First time buyers can get up to 50 per cent reduction | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 08/06/2021

The Government has launched its First Homes scheme that will see some first-time buyers get a discount of up to 50% off the price of their first home.

The scheme, which aims to help first-time buyers and key workers purchase their first homes in places where they live and work, will offer discounts of at least 30% off the price of eligible homes. In some cases, the discount will be as high as 50%.

After the discount has been applied, homes under the scheme must be valued at a maximum of £250,000 across England (£420,000 in London) on the first sale, although some local authorities may set lower price caps. When the property is sold, owners must sell the home at the same level of discount to first-time buyers who are eligible for the scheme, but there will be no price cap on the value of the home.

Who is eligible for the First Homes discount?

To be eligible to purchase a home under this scheme, first-time buyers must earn less than £80,000 per year or £90,000 in London (some local authorities may set a lower maximum income), have a minimum 5% deposit and a mortgage or home purchase plan must be used to fund at least 50% of the purchase prices of the home. As well as this, local authorities may require that applicants be key workers or have strong connections to the local area.

How to apply for the First Homes scheme

Homes available under the First Home scheme will be offered on a limited number of plots in most new developments and the Government aims for at least 10,000 homes a year being added in the coming years. The first homes under this scheme are available in the Bolsover district, East Midlands, with a further 1,500 homes expected to enter the market in England by this autumn.

Those who meet the eligibility requirements will need to check whether the new building development is offering homes under the scheme. If it is, first-time buyers need to ensure that they meet all the eligibility requirements and apply through the builder.

How to get a First Homes mortgage

A First Home mortgage will be required for homes purchased under the scheme. The Government has stated that Halifax and Nationwide Building Society, along with local building societies and community lenders, have already revealed that they will be offering high loan-to-value (LTV) mortgages against First Homes.

For those wanting more information about a First Home mortgage it might be worthwhile speaking to a mortgage broker who will be able to see what deals are currently available under the scheme.

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