The First Homes scheme lets first-time buyers in England buy a new-build home, or a resale of an existing First Home, at a discount of at least 30% and up to 50% off its market value. After the discount, the price you pay can't be more than £250,000 (£420,000 in London). On a £250,000 home with a 30% discount you'd pay £175,000, cutting a 5% deposit from £12,500 to £8,750 and shrinking your monthly mortgage payments too.
There's no rent to pay and no equity loan to repay, because the discount is simply built into the price. You'll need a mortgage for at least 50% of the discounted price, and when you sell, you pass the same percentage discount on to the next eligible first-time buyer. Not every mortgage lender accepts First Homes, so using a whole-of-market broker who knows which lenders support the scheme really matters. And because stamp duty is charged on the discounted price you actually pay, most First Homes purchases fall under the £300,000 first-time buyer threshold, meaning no stamp duty at all.
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First Homes are sold through developers as they're built, and councils can prioritise key workers and local residents for the first three months a home is marketed. Stock is limited and sells quickly, so speak to us early. We'll check your eligibility and arrange an Agreement in Principle so you're ready to reserve.
A 30% discount with the first homes scheme could make homeownership possible for many first-time buyers and key workers, though it’s important to bear in mind that a mortgage will need to be obtained to finance the purchase. Most first-time buyer mortgages require a minimum of 5% deposit.
If a First Home programme home was sold to an eligible applicant for £250,000, a 5% deposit would equate to £12,500. This government scheme would help future first time buyers considerably as it allows them to put down a lower deposit instead of using the full price percentage, you use the price after the discount has been applied.
Explore each part of the First Homes scheme in detail, from eligibility and the discount to the pros, cons and costs of buying this way.
You must be a first-time buyer aged 18 or over, with a household income under £80,000 (£90,000 in London). Councils can prioritise key workers and local residents, and armed forces families are exempt from local rules.
How the 30-50% discount is set, why the price caps apply after the discount, and what it means for your deposit: usually 5% of the discounted price, with a mortgage covering at least half.
You benefit from rising values, but the discount stays with the home forever and letting it out isn't allowed. Weigh up the resale restrictions, running costs and stamp duty before you commit.
First Homes is one of a number of government initiatives designed to help first-time buyers onto the property ladder, while there are other options that may be worth considering too.
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