First Homes scheme launched as new Government scheme

The Building Societies Association (BSA) published a factsheet on the First Homes scheme on 4 February 2022, describing it as "a new Government scheme designed to help local first-time buyers and key workers onto the property ladder"¹.

Under the scheme, homes are offered at a discount of 30% compared to the market price, and the BSA states that in some areas the discount could be as high as 50%¹. The discount applies to the homes permanently: the BSA says that when a buyer sells the property, they will need to apply the same discount for the new purchaser¹.

Eligibility as set out in the factsheet is limited to first-time buyers and key workers earning less than £80,000 per year, or £90,000 in London, with a deposit of a minimum 5% of the discounted purchase price¹.

The BSA directs readers to the government's Own Your Home website for further information on First Homes, and notes that different home ownership schemes are available in Wales and Scotland¹. The factsheet does not set out how many homes are available under the scheme, how buyers apply, or which areas attract the higher 50% discount; those details have not been reported in the material published by the BSA¹.

Why it matters for households

The scheme is aimed at people buying their first home and at key workers, and the income limits mean households earning at or above £80,000 a year, or £90,000 in London, fall outside the criteria as described¹. The minimum deposit is 5% of the discounted purchase price rather than of the full market price, so the cash sum required is calculated on the lower figure¹.

Because the discount is retained on resale, a buyer does not capture the full market value of the property when they come to sell: the same percentage discount must be passed on to the next purchaser¹. That affects the price achieved on any future sale and, in turn, the equity a household holds in the home.

The BSA's factsheet covers England only in its description of the scheme, and points to separate arrangements in Wales and Scotland¹. Anyone weighing up first-time buyer schemes in England, Scotland, Wales and Northern Ireland will find the eligibility rules differ by nation, and the question of who counts as a first-time buyer matters both for the scheme and for property tax. The BSA gives no start date for the scheme beyond describing it as new, and no closing date¹.

What happens next

The BSA factsheet, published 4 February 2022, is a description of the scheme rather than an announcement of new terms, and it sets out no further dates¹. It refers readers to the government's Own Your Home page for First Homes and to Own Your Home generally for other affordable home ownership schemes such as shared ownership and the Help to Buy equity loan¹. No timetable for applications, allocations or changes to the discount levels is given in the factsheet¹.