The government stated that the First time buyer initiative aims to provide properties to buyers at reduced rates compared to their current market values. This move is intended to benefit local communities, key workers, and families for future generations.
According to the housing ministry, the scheme aims to assist local residents who find it challenging to afford homes at prevailing market prices within their communities, enabling them to stay where they live and work.
First Homes is the latest endeavor aimed at addressing the hurdles of entering the property market, following the government’s initiative for 95% mortgages. High and continuously rising prices have made home ownership unattainable for many, particularly with the ongoing housing boom, propelled by stamp duty tax breaks. This surge has resulted in double-digit annual price increases, further excluding numerous potential buyers from the market.
The scheme specifically caters to first-time buyers, restricting eligibility for households with an annual combined income exceeding £80,000 (or £90,000 in Greater London). Local councils can impose additional criteria, potentially prioritizing key workers or local residents.
The initiative includes price limitations: after applying the discount, buyers cannot be compelled to pay more than £250,000 (or £420,000 in Greater London). Nevertheless, councils retain the authority to advocate for lower price caps.
The initial phase of the First Homes project commenced with properties available for purchase in Bolsover, Derbyshire. More properties will be accessible to first-time buyers through this scheme nationwide in the upcoming weeks. The government plans to fund an additional 1,500 homes entering the market in the autumn, aiming for a minimum delivery of 10,000 homes annually, with potential for more based on demand.
Buyers who can afford a First Home without a mortgage are ineligible, and measures are in place to deter purchasers from acquiring these homes purely for investment purposes.
Considering that the current average asking price for first-time buyers in Great Britain stands at £205,925, participants in this scheme could potentially save £100,000 or more, as per data from property website Rightmove.
Discount: First-time buyers might qualify to purchase a home at a reduced rate, typically ranging from 30% to 50% less than its market value. This reduction could potentially save buyers a substantial amount, often exceeding £100,000.
The First Homes initiative in the UK aims to support first-time buyers in owning their own homes. Here are some essential details about the program:
Eligibility: To qualify, individuals need to be 18 years or older, first-time buyers, capable of securing a mortgage for at least half the property’s cost, and have an income below £80,000 a year before tax (or £90,000 if the property is in London).
Property Type: The eligible properties can be newly constructed homes from a developer or homes purchased through an estate agent that were previously bought under this scheme.
Local Criteria: Local councils may establish specific criteria for eligibility. Some councils might prioritize key workers, current local residents, or individuals with lower incomes when offering discounts through the First Homes scheme.
Alongside the First Homes initiative, there’s also a 95% mortgage scheme. This program assists first-time buyers or existing homeowners in securing a mortgage with only a 5% deposit. The government supports lenders by offering guarantees for mortgages covering the remaining 95%, following standard affordability assessments.
Robert Jenrick, the housing secretary, highlighted that First Homes aims to offer a viable and affordable pathway to home ownership for a larger number of individuals aspiring to own their homes.
These schemes have their own terms and conditions, so it’s advisable to seek guidance from a financial advisor or real estate professional before making any decisions.