Mortgage Advisor & Director
Mortgage Advisor & Director
Buying your first home can be expensive, and in today’s economic climate, average house prices are out of reach for many. Luckily, there are government mortgage schemes to help first-time buyers onto the property ladder.
Here, we look at one of those schemes, the First Homes Scheme, in detail. If you want to find out whether you qualify, how it works, and what sort of mortgage you’ll need, read on to find out if the First Homes Scheme is right for you.
What is the First Homes scheme?
It’s a government scheme, only available in England, which enables qualifying applicants to buy a new build home at a discount of 30-50% on its actual market value. This means that the size of the mortgage needed is smaller, reducing the deposit requirement and size of the repayments. This can make it a great option for people with a lower income, or those who are struggling to raise a deposit large enough to buy a suitable home.
The scheme began in 2021, and the majority of homes available are currently purchased directly from property developers. However, a greater number of First Homes properties will inevitably become available to purchase from previous owners as the scheme matures. To ensure that affordable homes remain available to those who need them most, the intention is that the vast majority are only sold to future scheme applicants.
Conditions of purchase include:
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You can only resell to others who qualify for the scheme and must give them the same percentage discount as you received
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The value must be £250,000 or less after discount (£420,000 or less if the property is in London)
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You cannot buy the house solely to let it out, and any short-term letting arrangements will need to follow scheme rules
Are there specific mortgages for it?
There is not a specific First Homes Scheme mortgage, but you will need to apply for a mortgage with an approved First Homes Scheme lender. That said, some participating lenders have designed a range of mortgages to be used exclusively alongside the scheme.
Eligibility criteria
The criteria to qualify for the First Home Scheme is as follows:
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Age requirements: Applicants must be over 18
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Buyer status: All applicants must be first-time buyers
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Income: Earn less than £80,000 or £90,000 for London-based property purchase (this is a total combined income if there are multiple applicants)
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Mortgage eligibility: Applicants must qualify for a mortgage of at least 50% of the property value - the criteria will vary by lender, so it’s a good idea to obtain a mortgage decision in principle with a participating lender before you apply
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Local council-specific criteria: Not all councils will necessarily add criteria, but most give priority to applicants with a local connection to the area, key workers, or low-income earners (local criteria do not usually apply to applicants who are/were themselves, or are/were married to a member of the armed forces
How we can help you get a First Homes scheme mortgage
At Teito we have access to the entire market of lenders, including those participating in the First Homes Scheme. You can compare the relevant deals available through our online rates comparison tool in seconds.
If you’re looking for more guidance and support, however, why not speak to one of our experienced brokers, who help with First Home Scheme applications every day? We can provide advice and recommend a lender with criteria that match your circumstances.
Compare First Home Scheme Mortgages for FREE
Participating mortgage lenders
Not all lenders offer mortgages for the purpose of buying through the First Homes Scheme, but there are plenty that do. A wide range of building societies, such as Leeds BS, Skipton BS, and Newcastle BS, among others, are open to applicants using the scheme.
Some lenders, such as Halifax, have a mortgage range specifically aimed at this scheme. Others, like Nationwide, are a bit more flexible, allowing applicants to use their standard mortgage range to buy First Home Scheme properties.
As with all mortgages, criteria vary from one lender to the next, and it’s important to understand that qualifying for the scheme will not necessarily mean that you’ll qualify for a mortgage. That’s why it’s important to find a lender with criteria to match your individual circumstances ahead of time, to avoid disappointment.
As a whole of market brokers, we can help you to secure a competitive First Homes Scheme mortgage with the most suitable lender for your needs.
Available properties and housebuilders
First Homes Scheme properties are available either directly through property developers or from previous First Home Scheme applicants selling their homes through estate agents.
As the scheme is still relatively new, buying directly from housebuilders and developers is likely to offer greater choice, but it’s a good idea to consider all options. Most mortgage lenders have higher deposit requirements when it comes to new build purchases, so buying a pre-owned First Homes Scheme property may be beneficial in that respect.
Unfortunately, there is no central website listing the availability of housebuilders offering homes for sale through this scheme. However, most large property developers, such as Barratt Homes, Bellway, Taylor Wimpey, Redrow, and Persimmon offer at least some of their homes through the First Homes Scheme.
Why choose Teito for your mortgage needs?
Teito are experienced First Homes Scheme mortgage brokers, who can help you to secure a mortgage with a participating lender if you decide it’s the right fit for you. If not, we can recommend a range of other first-time buyer mortgage options that may be more suitable.
We offer your initial consultation free of charge, with no obligation. Our expert service is rated 5 stars on leading review sites such as TrustPilot and Google, so you have nothing to lose. Get started here to compare the latest mortgage deals available and get advice from a broker who specialises in the First Homes Scheme.
FAQs
Depending on whether you’re buying directly from the developer or an estate agent, make contact and tell them you want to buy a property through the First Homes Scheme. They will then ensure you meet its criteria, and ask you to submit an application to the relevant council.
In some cases, a reservation fee may be required to hold a First Homes Scheme house which is in the process of being built. Once your application is approved you’ll need to apply for a mortgage with a participating lender. This is where we can help - reach out to find out more.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.