The Government has published the local property price caps for the new Your First Home scheme, which is designed to help first-time buyers in England purchase a new-build home with a deposit as low as 2.5%.
Eligible buyers will be able to buy a new-build property using a deposit of at least 2.5% of the purchase price, a repayment mortgage from a participating lender, and a government equity loan covering 20% of the purchase price that is interest-free for five years.
Price Caps Vary Across the Country
Some areas have caps as high as £650,000, including parts of central London such as Westminster, Kensington and Chelsea, and the City of London. At the other end of the scale, the cap in North Lincolnshire is £215,000, while in Hartlepool, Middlesbrough and Redcar and Cleveland it is £220,000, according to gov.uk.
Applications for the scheme are expected to open in February, with the first sales taking place in April.
Eligibility Requirements
Buyers will normally need to be a first-time buyer purchasing a new-build home in England within the relevant local price cap, use the property as their main home, and have a total annual household income of £110,000 or less outside London, or £140,000 or less within London.
They must also be able to obtain a mortgage from a participating lender, which will carry out affordability checks.
Industry Reaction
Aneisha Beveridge, Connells group research director, said: “The level at which the caps have been set should give would-be first-time buyers access to a choice of both flats and smaller houses in most areas, ensuring healthy take-up of the scheme.”
“While larger houses mostly sit above the price caps, this isn’t unreasonable for a scheme designed to support first-time buyers,” she added.
“In the short term, these figures show what existing stock can likely be sold using Your First Home, but longer term, the caps will start to shape what homes housebuilders decide to deliver. The new price caps may also help breathe life back into the flat market, by encouraging more first-time buyers to consider apartments in order to benefit from the interest-free equity loan.”
Property price caps are being applied in each area to ensure the scheme supports access to modest homes, recognising that markets vary across England, according to the gov.uk website.
