What is the First Homes Scheme?

The First Homes scheme (not to be confused with Scotland’s First Homes Fund) is a government affordable housing scheme in England. It allows first-time buyers to purchase a new build property at a minimum discount of 30% but can go as high as 50% if the local authority deems it acceptable.

The scheme began in June 2021, and more than 1,500 new build homes have been available through the scheme to date.

Who is eligible for First Homes?

First Home properties are available only for first-time buyers in England that have a household income of less than £80,000 or £90,000 in London.

There will also be a price cap on eligible properties of £250,000 in England and £420,000 in London. The cap will only be applied on the first sale of the home so that the homebuyer can benefit from capital appreciation in the home.

Local authorities will have the flexibility to adjust certain parts of the qualifying criteria.

Who is NOT eligible for First Homes?

Any homebuyer that has previously purchased, inherited, or been gifted a home will be ineligible for the First Homes scheme.

If you are purchasing a home with a partner, both you and your partner must be first time buyers.

What do homebuyers need to know?

  1. Although the government aims to eventually deliver 10,000 properties a year, there are currently limited properties available through the scheme. Competition for these properties will be fierce.
  2. One of the goals for the First Homes scheme is to help people buy homes in their local area, or where they work. Local authorities will have some flexibility in the criteria they apply to accomplish this goal.
  3. The discounted portion of the home’s value cannot be bought back by the homebuyer. The discount will effectively be rolled over to every first-time homebuyer who purchases that home in the future.
  4. While the discounted portion can’t be bought back, it does allow the customer to purchase the property with a much lower deposit and mortgage, making it easier for them to afford their first home.

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