Affordable home ownership schemes mean you could buy with at least a 30% discount

How the affordable home ownership schemes work

Affordable home ownership schemes are Government-backed scheme designed to help more first time buyers in England onto the property ladder.

With the schemes, selected new-build homes in England are available for sale with a discount of at least 30% of the market value, up to a maximum price of £250,000 (after the discount has been applied).

The First Homes and Discounted Market Value discount and provisions will apply to the future sales of the property. This means the same percentage discount applied to the original sale will be passed on to the new buyer – although they must first have been approved by the local authority as meeting the eligibility criteria. This process will apply every time the property is sold, with the aim of helping other first time buyers in the future.

The affordable home ownership schemes are subject to availability, status, eligibility, terms and conditions.

Eligibility criteria

  • The affordable home ownership schemes are available to first time buyers only. If the home is being purchased by more than one person, all must be first time buyers.
  • All buyers’ joint gross income must not exceed £80,000 per year.
  • Buyers will need to meet local eligibility criteria if there are any set by the local authority. These may include a lower joint gross income cap and/or at least one buyer having a local connection or being a keyworker.
  • You must be able to obtain a mortgage (or home purchase plan) for at least 50% of the discounted purchase price.
  • A property purchased using the affordable home ownership schemes must be the buyers’ only/main residence during ownership of the property.

Frequently asked questions

  • The affordable home ownership schemes are a government-backed scheme to help first time buyers in England get on the property ladder. They will be able to buy a new-build home with a discount of at least 30% on market value. In some areas, the discount can be as high as 40% or 50%.

  • The First Homes scheme is available on selected brand-new homes in England. If you’re a first time buyer and are interested in one of the selected properties priced at £350,000, you could buy it for £245,000 (where a 30% affordable home ownership scheme discount applies).

  • To apply for the affordable home ownership schemes, you’ll need to:

    • Be a first time buyer whose joint gross annual income (combined if couples or group purchasers) does not exceed £80,000 (or any lower joint annual income cap, set by the local authority).
    • Meet the local eligibility criteria set by the local authority (if any), which could include having a local connection, or being a key worker, and/or having a lower joint annual gross income level.
    • Be able to get a mortgage for at least 50% of the discounted purchase price.
    • Have the affordable home ownership scheme property as your main residence during your ownership of the property.

  • The affordable home ownership schemes are available only on selected properties. Speak to one of our Sales Advisors to find out if an affordable home ownership scheme is available on the home you want to buy.

  • Yes. Affordable home ownership scheme properties cannot cost more than £250,000 – or £420,000 in Greater London – after the discount has been applied, but local authorities can set a lower price cap. The price cap will only apply to the initial sale of the property to you, it does not apply to any subsequent sale of the property.

  • Buying your new-build home with an affordable home ownership scheme means you’ll have full ownership.

  • The affordable home ownership scheme will apply to the home forever (subject to limited exceptions), meaning each future buyer and the local community will continue to benefit from it every time the property is sold.

    This means that if you are ready to move on, you must notify the local authority and when selling your home you must apply the same discount to market value that you received on your purchase, and only sell to buyers that have been approved by the local authority as meeting the affordable home ownership eligibility criteria (including any local eligibility criteria set by the local authority at that point in time). Your solicitor/conveyancer will run through the full details with you.

  • Yes, both need to be first time buyers. If the affordable home ownership scheme home is being purchased by a couple (who are married, in a civil partnership or living together) but only one of them can obtain a mortgage (e.g. where one of the couple has a poor credit history) it is still possible to progress with the affordable home ownership scheme, but both adults in the couple must be first time buyers and both will need to complete the Application Pack, supply the supporting evidence documents and sign the Legal Declarations that they meet the affordable home ownership scheme eligibility criteria.

When selling a property purchased using an affordable home ownership scheme, the seller will only receive the discounted market value, for example 70% of its market value if the affordable home ownership scheme discount was 30%, not the full market value. They must only sell to a buyer that meets the First Homes eligibility criteria (including any local authority’s local eligibility criteria in force at that time). The percentage discount cannot change, even if you have made improvements to your home or if market values increase of decrease.

*The Government-backed, affordable home ownership scheme schemes are is subject to status, eligibility (including any “Local Eligibility Criteria” set by the local authority for their area (if any) designed to prioritise people that have a local connection or are a keyworker or Armed Services Member) and terms and conditions. Available on selected plots on some developments in England only. A property purchased using an affordable home ownership scheme should be the buyers’ only home. Affordable home ownership scheme buyers are required to fund at least 50% of the price after discount by a repayment mortgage (or home purchase plan) together with a deposit of at least 5% of the price after discount. If you’re interested in the affordable home ownership schemes, please speak to one of our Sales Advisors for more information.