Buying your first home can be a challenge, particularly when property prices and mortgage costs make saving for a deposit difficult.
The First Homes scheme is designed to help eligible first-time buyers get onto the property ladder by allowing them to buy a home at a discount of between 30% and 50% of its market value.
The scheme is available in England and applies to certain new-build homes and properties that have previously been bought through the scheme. The property must be your only or main residence.
If you're considering buying a First Home, it's important to understand not only the discount but also the eligibility requirements and restrictions that apply to the property.
Our team can help you understand the legal side of your purchase and guide you through the process.
To learn more about how we can help, simply call us today on 0800 138 0458, or reach out through our website.
First Homes are sold to eligible buyers at a discount from their full market value.
For example, if a property has a market value of £250,000 and is offered with a 30% First Homes discount, you would pay £175,000.
The discount stays with the property when it is sold. This means that future buyers must also meet the relevant eligibility requirements and the property will continue to be sold at a discount.
Unlike shared ownership, you don't pay rent on the part of the property you don't own. You buy the property outright, subject to the terms and restrictions of the First Homes scheme.
There are several eligibility requirements.
Generally, you must:
If you're buying with someone else, all buyers must generally be first-time buyers and you must apply together. The relevant income limit applies to your combined income.
There may also be additional local eligibility criteria.
Your local council can introduce additional criteria for First Homes properties.
For example, a council may give priority to:
These additional criteria generally apply during the first three months that a property is advertised for sale.
There are exemptions from some local criteria for members of the armed forces and certain former spouses, widows, widowers and veterans. However, the other First Homes eligibility requirements still apply.
It's therefore important to check the requirements for the particular property you're interested in.
There is a price cap on First Homes.
For new-build First Homes, the maximum price after the discount is currently £250,000, or £420,000 in London. A local council can set a lower maximum price.
The property must also be independently valued so that the discount is calculated against its actual market value.
First Homes can be:
You can find First Homes being advertised by developers and estate agents.
If you're buying a resale property, there will still be rules around who can purchase it and how the discount is applied.
You don't necessarily need to borrow the full purchase price, but you must be able to obtain a mortgage covering at least 50% of the discounted purchase price.
For example, if the discounted purchase price is £175,000, your mortgage would need to cover at least £87,500.
You should speak to a mortgage adviser or lender early in the process to make sure you can secure suitable finance.
The First Homes discount doesn't remove the other costs associated with buying a property.
You may need to budget for:
Your solicitor can provide an estimate of your legal costs and explain any additional costs that apply to the particular property.
Buying a First Home involves many of the same legal steps as buying another property, but there are additional scheme requirements that your conveyancer will need to deal with.
The process will usually involve:
Your conveyancer will need to provide their details as part of your First Homes application. Once your mortgage and legal work are in place, your conveyancer will work with the local council on the steps needed before contracts can be exchanged.
You can generally decorate or improve your First Home, but you may need to comply with the terms of the lease or other legal documents affecting the property.
If you're considering structural alterations or other significant works, check whether you need permission before starting.
Your solicitor can explain any restrictions contained in the property's legal documents.
Yes, but selling a First Home isn't quite the same as selling an ordinary property.
The First Homes scheme is designed so that the discount remains with the property.
This means there are rules around who can buy the property when you sell and how the discount is applied.
You may also need to follow a specific process when selling, and the buyer will need to meet the relevant eligibility requirements.
Understanding these restrictions before you buy is important, particularly if you don't expect to live in the property for a long time.
The property must be your only or main residence when you buy it.
There are also restrictions around letting or selling a First Home, so you shouldn't assume you can rent the property out in the same way as an ordinary home.
If you think your circumstances may change and you may want to let the property in the future, speak to your solicitor before committing to the purchase.
The First Homes discount can make buying a property more affordable, but it's important to understand the restrictions that come with it.
Before you proceed, consider:
Your solicitor can help you understand the legal implications of these requirements before you commit to the purchase.
First Homes and shared ownership are both designed to make home ownership more accessible, but they work differently.
With First Homes, you buy the property outright at a discount from its market value.
With shared ownership, you buy a percentage of the property and pay rent on the remaining share.
First Homes therefore doesn't involve paying rent on an unowned share of the property, but it does come with specific restrictions around eligibility and resale.
If you're deciding between different affordable home ownership options, it's worth considering the long-term costs and restrictions of each.
Buying a First Home involves additional legal requirements alongside the usual conveyancing process.
Our residential conveyancing team can help you understand the scheme and make sure the legal work is dealt with correctly.
We'll:
We'll explain everything in plain English, so you understand exactly what you're agreeing to before you exchange contracts.
If you're considering buying a property through the First Homes scheme, get in touch by calling 0800 995 6040, emailing help@switalskis.com or using the form below.
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Our solicitors are experts in new build conveyancing. If you're about to buy a brand-new home and need tailored and efficient legal guidance, work with Switalskis.
The conveyancing process for new builds can be daunting, especially for first-time buyers, or those unused to dealing with new build properties. We're here to make it straightforward for you. We'll answer any questions you have, break down the complexities and keep you in the know at every stage so you can make decisions with confidence.
We understand that buying a new home is both exciting and nerve-wracking. We're here to listen to your concerns, get to grips with your specific needs, and offer advice that's tailored just for you. To us, you're not just another client; you're someone taking a big life step, and we're committed to making the process as smooth as possible.
When it comes to new build conveyancing, you want a team with experience and expertise. With Switalskis, you're in good hands. We've got a wealth of knowledge about the complexities of property transactions and a proven track record in helping people just like you secure their dream homes.
When it comes to new build conveyancing , you want a team with experience and expertise. With Switalskis, you're in good hands.
For more information about our conveyancing services, or to get your quote, call us today on 0800 138 0458 or send us a message through our website.