After years of increasing property prices, first-time buyers have now got to climb the mountain to get on the property ladder. Fortunately, the UK government has now launched several schemes to assist buyers. One of these schemes is the First Homes Scheme, which gives you a discount for new builds. Here is everything you need to know about the First Homes Scheme.
What is the First Homes scheme?
The first homes scheme is meant to offer newly built homes to first-time buyers with a discount of at least 30% compared to the market rate for equivalent properties.
As per the government home, buyers are able to save up to £70,000, which makes buying a home much more affordable. In certain areas, you can also get up to 50% off. Every time a property is sold, the new buyer is benefited from the discount.
How does the First Homes scheme work?
The first homes scheme includes building new homes to be sold at a discount. However, the local council can increase the rates by up to 50%, especially in areas with high property prices.
The properties are meant to be purchased by first-time buyers. If any couple is purchasing, then neither partner should have owned a house before. Otherwise, the property will be sold as normal.
If the first-time buyer decides to sell the property, the home will be valued independently, and the discount scheme will be re-applied to a new value for the next owner.
This pattern ensures that houses are always sold at a price lower than the market price and continues benefiting future first-time buyers.
Who is eligible for the First Homes scheme?
It is important to be a first-time buyer to qualify for this scheme. You must buy a home within your local area and live in the same house. You cannot make it your holiday home or sublet.
Although every professional individual can opt for this scheme, certain professions always take priority, such as nurses, firefighters, police and teachers.
This scheme is meant to help people in need, and the govt always has some price caps.
How do I apply for the First Homes scheme?
Here are all the necessary steps to take if you wish to apply for the First Homes Scheme.
- Contact Developer – If you want to buy a First Home, let a real estate agent know.
- Apply through Developer – The developer will guide you through the necessary steps for application submission and may even do it on your behalf. This includes proving that you are a first-time buyer through land registry searches. You will be required to pay a fee for the application, and in case you are rejected, the fee is refunded.
- Authority To Proceed – In case the application is successful, the local council will send you an Eligibility Certificate and Authority To Proceed. You will also be required to send these to your mortgage and conveyance provider to carry on with the next steps.
Even if no First Homes are available in your locality right now, it’s always best to be prepared beforehand. Review your budget to see what you can afford and start saving towards your deposit.
Will I pay stamp duty?
The first-time buyers are exempted from the stamp duty if they buy a home worth £425,000 or less.
Limitations of the First Homes scheme
These are some of the downsides of considering First Homes Schemes:
- Be careful with new build premiums – newly built homes come at a premium, and you may get something older for cheaper rates in the open market.
- Limited availability – in areas with higher market prices, like commuter towns, places with holiday homes, cities, etc., this scheme makes a big difference, and only a few are lucky to grab them. The limited availability of this scheme currently means high competition and less accessibility to buyers of all regions.
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