THE government has revealed more details about the First Home scheme that lets first time buyers get a 30% discount off a new house.
Boris Johnson first revealed the scheme as part of a wider affordable housing plan announced in June last year.
The cheap homes will be sold to local people who want to stay in the community where they live or work, but are struggling to buy a home at market prices.
It is estimated that Brits will save an average of £100,000 off their home.
The government has since been consulting on exactly what the First Homes scheme will look like, and has now revealed its final plans.
Here’s all you need to know about the scheme.
What is the First Homes scheme?
First Homes are new flats and houses built on developments up and down the country.
Brits will be able to buy them with a 30% discount off their market value under the scheme if they are a first time buyer.
There is a cap on the price of these houses – after the discount has been applied, you won’t be paying more than £250,000 for your home, or £420,000 if you live in London.
However, the government has now said it’s possible that the discount could be as high as 50% off, and the price cap on these homes could be much lower.
But local authorities will be in charge of this and decide whether to give developers planning permission to offer a steeper discounts or lower price caps.
First time buyers looking to buy a new home in England will qualify for the discounted homes, the government has said.
As they’re meant to help Brits on lower incomes get on the property ladder, you won’t be eligible for the scheme if your combined household income is over £80,000, or £90,000 if you live in London.
If you can afford to buy a First Home without a mortgage, you also won’t be able to buy one.
You must use a mortgage for at least 50% of the price of your discounted home.
However, there may be different conditions you need to meet in order to be eligible for a First Home, depending on where it is.
As local authorities can add extra criteria local people need to hit in order to qualify for the scheme, you might find that buyers who are key workers may get first dibs on these houses, for example.
But after the first three months, extra conditions set by the local authority will be removed for any First Homes which haven’t been sold or reserved.
When will the scheme launch?
The scheme will launch on June 28.
But as the homes need to be built first, it is expected more First Homes will be available for sale from 2022.
How do I apply?
There’s no national website or portal you can use to apply for a First Home.
Instead, you’ll need to do your research, and see which developers are taking part in the scheme.
If there’s a housing development being built near you and it’s offering discounted First Homes, then you’ll need to apply for a home through the developer.
It might be worth checking out which first time buyer events are being hosted around your local area.
There are websites that can help you search for affordable homes too, such as HomeHunt.
Simply type in the postcode you're hunting in into the site's search engine to see what properties are available.
There’s no deadline to hit to apply for a First Home – it is open wherever plots are available.
What happens if I want to sell my First Home?
Even if you want to sell your First Home, you’ll need to sell it to a first time buyer who hits the eligibility criteria.
This is so other people struggling to buy have a better chance of getting on the property ladder.
Will the scheme be helpful?
Propertymark chief executive said the First Homes plan is a “creative initiative” and one that could “really work”.
However, he warned that the scheme could push rocketing house prices up even further.
“We have a very busy market right now, full of hungry buyers, and there is a danger that introducing more buyers without increasing supply could further push the supply and demand out of balance, meaning house prices would continue to rise,” he said.
While Trussle head of mortgages warned first time buyers that they will still need to secure a home loan to buy a First Home.
"Rising house prices, a lack of affordable housing, and high deposit requirements can make it difficult for many first-time buyers to own their own home," he said.
"While the First Home scheme will make home ownership a possibility for many first-time buyers, it’s important to bear in mind that a mortgage will need to be obtained to finance the purchase."
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