Getting you on the property ladder – 30% discount with the First Homes scheme

Are you a first-time buyer or key worker living and working in England? If so, you could be eligible for a 30% discount on house prices via the government’s First Homes scheme.

Launched mid-2021, the First Homes scheme is a government initiative to help first-time buyers and key workers get on the property ladder by buying a home in their local area. The scheme is designed to offer houses for 30% less than market value. According to government figures, this works out at an average saving of £70,000. And if you’re a first-time buyer that really can make all the difference.

How does the First Homes scheme work?

Available only in England, the First Homes scheme offers discounted house prices on specific homes. The scheme was brought about to enable first-time buyers and key workers to buy homes in areas where they currently live or work. Those which may otherwise be too expensive.

There are a couple of restrictions on the type of house you may buy through the scheme, however. Currently, you can only use First Homes to buy a new home built by a developer, or an existing home that was originally bought as part of the scheme.

Are you eligible for the First Home scheme?

To be eligible for the 30% discount you must fulfil the following criteria:

You must be 18 years of age or older
You must be a first-time buyer
You will need to have a minimum deposit of 5% of the discounted price but no more than 50%
You must have a combined household income of less than £80,000 (or £90,000 if you live in London)
The home must cost less than £420,000 in London, or £250,000 anywhere else in England (after discount)

In addition to this, local councils can set their own eligibility criteria, choosing to prioritise essential workers, people who already live in the area or those on lower incomes. There are also further exemptions for members of the armed forces and their families.

Are there any terms and conditions you should know about?

Yes, there are a few things to be aware of. If you purchase a house through the First Homes scheme you will only be able to sell it after a minimum of 90 days. The new buyer will be eligible for the same percentage discount you received. And that will be calculated based on the market value at the time. You will be responsible for arranging this valuation using a surveyor registered with the Royal Institute of Chartered Surveyors (RICS)

Assuming you stay in the house for longer than this, when the time comes to arrange a remortgage, your loan will be calculated based on the price of the house, minus the discount you received.

Of course, if you choose to partake in a scheme like First Homes, it’s vital you understand everything about how it works. Our expert advisers will be happy to take you through everything step by step.

Interested in how to apply?

If you believe you’re eligible and think the First Homes scheme could work for you, let the new build developer or estate agent know. They will be able to help you find and fill in the correct application form and send it to your local council. You will find you’re asked to pay a fee if you’re looking at a new build home, but don’t panic, if your application is not successful you will get the entire amount back.

You can find out more about the scheme and eligibility requirements, as well as what happens after your application is approved, at https://www.gov.uk/first-homes-scheme.

Or if you would like some more general advice about buying your first home, our mortgage advisers are ready and willing to help.

Your home may be repossessed if you do not keep up repayments on your mortgage.