality home at a discount in their local area.

‘We look forward to contributing to the consultation and working with the government to ensure that the scheme does what it says on the tin - more high quality and affordable local homes for current and future first-time buyers.’

Cllr David Renard, housing spokesman at the Local Government Association (LGA), said that councils welcomed measures that enable home ownership. However, he emphasised that the scheme must not ‘come at the expense of providing truly affordable homes for rent.’

‘Not everybody is ready to buy and we will be making the case in this consultation that local areas will need discretion on the number of First Homes required in new developments,’ he said.

‘This will allow councils to ensure a mix of homes – to rent and buy – are available and affordable to people that need them.’