First Homes Scheme to launch in June
The Ministry of Housing, Communities and Local Government has published more details about the new First Homes Scheme.
The affordable homes scheme is designed to help first-time buyers purchase homes in their local area at a discount of at least 30%.
The government said that local authorities and neighbourhood planning groups have the discretion to offer higher discounts of 40% or 50% if they can demonstrate a need for this.
First Homes should only be sold to those meeting the First Homes eligibility criteria, including:
- The buyer (or, if a joint purchase, all the purchasers) of a First Home should be a first-time buyer
- Buyers of First Homes, whether individuals, couples or group purchasers, should have a combined annual household income not exceeding £80,000 (or £90,000 in Greater London) in the tax year immediately preceding the year of purchase.
- The scheme is capped on properties bought for £250,000 after the discount (or £420,000 in Greater London).
- A buyer of a First Home should have a mortgage or home purchase plan (if required to comply with Islamic law) to fund a minimum of 50% of the discounted purchase price.
How does the First Homes Scheme work?
The 30% discount applies in perpetuity which means that future buyers of the property will be able to benefit. Every time a First Home is resold, the same discount, as a proportion of the current market value, will be passed on to the next generation of homeowners.
First Homes are the government’s preferred discounted market tenure and it said they should account for at least 25% of all affordable housing units delivered by developers through planning obligations.