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Using First Time Buyer Relief to Overcome Down Payment Hurdle

Published by UK Property Accountants
Published Date: May 30, 2023

In the UK, first-time buyer relief programs are designed to help and support individuals purchasing their first home. These initiatives recognise the challenges faced by first-time buyers in accumulating the necessary funds for a down payment.

Here are some additional ways in which these programs can help:

1. First Homes Scheme

The First Homes scheme provides first-time buyers with the opportunity to purchase a home at a significantly reduced price, ranging from 30% to 50% less than its market value. This offer applies to newly built homes by developers or homes initially purchased as part of the scheme.

The First Homes scheme is exclusively available in England, and individuals in other parts of the UK should explore alternative programs and initiatives tailored to their region.

To be eligible for the First Homes scheme you must be:

  • 18 years old or older
  • First-time buyer
  • Able to get a mortgage for at least 50% of the home's price
  • Buying the home as part of a household where total income is no more than Β£80,000 (or Β£90,000 if you live in London)

2. Right to Buy Scheme

The Right to Buy Scheme allows eligible tenants of council or housing association properties to purchase their homes at a discounted price. This scheme enables first-time buyers who have been living in a rented property to become homeowners. The discounted price reduces the necessary down payment, making it more accessible for first-time buyers.

Check your eligibility on the Own Your Home website to find out if you can apply.

You can apply to buy your council home if:

  • It is your only or main home
  • It is self-contained
  • You’re a secure tenant
  • You’ve had a public sector landlord (for example, a council, housing association or NHS trust) for 3 years - it does not have to be 3 years in a row.

3. Help to Build Scheme

The Help to Build Scheme is aimed at supporting self-build and custom-build projects. Under this program, first-time buyers can access government-backed loans to assist with the costs associated with building their own homes. This option can be an attractive alternative to purchasing an existing property, and it may require a lower down payment.

4. Regional and Local Incentives

In addition to national programs, there are also regional and local incentives available to first-time buyers in the UK. These initiatives can vary depending on the location and may include grants, loans, or discounted properties specifically targeted at first-time buyers. Researching the offerings in your specific area can help identify additional sources of support.

5. Mortgage Guarantee Scheme

The UK government has introduced mortgage guarantee schemes to support first-time buyers with smaller deposits. These schemes provide lenders with a government guarantee on a portion of the mortgage, making it easier for first-time buyers to secure financing with a lower down payment.

First-Time Buyer's Relief Calculator

Find out if you are eligible for relief on buying first property with our easy to-use First time relief calculator

Conclusion

First-time buyer relief programs in the UK offer a range of initiatives and incentives to help individuals overcome the down payment hurdle and achieve home ownership. The First Homes Scheme, Right to Buy Scheme, Help to Build Scheme, regional incentives, and mortgage guarantees, all contribute to making the process more accessible for first-time buyers.

Exploring these programs and seeking guidance from professionals can provide valuable support in navigating the complexities of purchasing a first home. Remember to stay informed about the specific eligibility criteria, application processes, and deadlines associated with these programs to make the most of the available assistance.

Ready to make your dream of owning a home a reality? Let our expert team at UK Property Accountants help you with your tax liabilities and guide you through the process seamlessly.

Fill our First Time Buyers Relief Assessment Form and take the first step towards home ownership with confidence.

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