The First Homes Scheme is a new Government initiative that starts on 28th June 2021. However, seeing as the homes that qualify for these schemes are still yet to be built, it is unlikely we will see any completions until 2022.
What is the First Homes scheme?
The First Homes Scheme is the government’s latest affordable housing promise. The primary objective is to offer reduced properties to first-time buyers purchasing new-build flats or houses in their local area. Allowing them to remain living near friends, family, or close to where they work.
Under the scheme, buyers will be able to get on the ladder for at least 30% less than market value. However, depending on the council the discount could be up to 50% of the purchase price – this will be considered on a case-by-case basis.
Who can apply for the First Homes Scheme?
The scheme is only for first-time buyers and will not apply in Wales or Scotland. To qualify both applicants will need to have never owned a property before and have a maximum income of £80,000 (£90,000 in London). Although the scheme is open to all that qualify, local authorities will also have the flexibility over who qualifies for the first three months. Meaning that those in certain professions such as key workers and serving armed forces personnel will take priority.
If you can afford to buy one of the homes with the discount and your savings, you also won’t qualify. Buyers must use a mortgage for at least 50% of the price of the discounted home.
Will there be a cap on house prices?
The maximum purchase price across England will be £250,000 rising to £420,000 in London boroughs. However, this price cap could be even lower, depending on whether your local authority chooses to lower it.
How do I apply?
Unlike Help to Buy, there will be no formal registration for the First Homes scheme. Instead, we would recommend that you speak with local estate agents to help locate new developments in your chosen area.
There’s also no known deadline to apply for a First Home. It all depends on the development and when the property is ready to be moved into.
What does this mean for mortgages?
From a mortgage perspective, the Government has encouraged lenders to support this scheme offering them assurances similar to the Help to Buy Scheme. This means lenders are likely to offer lower interest rates drastically reducing the cost of ownership for these properties. We will of course announce when these properties start to become available and provide more information on your mortgage options.
For more information contact us today to talk to one of our mortgage specialists!
