First Homes Scheme: What is it and can I benefit?
What is the scheme?
The Government’s First Homes scheme in England allows first time buyers (FTB) to purchase a New Build property at a discounted purchase price under a Resale Price Covenant (RPC). The discount (which will be a minimum 30%) must be passed on if the property is sold in the future.
How do I know if I am eligible?
- All applicants must be First Time Buyers.
- Local authorities have the discretion to prioritise key workers, local residents and service personnel.
- Applies to England only
- The maximum purchase price, after discount, is £250,000 or £420,000 in London.
- Discount is typically 30% but Local authorities can increase up to 50%
- Customers maximum income of £80,000 or £90,000 in London.
Halifax, one of the UK’s leading mortgage lenders have written to Prospect Tree explaining that they will be accepting applications on the scheme through their intermediary channel as of Monday 7th February 2022. As one of the first lenders to do so, they have commented that they are making the move to support more people buying their first home.
We expect to hear more lenders following suit over the coming months, although nothing has been confirmed yet.
The lender has released some initial information surrounding the criteria of the products on offer:
- Minimum 5% personal deposit based on discounted purchase price
- First Homes scheme specific products must be selected
- Mortgage must be on a capital and interest repayment basis, no interest only
- Minimum 50% Loan to Value (LTV) based on discounted purchase price
At Prospect Tree we are always happy when we see more support being offered to First Time Buyers and with the recent spike in interest from new home buyers, we imagine that this will certainly help some people buy properties sooner than they had planned.
The success or failure of the scheme will be in the hands of new homes developers and how willing they are to promote it within their sites.
If you are interested in finding out more about this scheme, or how much you could borrow, then contact one of our independent experts today for impartial and honest advice.