First Homes Scheme
Buying your first-ever home can be both a daunting and expensive process. You’ve got your deposit, solicitors’ fees, survey fees, and furnishing an entire house to save up for. This, combined with the current cost of living, is making it nearly impossible for people to get on the property ladder. That’s where the first-time buyers scheme comes in. This is a type of first-time buyer discount established by the government, making it more achievable to purchase your first home.
What is the first home scheme?
The First Homes scheme is a government-funded initiative that allows first-time buyers in England to purchase a home for 30% below its market value. This could be either a new-build home or a resale property purchased through an estate agent that was previously bought under the First Home Scheme.
How do I know if I qualify?
To qualify for the first homes scheme, you must be:
- At least 18 years old
- Classed as a first-time buyer
- Only planning to live in this home (buy-to-let will not be possible)
- Able to get a mortgage for the share being offered
- Earning less than £80,000 a year before deductions
- Buying a home that will equal £250,000 or less after the discount has been applied (£420,000 for those buying in London)
Some developers may also set out other qualifying factors, such as local connections where the person applying for the First Homes Scheme already lives or works in the local area.
How does the First Home Scheme work?
If the home you have found is worth £250,000, and you are eligible for the first home scheme, you could receive a 30% (£75,000) discount. This means you would be able to purchase the property for £175,000 instead of £250,000, benefiting from:
- A lower deposit to save for / put down
- Lower mortgage repayments
- An easier step onto the property ladder in general
What is a first-time buyer?
A first-time buyer is anyone who hasn’t purchased or owned a residential property before. If you have owned commercial properties, such as an office or shop, you are still classed as a first-time buyer and will be eligible for the available schemes and discounts like stamp duty relief, 5% deposits, and the first homes scheme. If you have ever owned a home that you inherited through a family member, for example, you won’t qualify as a first-time buyer, even though you never purchased the property.
How to apply for the first homes scheme
To apply for the scheme, contact the new build developer of the property you want to purchase. They will then check your eligibility and, if you qualify for the scheme, offer affordable routes as part of the Section 106 agreement. This places restrictions on the use, sale, and title of the property to ensure that these remain in place at each future sale. This means that if a property has been purchased as part of the First Homes Scheme, the discount will be available to the next buyer, provided they are also eligible for the scheme.
How to find first home scheme houses
To find homes that you will be able to purchase through the First Homes scheme, there are a number of things you can do:
- Use search engines to search for first homes scheme houses in your area
- Contact the new build property developments you are interested in directly
- Check the websites of developments near you to see if they support the scheme
- Use sites like Zoopla or Rightmove for a more general search, and get in touch to enquire about the scheme
Do your research, get in touch with a developer and apply for the First Homes Scheme
The First Homes scheme is a great way for first-time buyers to get on the property ladder, making it more accessible and realistic for those who need extra support to purchase their first home. If there’s something you feel we haven’t covered, you can find lots of helpful information surrounding the First Home Scheme on the GOV.UK website, including more information on how the scheme works and how to apply.
