WE all love discounts, and there are several schemes buyers can take advantage of to get their first home for less.
The average cost of a home coming onto the market currently stands at £362,452, according to Rightmove.
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This is up £13,648 on last year, when the average price was £348,804.
The Bank of England hiked the base rate from 3.5% to 4% earlier this month.
It was the 10th time in a row that the BoE raised interest rates – and they could still rise further.
But there is extra help on offer for people looking to get on the property ladder.
The Sun spoke to David Hollingworth, of L&C Mortgages, who revealed six schemes that offer discounts to first-time buyers.
The First Homes Scheme
The First Homes scheme was launched in 2021 and means prospective first-time buyers in England can get homes at 30% and 50% discounted rates compared to market price.
But if the homeowner decides to sell the property down the line, the discount on the new value will be made available to any future buyer too.
As well as being first-time buyers, you also have to be aged 18 or above to qualify.
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David said: “The First Homes scheme is a relatively new scheme, but it is very squarely aimed at helping first-time buyers get on the ladder through the provision of a discount.
“There will be eligibility requirements aside from having to be a first-time buyer, including a maximum household income of £80,000 (£90,000 in London) and at least half the purchase will need to be funded by a mortgage.”
David also said that each local council will have their own requirements, so make sure you check these out too.
If you don’t know who your local council is, you can find it using this handy tool.
Right to Buy
The Right to Buy scheme could offer those that are eligible a discount of up to 70%, David said.
It’s a government initiative that lets council house tenants buy the property they rent.
These homes are offered at a reduced price to help renters get on the ladder.
You get a 35% discount on your council home if you’ve been a public sector tenant for between three to five years.
After five years, the discount increases by 1% for each extra year you’ve been a public sector tenant.
However, the maximum it can increase to is 70%, or £87,200 across England and £116,200 in London boroughs.
As long as you have been a public sector tenant, you will be able to get the discount.
David also said that households looking to sell after a few years may have to pay back some of the discount.
He said: “If the property is subsequently sold within five years then some or all of the discount would become repayable.”
Right to Acquire
The Right to Acquire works in a similar way to Right to Buy but for people who have rented from a housing association or another public sector landlord.
To be eligible, you will have to have lived in the home for at least three years.
David said this could offer a discount of between £9,000 and £16,000 on the purchase price, but this will vary depending on the location of the property.
But things get a little more complicated if you then decide to sell the property at a later date.
David said: “If you want to sell the home within 10 years then the property must first be offered initially to the landlord and a price will be agreed.
“If the landlord does not wish to buy the property and a price will be agreed.
“If the landlord does not wish to buy the property then it can be sold to the open market.
“If the property is sold within five years then some or all of the discount will be repayable on a sliding scale.”
Lifetime Isa
“A Lifetime Isa isn’t technically a discount on the property price, but does allow first-time buyers to boost the value,” David said.
Anyone between the ages of 18 and 40 can open a Lifetime Isa to save up for buying a first home.
The cash can be used after an initial 12 months and the maximum purchase price is limited to £450,000.
But you’ll pay a 25% charge if you withdraw money or transfer the Lifetime Isa to another type of Isa before the age of 60.
If you put the maximum of £4,000 a year into the ISA, the government will pay an additional 25%.
David said: “The bonus could help to accelerate the chance to buy and hike the percentage deposit that first-time buyers can put down.”
Shared Ownership
David said Shared Ownership is an affordable way for first-time buyers to get onto the property ladder.
The scheme is also known as part-buy, part-rent.
You’ll co-own your home with a housing association, often a new-build, which will charge you rent on its portion of the property.
If you want to use the initiative, you will need to buy between 10% and 75% of the property.
You can then buy more shares in instalments until they own 100% of it.
To secure the home, you can put down a deposit of just 5% and fund your share using a shared ownership mortgage.
David said: “The scheme helps give the buyer more security of tenure, exposure to the housing market and will also allow the chance to buy further shares and step up toward full ownership over time as circumstances change.”
Haggling
First-time buyers are often desirable because they don’t come with a property chain.
This could mean that you might be in a good position to bid under the asking price.
David said: “With a slower market than in recent years, this could give first-time buyers the chance to agree on a price below asking.
“That will very much depend on the property and the local market.”
He said developers may also be prepared to offer discounts to buyers.
“You could be offered other incentives such as enhanced fittings or help towards a depsosit.
“Mortgage lenders will want to know about any incentives, but you can usually accept these up to 5% of the purchase price.”
Meanwhile, we spoke to a first-time buyer who lost out on hundreds of pounds due to an Isa mistake.
Plus, we spoke to one couple who used the Right to Buy scheme and didn’t need to put down a deposit on their home.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
