Government’s New First Home Initiative
If you’re a First-Time home buyer, there is no doubt that you have heard about the Government’s new First Home initiative. But maybe you are not sure what it means for you, or whether you are eligible? Maybe buying a home was out of the question before you could get up to a 50% discount on your purchase? If these are the questions you have been asking yourself, then read on as we explain it all in great detail.
What is a First Home Initiative?
Without further ado, if you’re buying a house for the first time, you can get a discount of a minimum of 30% of the house price. The discount can reach 40-50% if the local authorities demonstrate a need for this, based on the social demographics of the area. For the discount to be applied, the first price of the house must be no higher than £250,000 (with an exemption of £420,000 in Greater London). Therefore, this initiative can save you a whopping £100,000 or more!
Who is eligible to purchase First Home?
To participate in the First Homes initiative, you have to be a first-time buyer. The purchaser can be an individual, a couple or a group of individuals. What is crucial, is that the combined annual household income of the purchasers cannot exceed £80,000 in the tax year immediately preceding the year of purchase. Additionally, the purchaser of First Homes must have a mortgage or house purchase plan to fund a minimum of 50% of the discounted house.
However, be aware that local authorities might have additional eligibility requirements. Additional criteria might involve lower-income caps, local connection status or employment status checks. Authorities may also prioritize key workers, especially if a particular profession is in-demand in the area. However, you should not feel discouraged as additional criteria requirements are continuously reviewed. They are also carefully monitored to not restrict eligible candidates too much to the point where it becomes too difficult to sell any homes. Another point of concession is that local authorities’ additional criteria is only in place for 3 months from when the house is first marketed. If the home is not sold successfully within those 3 months, the additional criteria is scrapped and replaced with the more lenient national criteria.
Which homes can be First Homes?
Any home can be eligible for the discounted purchase, but for newly-built homes specifically, the home developers must show proof that the houses match the definition of “affordable housing” and meet First Homes’ criteria. The house can not be sold at a lower discount than 30% and the price cannot be higher than £250,000. Additionally, the legal restrictions on the sale and use of the property, must be registered onto the title of the First Home on its first sale. The aim of it is to ensure that the discounted price will be applied to all future sales of this property.
With the First Homes initiative it is easier and cheaper than ever to finally buy your first property. If reading this article gave you the smallest seed of the idea of buying a house, why not check the available homes that would suit your needs on SearchSmartly’s intelligent property search platform?