1st Mar 2023|Sales|New Homes|

Everything You Need To Know About The First Homes Scheme

With property prices soaring and demand for homes far outstripping supply, the government’s pledge to slice a selection of new home property prices by a whopping 50 per cent will undoubtedly be welcome news for prospective buyers. But what is this First Home Scheme, who is eligible, and how does it work?

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What is the First Homes Scheme?

Set out in June 2021, the First Homes Scheme is an incentive aimed at first time buyers that provides considerable discounts on their first property purchase. The scheme aims to provide local residents with local housing solutions, specifically key workers. It works by offering first time buyers 30 per cent off any eligible new build properties when compared to properties of equivalent market value, which the government claims can help buyers save up to £70,000.

However, with rising house prices and a significant increase in property demand when compared to supply, we anticipate that these properties will be immensely difficult to secure, so you will need to act fast if you wish to secure your first property under the scheme. It is predicted that only 1500 eligible properties will be available over a time period of 2 years, making competition for these units fierce.

What if I choose to sell?

Homes that are eligible under the First Homes Scheme will retain their eligibility in perpetuity. In short, this means that if you decide to sell your first home, the new purchaser will benefit from the government’s discount, too. As such, first time buyers cannot recoup the 30 per cent market value at the time of sale. It is also worth noting that you will only be able to sell your property to another first time buyer

Who is eligible for the First Homes Scheme?

There are numerous conditions that buyers have to meet in order to be deemed eligible for the First Homes Scheme:

  • You must be a first time buyer, and this must be your first home purchase
  • If purchasing with another person, both of you must be purchasing your first home
  • You must be using a mortgage on at least 50 per cent of the property’s purchase price
  • You must be purchasing a home in England
  • You must have an accumulative household annual income of less than £80,000, or £90,000 if based in London

As the scheme is made for local residents looking to purchase their first home in the nearby area, your local authority may impose more conditions in order to ensure that you meet your eligibility criteria. This is to ensure that properties that are part of the scheme are given to the most local residents, specifically key workers that need to live close to their place of occupation. Similarly, priority may be given to recent veterans and members of the Armed Forces.

Is there a price cap on the First Homes Scheme?

Yes – to be eligible, properties must cost £250,000 or less post-discount, or £420,000 or less in London post-discount. As such, no properties that are eligible for the First Homes Scheme will have to pay Stamp Duty Land Tax. What’s more, local authorities can reduce these caps at their discretion.

Can I still use my Help To Buy equity loan?

Although applications for the popular Help To Buy scheme have now closed, those that have already secured their equity loan cannot use it to purchase a property under the First Homes Scheme.

How do I apply for the First Homes Scheme?

If you find a First Homes Scheme property near you that you’d be interested in purchasing, please contact the builder directly to ensure that you are eligible. If you are, the builder will assist you in submitting an application to your local authority.

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Are you ready to buy your first home?

Purchasing your first home can certainly be a daunting process, but Centrick is here to make sure your first property purchase goes as smoothly as possible!

At Home With Centrick is here to provide you with all of the tools you need for a successful first property purchase. For more information on what is available for first time purchasers, and any other schemes that could help you make your first property purchase, check out our helpful blog posts bookmark the At Home With Centrick hub for the latest information. If you’re ready to get moving, contact the team using the form below – we can’t wait to hear from you!

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