The government has confirmed the maximum property price caps for its new Your First Home scheme, which will allow eligible first-time buyers to purchase a new-build home with a minimum deposit of 2.5 per cent.
Under the scheme, qualifying purchasers can buy a new-build property using a repayment mortgage from an approved lender and a government equity loan worth 20 per cent of the purchase price, which remains interest-free for five years.
Price Caps Vary Across England
The price cap is the maximum amount a property can cost for a buyer to be eligible under the scheme. Caps vary significantly across the country, with the highest set at £650,000 in central London boroughs including Westminster, Kensington and Chelsea, and the City of London.
At the lower end, North Lincolnshire has a cap of £215,000, while Hartlepool, Middlesbrough, and Redcar and Cleveland carry a cap of £220,000, according to gov.uk.
Eligibility and Application Details
Applications for the scheme are expected to open in February, with the first completed sales anticipated in April. To be eligible, buyers will typically need to be first-time purchasers acquiring a new-build property in England, within the relevant local price cap, and intending to use it as their primary residence.
Applicants must also have a total annual household income of no more than £110,000 outside London, or £140,000 or less within the capital, and must be in a position to secure a mortgage from a participating lender, who will conduct the necessary affordability assessments.
Industry Reaction
Aneisha Beveridge, research director at Connells group, 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.
"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 implemented in each area to ensure the scheme supports access to modest homes, acknowledging that markets vary across England, according to the gov.uk website.
