Impact of the First Homes Scheme on Property Market

Who can qualify for the First Homes scheme?

As the name suggests, anybody who applies must be a first-time buyer. Outside of being a first-time buyer, there are several other stipulations as to who can apply.

First-time Buyers

If you have already owned a property previously, you will not be eligible. This applies to inherited or gifted properties too. If you are co-buying a property, you won’t be eligible if either you or your co-buyer has owned a property.

Combined Income

To qualify, you must have a combined household income of under £80,000 (£90,000 in London). If your income and savings show you could afford to buy the house without any discount, then you won’t qualify.

Locality

The requirement to have some type of “local connection” with the area where the house is located, is one of the more ambiguous requirements of the First Homes scheme. Each Local Authority will be able to create its own criteria for determining who should be prioritised for the scheme. Therefore, the criteria may differ from one location to the next. It’s still unclear what constitutes a “local connection”. It could be along the lines of whether you work in the area, have family nearby, or have lived there for a long time.

It is likely that in all areas, key workers will be prioritised. Local councils will also be in charge of determining how large the discount will be. The minimum is a reduction of 30%. However, it could be increased to 50% under the council’s discretion. As a result, being a key worker will almost certainly be a primary factor in securing a larger discount.

Price of the Property

There are also restrictions on the price of the property. Only low-to-moderately priced houses in the UK will be eligible for the First Homes scheme (estimating £250,000 across England and £420,000 in London). This is to ensure the scheme is benefiting those with more average wages.