For many people who have yet to step onto the real estate ladder, the idea of having enough money for a down payment is somewhat fanciful.
Saving for a down payment can be difficult, especially when you have to do it at the same time as paying rent. The process of trying to get onto the housing ladder can be particularly difficult for people living in London, where the cost of living is high compared to other parts of the country.
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The government recognizes that many young people want to buy a home, but are unable to do so mainly due to financial constraints. To combat this, a number of initiatives have been launched, all set to make the purchasing process easier and more doable. 
In April, Rishi Sunak announced that he would welcome 95% mortgages, allowing buyers to buy a home with just a 5% down payment, while also supporting people across the UK to own new-build properties. Thanks to the Help To Buy system designed in More than 313,000 households purchase real estate.
The latest initiative to hit the headlines is the First Homes scheme, but don't worry if you haven't heard of it yet. Everything will be revealed in this article.
What is the First Homes system?
Like a range of other government initiatives, the focus of the First Homes scheme is to help first-time buyers get onto the property ladder. By offering discounts of up to 50% (but typically 30%) on new home properties, first-time buyers and key employees can secure a home at a significantly reduced cost in the area where they live or work. It will be available for purchase.
The scheme is still in its early stages, with properties currently only available in Bolsover, Derbyshire, but it will be rolled out across the country in due course. The government has announced that approximately 1,500 homes will be available for purchase through the scheme by the end of 2021, with a total of 10,000 homes expected to eventually participate in the scheme.
Due to the incredible savings offered through this scheme, demand tends to be very high and it is not available to everyone who registers an interest. One of the best ways to stay ahead of the competition is to talk to your mortgage broker before filling out your application. Because they will guide you along the way and ensure you are in the best position possible with your mortgage lender. .
Eligibility criteria
As with all schemes of this type, there are certain conditions that individuals must meet and eligibility has a price cap. These are the five key requirements.
Rule 1: This program is only for first-time buyers. This rule also means that anyone who inherited or had a home gifted to them is not eligible.
Rule 2: The scheme only applies to people with an income of less than £80,000 (£90,000 in London). This limit is the same whether you are purchasing as an individual or as a couple.
Rule 3: The market value of a new build property cannot exceed £250,000, or £420,000 in London.
Rule 4: Buyers must have a “local connection” to the area. This point is not yet fully defined and will likely be evaluated on a purchase-by-purchase basis. We are looking to give local first-time buyers in the UK an edge. However, it has been said that key workers such as NHS staff, retail workers, delivery drivers, police and firefighters will be prioritized.
Rule 5: Real estate must be for storage, so to speak. As part of the government's plan to prevent affordable housing from falling into the hands of people looking to sell it quickly for profit, all subsequent property buyers will be given the same amount of money available to them at the time of their original purchase. You will be able to receive the same discount.
Pros (and some cons)
The most obvious benefit is that it allows people to get on the property ladder without having to save up a huge down payment, which will be music to the ears of thousands of potential buyers. Additionally, property prices are relatively low, making it much easier to obtain an economically advantageous mortgage.
Another important advantage is that people can stay in their local area. When buying a home for the first time, many people, especially those living in London, have to consider moving regionally to find something affordable, but this system means that you can't buy a property at the expense of convenience. It's designed so you don't have to own it.
Although there are few disadvantages associated with this plan, there are some aspects that may have some negative effects on the sale of real estate in the future. If the buyer decides to sell in the future, they are unlikely to get a large amount of money (see Rule 5 above). If the original purchaser has not been able to increase their savings while owning the property, the purchase price may need to be very low and they may need to move sideways or even backwards in terms of size or location. Build a second home when the first property is sold.
take a step forward
If you think you're eligible for the scheme and want to know when and how you can register, check the government's dedicated page for the latest information.
In the meantime, talking to a mortgage broker can give you a better understanding of what you can afford, as well as give you an idea of available mortgage deals that take into account your individual circumstances. Mortgage brokers are in a good position to take advantage of mortgage discounts and offers. So, if you are looking to get on the property ladder in the near future, contact a mortgage broker today.
Want to work with a trusted, knowledgeable, and experienced mortgage broker? Contact Alexander Hall today.
With our first housing scheme, Market Properties in London, you can start your search for homes to buy through 'Help to Buy'.
