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What is the First Homes scheme?

First-time homebuyers in England who otherwise wouldn’t be able to purchase one are given reduced homes through the First Homes scheme.
First-time buyers can purchase a new home in their neighbourhood under this programme for 30% less than the going rate.

This means that a typical new-build residence in England will save about £100,000 in savings.
Purchasing a first house is one of the most significant financial achievements—and difficulties—of life. You may read more about the First Homes program’s operation here.

How does the First Homes scheme work?

Under the First Homes programme, brand-new, fully-specified homes are built with the intention of selling them at a bargain.
After that, homes will be listed for sale with a minimum 30% discount. Local councils may, however, raise this reduction to a maximum of 50% in certain circumstances, such as in regions with extremely high real estate costs.
First-time buyers only may purchase these properties. If purchasing as a pair, neither spouse may have been a previous homeowner. If not, the properties are purchased and sold in the usual manner.

The home will be independently evaluated and the plan discount will be reapplied to the new value for the next owner if and when the first-time buyer decides to sell.
Future generations of first-time purchasers will continue to profit from this, as it will guarantee that properties are always sold for less than the asking price.

Who is eligible for the First Homes scheme?

You must be a first-time buyer to qualify for this scheme.

You’ll also need to buy within your local area, with the intention of living in the property (i.e. it cannot be a holiday home or buy-to-let).

Although the scheme will be open to people in every profession, certain professions will also take priority. These include serving members and veterans of the armed forces, and key workers, including nurses, police, firefighters and teachers. Finally, to ensure the scheme helps those most in need, the government has also listed some price caps.

These include:

Property price caps: After the discount, properties covered by the programme are capped at £250,000 for all of England. In London, a higher maximum of £420,000 is applicable.
Income ceilings for households: In England, the total income of buyers is limited to £80,000, and in London, it is restricted at £90,000. Nevertheless, for the first three months of the auction, local planning authorities will have the authority to impose lower caps.

Does this scheme make it easier to get a first-time buyer mortgage?

Under the programme, first-time homebuyers must finance at least half of the purchase price of their property using a mortgage or home purchase plan. The mortgage requirement will be lowered once the discount is implemented.
The government is aware that there is a modest market for loans on properties from discount markets, in part because there aren’t as many properties available.
These kinds of residences have historically required larger down payments from buyers or come with higher mortgage interest rates.

How do I apply for the First Homes scheme?

Below is an overview of the steps you need to take to apply for the First Homes scheme.

  • Contact the developer: Let them know you’re interested in buying a First Home. You can also ask an estate agent if you’re buying from a previous First Homes buyer.
  • Apply through the developer: They will take you through the necessary steps to submit your application or do it on your behalf. This will include proving that you are a first-time buyer, which a solicitor can do for you through land registry searches. You need to pay a fee if the First Home you want to purchase is a new build – if your application is unsuccessful, this will be refunded. 
  • Get the authority to proceed: If your application is successful, your local authority will send you an Authority to Proceed and Eligibility Certificate. You’ll need to give these to your conveyancer and mortgage provider (or broker) so that they can start next steps.