With the rising cost of property, buying your first home is a goal that is feeling increasingly out of reach to many people. If you’re a first time buyer who is looking to get that first, important – yet challenging – step onto the property ladder, then the First Home scheme might be able to help you.
What is the First Home scheme?
The First Home initiative is a government scheme for first time buyers that will provide discounted new-build homes, or a second-hand property previously purchased through the scheme, to those who live in England and who might struggle to purchase one otherwise. The scheme offers a discount of at least 30% compared to the actual market value of a property, and could be up to 50% in certain areas (where house prices are significantly higher).
There is no requirement to pay the discount back, and when the property is sold, it is independently re-valued and the first home scheme discount applied again for the next buyer to benefit from. A 5% deposit of the total discounted property value is usually required (but this may vary between mortgage lenders) and you will have full ownership of the house.
While this particular first time buyer government scheme is eligible for everyone looking to buy their first property, some local authorities may give priority to key workers in professions including teachers, firefighters, paramedics, nurses and serving members and veterans of the armed forces. The council can also choose to prioritise applications from people who already live in the local area or from those on lower incomes. You can read more about the eligibility of the First Home scheme below.
Who is eligible for the First Home scheme?
In order to qualify for the First Home scheme you will need to:
- Be 18 years old or older.
- Be a first time buyer (if you are purchasing a house with a partner they will also need to be a first-time buyer).
- Have a total household income not exceeding £80,000 (£90,000 in London).
- Be buying a new-build house that does not cost more than £250,000 (or £420,000 in London) after the discount has been applied OR be buying a house that was previously sold under the scheme.
- Be buying a property in your local area which you intend to live in – although this may not apply if you’re classified as a key worker.
- Be able to get a mortgage for at least half the price of the property. You can get a quick estimate of how much you are able to borrow by using this free first-time buyer calculator.
When does the First Home scheme start?
The initial First Home scheme began back in 2021.The government is now delivering a national programme of up to 1,500 First Home properties in up to 100 locations across England.
Eligible First Homes are also beginning to become available on new construction sites across England as developers incorporate them into their building plans, and this is due to increase in the future.
How to apply for the First Home scheme
There will be a limited number of First Home eligible plots in almost all new housing developments when the scheme is more established in the near future. To apply you need to check if the developer is including any First Home plots – if they are and you meet the eligibility criteria then you can apply through the builder.
When First Homes begin to be sold by previous owners, then you will need to apply through the estate agent who is selling the house. To find out more you can visit the government First Homes scheme website.
Buying your first home can be an overwhelming process, which is why it’s always a good idea to seek independent advice to help you understand all your options and guide you through the process. Key Solutions believe that taking out a mortgage should be easy, and have helped secure thousands of great mortgage deals for first time buyers. They can also help you understand all the different first time buyer government schemes so you can decide what’s best for your circumstances.
If you’d like help getting on the property ladder, then contact our friendly team or if you’d like to find out more, take a look at our Mortgage Guide for First Time Buyers.
