What help does the Government give to first-time buyers?

What is the First Homes scheme?

The First Homes scheme offers first-time buyers in England discounts of 30% to 50% off the market value when purchasing a new-build home. To be eligible, you must be 18 or older, a first-time buyer, able to get a mortgage for at least half the discounted price and earn £80,000 a year or less (or £90,000 or less if the property is in London).

If buying jointly, all applicants must meet the first-time buyer criteria. Your joint income cannot exceed £80,000 a year (£90,000 in London). This is calculated based on your total earnings from the previous tax year. 

What are the eligibility rules?

Some councils add local eligibility rules, e.g. prioritising key workers or those already living locally. These rules only apply for the first 3 months a property is listed. Special exemptions also exist for armed forces members and families.

Under the scheme, developers must offer eligible buyers new-build homes with at least 30% off the market valuation. Unlike shared ownership, there is no rent payable. An independent surveyor confirms the appropriate discount was applied based on market value.

The maximum purchase price after discount is £250,000, or £420,000 in London. Councils may set lower caps. While owners can renovate or improve their home, strict rules govern re-sales and lettings to preserve discounts.

For more information on the scheme and eligibility rules - https://www.gov.uk/first-homes-scheme

How do I find a suitable home?

As a first-time buyer, you can search for First Homes properties advertised in your area by developers or estate agents. You should carefully assess whether you meet all the eligibility criteria at both national and local council levels. Pay particular attention to maximum income thresholds based on previous tax year earnings, and any priority groups identified by your local authority.

What happens when I want to sell?

You can usually only sell the property to someone who is eligible to buy a First Home. The scheme carries on to the new owner at the point of sale and therefore the discount applied at the time of the new purchase (based on the home’s market value at the time of sale) must be passed on to the new owner to make the house buying process affordable moving forward. 

Take advice from a mortgage specialist.

This scheme provides an excellent opportunity for eligible first-time buyers to achieve home ownership. However, it is important to fully understand the specific local and national terms before proceeding, in particular income and purchase price limits. Seeking advice from both your council and mortgage provider is highly recommended when exploring or securing a First Home.

Please contact Kay or Nicki for more information or to see how we may be able to help you get on the property ladder.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.