What is a discount market sale home?
Key takeaways
Discount Market Sale homes (DMS) allow eligible local buyers to purchase a new-build home at a fixed discount (usually 20–30%, sometimes up to 50%) from full market value. With a DMS home, buyers own 100% but it cannot be rented.
Eligibility varies and is subject to local authority criteria. This often includes being a first-time buyer, having a local connection, meeting income restrictions, and proving that affordability is a requirement to enable them to buy a home.
The discount on the home is permanent. This means that when sold in the future, it must be sold to another eligible buyer at the same percentage discount.
For many aspiring homeowners, especially first-time buyers, stepping onto the property ladder can sometimes feel out of reach. That’s where Discount Market Sale (DMS) homes come in, to help offer a more affordable solution to purchasing a new-build home.
What is a Discount Market Sale home?
Discount Market Sale (DMS) is a low-cost housing scheme that allows eligible buyers to purchase a new-build home at a reduced price. It is a fixed discount, typically between 20% and 30%, though in some areas it can be as high as 50%, which is driven by local council criteria.
With a DMS home, buyers own 100% of the property, but at a reduced price. The discount is permanent, meaning that if the hold is resold in the future, it must be sold to another eligible buyer at the same percentage discount. This keeps the home affordable for the next buyer. Once a buyer has purchased a Discount Market Sale home, it cannot be sold on the open market for its full value.
How does the Discount Market Sale scheme work?
Discount Market Sale (DMS) is a locally driven, affordable housing initiative.
Here’s how it works:
During planning stages, housing developers and local councils collaborate to designate certain homes within new developments as being for sale below market value
Buyers apply through the developer or local authority, providing evidence of eligibility. Buyers will be required to check what homes are available and apply, demonstrating their ability to meet the criteria.
Once approved, buyers purchase the home at the discounted price using a mortgage and a deposit based on that reduced amount.
The buyer must live in the property, it cannot be rented out without permission
If the buyer chooses to sell the home in the future, the process repeats. The sale of the home must be at the same percentage discount as when it was originally purchased.
Who can buy a Discount Market Sale home?
Local councils play a key role in shaping DMS schemes, and therefore, eligibility criteria may vary by local authority. Generally, the eligibility is based on the following:
Must be a first-time buyer with evidence of no previous property ownership
Proof of local connection to the area
A household income within a certain limit
A demonstrated need for affordable housing, meaning the buyer cannot afford a similar home at full market value
Ability to obtain a mortgage for the discounted market price (as specified by the local council and developer based on local housing needs)
Some authorities may also give priority to key workers, such as teachers, nurses, and emergency service personnel.
What are the benefits of purchasing a Discount Market Sale home?
Buyers have access to a lower purchase price and a smaller deposit requirement
Buyers have full ownership from day one
Long-term affordability for local residents and aspiring future homeowners
Considerations when purchasing a Discount Market Sale home
While DMS homes are a great option, there are some restrictions to be aware of, such as:
Fewer mortgage lenders may support DMS purchases, so we recommend buyers seek advice from a mortgage specialist
Resale value is capped by the original discount
Buyers must comply with local council criteria, including restrictions on renting and property improvements
Strict eligibility criteria can exclude some buyers.
If you’re interested in finding out more information or need more help, speak to your local council or a mortgage adviser familiar with affordable housing schemes.
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Discover our wide choice of developments today and contact our Sales Executive to find out more about whether we’re offering discounted market sale homes in your area.
