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FirstBuy scheme extension is good news for aspiring first-time buyers

Oct 01, 2012

In September, the Government announced significant additional funding for its affordable home purchase scheme FirstBuy. The extension of the scheme, to the tune of £280m, aims to enable a further 16,500 first-time buyers to make that all-important purchase and pick up the keys to their own home over the next 2 years.

FirstBuy, launched in 2010, has already helped thousands of first-time buyers to step onto the property ladder.

What is FirstBuy?

The FirstBuy scheme provides an equity loan of up to 20% of the purchase price of a specific new-build property. This equity loan is funded equally by the Government and the property developer, and the purchaser is required to raise the other 80% by obtaining a mortgage and, in most cases, providing a small deposit. Developments all over England and Wales have been successful in their bids to acquire FirstBuy funding, and to find out about relevant developments in your area, you can use our property finder tool or contact your local HomeBuy agent.

Contact details for all of the HomeBuy agents can be found on the Homes & Communities website.

Who is eligible?

Eligibility is based on a household income of £60,000 or less and applicants will also be subject to an affordability check to assess the size of mortgage and equity loan they are able to afford and sustain. The equity loan is interest free for the first five years. Once accepted onto the FirstBuy scheme, applicants will be invited to choose a FirstBuy property.

Help for teachers

If you are a teacher and would like to know more about the scheme, you can call us on 0800 378 669. We support FirstBuy and currently offer two mortgage options for the scheme. If you register for the scheme and achieve the maximum equity loan of 20% of the purchase price of a property, we may be able to provide a mortgage with no deposit payable.

What about selling?

If you purchase a property via the FirstBuy scheme and later need to sell it to relocate or upsize, the home can be sold on the open market. Upon completion, the equity loan would be repaid by way of a share of the proceeds. If the value of the property has increased by the time of sale, you, the developer and Government will all share in this increase. If the value of the property has gone down, the Government and developer will only share the sale proceeds left over once the mortgage has been repaid.

For more information, call the mortgage team at Teachers Building Society on 0800 378 669 or visit the Homes & Communities Agency website.