South West Homes
What is FirstBuy?
What is FirstBuy?
FirstBuy is an affordable housing deposit assistance scheme from the Homes and Communities Agency, working in partnership with house builders. It aims to make more new affordable homes available to eligible buyers priced out of the housing market.
Can you give me an overview?
With FirstBuy, the buyer (‘you’) buys a new home on an approved FirstBuy new build development with assistance from both the Homes and Communities Agency (‘the Agency’) and the house builder in the form of two equity loans.
You must take out a first mortgage (with a qualifying lending institution e.g. a bank or building society). This mortgage, together with any cash contribution from you, must be a minimum of 80% of the full purchase price the maximum full purchase price is set at £280,000.
The Agency and the house builder will provide equal equity loans to fund the balance needed to make up the full purchase price of your home, up to a maximum of 20% of the full purchase price. These equity loans must be repaid when you sell your home, at which point you must repay the same percentage of the proceeds of the sale to the Agency and the house builder as the initial equity loans (i.e. if you received equity loans for 20% of the purchase price of your home, you must repay 20% of the proceeds of the sale).
In addition, you can, if you wish, make voluntary part repayments of the equity loans (‘staircasing’). The equity loans are interest free for the first five years. After that, you will pay a fee on each of the equity loans of 1.75%, rising annually by the increase (if any) in the Retail Price Index (RPI) plus 1%.
If you purchase a home through FirstBuy, you will have 100% title to your home and you can sell it on the open market without restriction, subject to the repayment of the equity loans.
How does it work?
FirstBuy enables eligible buyers to purchase a new property, funded by an affordable mortgage and with help from the Agency and the participating house builder.
This enables you to take out an affordable mortgage on which you make repayments in the normal way in conjunction with a deposit that the mortgage lender may require (to cover a combined minimum 80% of the total purchase price). The rest of the purchase price will be paid for with equity loans from the Agency and the house builder.
As a result of providing this assistance, the Agency and house builder then both have an entitlement to a share of the future sale proceeds equal to the percentage contribution required to assist your purchase.
For the first five years of FirstBuy home ownership there is nothing to pay on the amount that the Agency and house builder contributed to your purchase.
After five years, both equity loans will be subject to a fee (collected from you on behalf of the Agency and house builder by the Post Sales HomeBuy Agent) of 1.75% per annum on the outstanding amount of the equity loans.
This fee will increase each year by the increase (if any) in RPI plus 1%.
The equity loans supporting your initial purchase mean FirstBuy is a ‘stepping-stone’ to assist buyers into home ownership.
When you sell your FirstBuy home, you must repay the FirstBuy assistance from a share of the sale proceeds. So, if the Agency and the house builder initially assisted your purchase with a 20% contribution, your repayment will be 20% of the total market value when it is sold
Do I qualify?
Please follow this link to check.
Where can I buy a home using this scheme?
This is a brand new scheme and we are working with developers to ensure their properties appear in our property search tool. In the meantime you can download a list of sites where FirstBuy will become available over the coming months. This list is subject to each developer entering a contract with the Homes & Communities Agency and should; therefore, be seen as information only. Don't enter into an agreement to purchase a home until you have our approval.
View FirstBuy Developments - South West in a full screen map
Where can I get more information?
You can download more information by clicking here.
Important Update
FirstBuy is a Government funded product, funding is allocated via the Homes and Communities Agency and administered via a network of Local HomeBuy Agents. South West Homes is the HomeBuy Agent for South West England. You can obtain a full list of local HomeBuy Agents via this link.
The administration of FirstBuy is free of charge to applicants, there is no administration charge and all applicants are processes in date order, for details relating to eligibility and prioritisation follow this link.
Certain unofficial websites are promoting a fast track/priority services at a cost to applicants, please be advised that these websites are not part of the government scheme and do not work in partnership with the Homes & Community Agency's network of Local HomeBuy Agents. We (South West Homes) are responsible for approving applicant eligibility and prioritising applicants.
Please be advised that any payments for priority or fast track services is at an applicants own risk and does not provide any further guarantees that you will be successful on the FirstBuy scheme.