First Homes Scheme

As Ex Forces Veterans we understand better than anyone the need to secure a home before your career ends and you have to move out of your SFA. 

You’re in safe hands with advice from ex-military advisers, whose advice is not only fit for purpose from a navy  mortgage point of view, but is also up to date with the lifestyle you currently lead. 

Rest assured we aren’t just any old civvy in a suit, who doesn’t have a scooby about the life you lead and the problems faced. We don’t work civilian 0900 to 1700 Monday to Friday hours but have comms via text, WhatsApp, email and Facetime after working hours, to fit in with your FOE. We are experts in navy mortgages.

First Homes Scheme

What is the The First Homes Scheme?

First homes are new build flats and houses built on developments situated up and down the country. They are available at a discount of at least 30% and local councils can decide to allocate further discounts, to make the scheme more affordable for local applicants. Key workers and First Time Buyers are eligible for the scheme, which potentially is exciting news for a lot of people who had previously given up on the thought of homeownership.

When the owner of the property wants to sell it on, the 30% (or more) discount they receive must be passed on to the next person buying it, who will also be a key worker and First Time Buyer.
How does the The First Homes Scheme differ from the Help to Buy scheme?
The Help to Buy scheme is where the government gives you a loan to pay for a percentage of the property, which you don’t pay any interest on for the first five years. The First Homes Scheme offers homes at a discounted price offering a new way to get key workers onto the property ladder.

How much will the homes cost?

Unfortunately, the scheme is only available in England at the moment and there is a minimum of 30% discount, but your local authority can give you a bigger discount. First Homes properties will have a price cap £250,000 outside of London and £420,000 in London.

You can’t own or have interest in a property to qualify, and if your household earns more than £80,000 or £90,000 in London, you won’t qualify for the scheme. It’s not open to people with large deposits either, as you’ll need to get a mortgage of at least 50% of the value of the property, so it’s really there to help cost wise, for those who need it.

How much deposit will I need?

Based on a 30% discount making homeownership possible for many First Time Buyers or key workers, it’s important to bear in mind that the mortgage will need to be obtained to finance the rest of the purchase.

Your mortgage lender is likely to require a deposit, although what deposit you’re asked for can vary widely depending on the lender, its appetite to lend to you and your personal circumstances. Some lenders might not need you to add any additional deposit to the amount already discounted, just like the Right to Buy scheme.

Many first time mortgages require a deposit minimum of 5%, so if you take one of these properties, after discount, at a cost of £210,000, a 5% deposit means you need to save up £10,500.

Will the First Homes Scheme be worth it?

It will depend on individual circumstances whether it will be helpful or possible for people to use the scheme, however, the idea is that it helps you to buy a home and become a homeowner where you perhaps weren’t able to before, so for that reason, it’s definitely worth it.

When will the scheme be available?

The scheme launches at the end of June 2021, but you do need to contact the local authority where you live and work to find out about what developments are offering properties under the discounted schemes. Some authorities may offer discounts up to 50%, but they will need to show evidence of why a bigger discount is required.

The challenge at the moment to everybody is going to be finding a property, as only 1,500 are expected to be available in 2021, with a further 10,000 affordable homes a year from 2022. So the scheme will be slow to start off with, but pick up over time, as more properties become available.
What’s the application process?
Because it’s not even launching until the end of June, it’s difficult to tell how busy it’s going to be. You will definitely need to contact your local authorities to see if you qualify and put your application through that way.

You will then approach a Mortgage Broker or a lender, to make sure you’ve got the mortgage loan Agreement in Principle in place, to cover the rest of the finance.

How can Ideal Home Loans help?

We can keep you updated as we hear more about the scheme, but you don’t need to wait until it’s available in your area. We are happy to speak to you in advance, talk through your finances and see whether this will be an option for you and whether a Mortgage Lender would theoretically be able to lend you how much you need.

Please remember your home is at risk if you do not keep up repayments on your mortgage.

“I served throughout the 80s and spent the last six years going out to the BATUS, BATUK, BFC and BFG, while we were out there delivering financial education briefings to the officers and serving personnel”

Martyn Barberry
Ex-Forces Veteran
Mortgage Adviser For The Military