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Government First Homes Scheme: Your step onto the property ladder

Published 7th March 2022

Government First Homes Scheme: Your step onto the property ladder

Getting onto the property ladder can be a challenge for many and in the current climate with house prices at a record high, owning your own home can feel out of reach.

The Government has put in place several incentives to help with this. But it is the First Homes Scheme, launched in June 2021, that is starting to gain momentum with new homes under construction and well-known high-street lenders now offering specific mortgage products.

But what is the First Homes scheme, who is eligible, and how does it work? We have put together an overview to help you understand more.

What is the First Homes Scheme?

The First Homes Scheme gives the opportunity for first-time buyers to purchase a new build home at a discounted price from the market value of equivalent properties. The discounts are enticing, ranging from 30% in some areas and up to 50% in others. A property needs to cost less than £250,000 after the discount has been applied.

The homes themselves are built to the same standard and specification as full-price homes and, unlike the Government’s Shared Ownership Scheme whereby you have part ownership of the property, the buyer will own the property outright. The discount will also remain on the property, meaning every time the property is sold the saving is passed onto the next owner.

Who is eligible for the First Homes Scheme?

There are certain criteria that prospective buyers must meet in order to be eligible:

When and where can you find a First Home?

The first announcement of a housing development under the First Homes Scheme was on 4th June 2021 in the East Midlands, but more announcements are happening. The largest allocation announced to date is by Eastleigh Borough Council in Hampshire. They will provide 201 First Homes within a much larger proposed 2,500 new homes development scheme. The allocation appears to be varied with some new housing developments having a much lower allocation and some none at all. This will likely cause a barrier for some and make competition stronger depending on where you are looking to buy.

Finding your First Home

Researching which home builders and developers are offering First Homes is a good place to start and could be essential to stay ahead of the curve with competition to purchase these properties likely to be high. It is also wise to get a mortgage offer in principle so you know how much you can borrow plus start doing your research to find a conveyancer. This will allow you to move forward more quickly. Bear in mind that not all will deal with the purchase of First Homes.

Making your application

As soon as you have found your First Home new build property, an application needs to be made to the Local Authority. The home builder will assist you with this by checking if you meet the initial criteria and guide you through submitting your application.

You cannot proceed without paying the property reservation fee to the home builder, and you must also legally prove that all purchasers on the property are first time buyers.

Getting approval

If the application is approved, the local authority will issue a First Homes Authority to Proceed and Eligibility Certificate. From there you need to formally apply for your mortgage and instruct a conveyancer. Once the mortgage offer is made, conveyancing completed, and the contract in place, an exchange date can be agreed and then the big move can go ahead!

Talk to Home Legal Direct:

Whether you are looking to use a government initiative such as the First Homes Scheme or another way to purchase your property, Home Legal Direct are here to offer advice and provide you with a competitive conveyancing quote to help get you moving. Get in touch with a member of the Home Legal Direct conveyancing team for further advice.

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