The First Homes Scheme offers selected new build properties (both houses and flats) to local first-time buyers and key-workers for between a 30% and 50% discount. (That's a big yes from us!)
2 out of 5 Britons (37%) don’t think they’ll be able to afford to buy a property in their hometown, (according to research by regulated property buyer Good Move.) that's all about to change with the new First Home Scheme.
The first properties available through the scheme have been put on the market in Bolsover, East Midlands as part of the pilot, but demand is high and most homes are likely to be grabbed very quickly.
This scheme is a part of the government’s commitment to delivering 1 million homes by 2024. This brings hope to currently frustrated home buyers, that they might get lucky and gain a helping hand on the property ladder – if you're quick.
The First Homes Scheme pilot launched this week in Bolsover, as we brace for the scheme to launch all of England at the end of the month.
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So, what do we know about the First Homes Scheme?
- First Time Buyers and Key Workers only
Well, this is kinda implied in the name of the scheme, but to be clear; This scheme is only open to First Time Home Buyers. If you're co-buying with someone who isn't a first time buyer, unfortunately, you'll not be able to use the scheme. The same applied if you have ever been 'gifted' a property or inherited one.
"First Homes will also support our fantastic key workers who are looking to get their first foot on the housing ladder – from front-line doctors and nurses to delivery drivers and supermarket staff – by giving many of them the chance to buy a home at a 30% discount." - Housing Secretary Rt Hon Robert Jenrick MP
- Maximum income cap
The combined income of all buyers can’t exceed £80,000 (or £90,000 in London).
- The local connection is a must
Buyers must have some sort of ‘local connection’ with the area where the property. Outlining the reasoning behind this, housing minister Robert Jenrick said, ‘The First Homes Scheme will offer more homes to local people and families, providing a route for first-time buyers to stay in their local areas rather than being forced out due to rising prices.’ He also emphasised the importance of local key workers being able to buy these homes. (Sort of like a 'Right to Buy', but in your hometown.
It’s not yet clear what will qualify as a ‘local connection’. It may be something as simple as having family in the area or being employed locally, or simply having lived in the area for a number of years.
- Discount is ‘for keeps’
One of the most crucial rules to bear in mind is the fact that the discount is ‘for keeps’ – all subsequent buyers will receive the same percentage discount, not just the first buyer. This means if you bought the property for 50% off and you decide to sell the property, you will sell for 50% off as part of the scheme.
Most first-time buyers won’t be deterred by this rule – a home is a home, after all. However, it’s a point to consider when looking at the longer term. As there is less scope for making such a big profit (both because of the discount and the property price cap).
In the event that an owner can’t sell their First Homes property under the restrictions within six months, then the rules may allow for selling it on the open market – subject to an additional fee.
- Banks involved
The following banks and building societies have announced their participation in the First Homes scheme, agreeing to provide 95% loan-to-value mortgages for First Homes:
Chorley Building Society
Darlington Building Society
Leeds Building Society
Mansfield Building Society
Nationwide Building Society
Newcastle Building Society