Why the First Homes Scheme Could Save You Thousands on Your First Home

The First Homes Scheme offers first-time buyers in England a 30% to 50% discount on a property’s market value. Unlike shared ownership, buyers do not need to pay rent on the portion they do not own. If you are eligible, you can purchase a new-build home or a previously owned First Home through a developer or estate agent. This guide explains how to find a property, apply for the scheme, and complete the purchase.

Finding a First Home Property

You can look for homes advertised by developers or estate agents under the First Homes Scheme. These properties come with at least a 30% discount on the market value.

Key Features of First Homes

• No rent payments (unlike shared ownership).
• Independently valued to ensure the discount is based on actual market value.
• Maximum property price limits after the discount:
  • £250,000 outside London
  • £420,000 in London
• Local councils may set a lower price cap in certain areas.

Rules for Homeowners

Once you own a First Home, you can:

• Decorate or improve the property freely.
• Sell or let the property, but must follow First Homes Scheme rules.

How to Apply for the First Homes Scheme

Step 1: Contact a Developer or Estate Agent

• If buying a new-build, contact the developer.
• If buying from a previous First Homes owner, contact the estate agent.
• Inform them you wish to buy through the First Homes Scheme.
• They will check if you meet the eligibility criteria and guide you through the application.

If the home is a new-build, you may need to pay a reservation fee. This will be refunded if your application is unsuccessful.

Step 2: Submit Your Application

Your application will be submitted to the local council, which will:

• Review your eligibility.
• Contact the developer or estate agent.
• Contact your mortgage adviser, if you have one.
• Contact your conveyancer (a legal professional handling property transactions).

Step 3: Choose a Conveyancer

A conveyancer is responsible for handling all the legal aspects of buying a home. You will need to provide the name and contact details of your conveyancer when submitting your application.

You can find a conveyancer through:

• The Law Society website (for conveyancing solicitors).
• The Council for Licensed Conveyancers website (for licensed conveyancers).

Contact your conveyancer in advance to confirm their fees and availability.

Step 4: Arrange a Mortgage

• If your application is approved, you must secure a mortgage covering at least 50% of the purchase price.
• You can explore mortgage options on the Money Helper website.
• If you have a Lifetime ISA or Help to Buy ISA, you may be able to use it for your First Home purchase.

Step 5: Final Approval and Exchange of Contracts

Once your mortgage is approved and legal documents are completed:

1. Your conveyancer will request permission from the local council to exchange contracts.
2. The council will review and confirm the final approval of your application.
3. Once approved, you can exchange contracts and complete the purchase.

At this stage, you officially become a First Homeowner under the scheme.

The First Homes Scheme provides an excellent opportunity for first-time buyers in England to purchase a home at a significant discount. By following the steps outlined—finding a property, applying through a developer or estate agent, securing a mortgage, and completing legal formalities—you can successfully buy your First Home. With no rent to pay and full ownership rights, this scheme makes homeownership more accessible for those who qualify.

FAQ’s