First Homes

How does the First Homes England scheme work?

Your clients can get big discounts on house prices of between 30% and 50% (compared to the market price set by an independent valuer) if they’re eligible for the First Homes scheme. Once the discount has been applied to a property, it will be passed on when the property is sold, so that future first time buyers can also benefit from the scheme.

Your clients will need to have at least 5% of the discounted price available to put down as a deposit, and a mortgage in place for at least 50% of the discounted price.

Visit the government website to see more about the First Homes scheme.

Who is eligible for the First Homes England scheme?

National criteria (everyone must meet this):

• All applicants must be First-time buyers.
• Their household income must not exceed £90,000, if London based, or £80,000 if outside London.
• They will need to have a mortgage (or home purchase plan) in place for at least 50% of the discounted purchase value.

Local authorities can also apply their own criteria:

• The authority may set a lower income cap if they can provide evidence it’s needed.
• they might apply a local connection test based on residency, employment in the local area or a family connection (serving members of the armed forces, recent veterans and their families will be exempt from local connection tests)
• they might want to prioritise key workers for the scheme.

How we can make things easier for you

If your clients are eligible for First Homes, we have a range of mortgages that could be suitable for them, including mortgages that only require a 5% deposit. We’re also here to answer your questions about First Homes, or any of the other affordable housing initiatives we support.

Key Policy:

• When submitting a First Homes mortgage application in eMortgages, please select the loan type as 'standard purchase' and NOT 'discounted purchase'.
• The LTV is based on the loan amount and the purchase price (discounted amount)
• New build houses and flats are acceptable to 95% LTV (these will all be new build to start with but in time will be resold on the second hand market)
• Where there is a new build incentive of less than 2% the maximum LTV is 95% for houses and flats.
• AVM and desktop valuations are not available on First Homes England mortgage applications.
• Standard Loan To Income (LTI) policy applies.
• Standard Automated Income Verification (AIV) policy applies.

Useful links