First Time Buyers Initiative - Buyers guide

What is FTBI?

FTBI makes more affordable homes available to first time buyers priced out of the housing market. It is part of the Government’s new “HomeBuy” low cost home ownership initiative and is available through HomeBuy Agents across England

It enables aspiring first time buyers, who cannot otherwise afford to buy a new home, to purchase a new property with an affordable mortgage and with Government assistance (min £25,001) on a designated FTBI development. The Government then has an entitlement to a share of the future sale proceeds which will be equal to the initial percentage contribution required to assist the buyer. This enables a FTBI buyer to take out an affordable mortgage (minimum 50% of the total purchase price) on which they make repayments.

For the first three years of FTBI home ownership there is nothing to pay on the amount which the Government contributed. After three years buyers will pay a fee to Government (through a HomeBuy Agent) of one per cent per annum on the amount Government funded. This fee will increase each year by a fixed percentage reaching a maximum of three per cent after five years in the property.

Because it is made affordable, FTBI is a “stepping-stone” to assist buyers into full home ownership.

When owners sell their FTBI home, they will repay Government’s contribution by way of a share of the sale proceeds. So if Government initially assisted the purchase with a 25% contribution, the repayment will be 25% of the total value when it is sold.

FTBI homeowners can also choose to reduce the amount payable to Government at any time by making repayments at the prevailing market value. The minimum additional repayment is ten per cent of the market value. Repayments will reduce the Government’s entitlement to a share of the future sales proceeds and also the fees payable by buyers after three years of ownership.

Who can apply?

Anyone who cannot afford to buy a suitable home on the open market and is a first time buyer can apply.

Around fifty per cent of the homes to be made available through the initiative will be for key workers such as nurses, teachers and police officers living across England. The remaining homes will be available to those groups identified as priorities by Regional Housing Boards.

For certain groups, a maximum household income of £60,000 will apply. Lower limits may apply to other eligible groups. Priority will be given to people currently in social/private-rented or temporary accommodation.

As well as being in an eligible group to purchase, applicants for FTBI homes must be able to demonstrate access to savings or sufficient funds to cover the costs of buying which will include solicitor’s fees, stamp duty, a reservation fee and typically a 5% deposit.

Where will FTBI homes be available?

The initiative is starting now with the aim of making FTBI homes available nationally over the next four years. Homes will only be available on designated schemes where the house builder has agreed to provide FTBI properties.

How do buyers find out more and make an application?

First time buyers should contact their local HomeBuy Agent to make an application and find out more about availability of FTBI homes in their area.

The Government Agency providing the funding and establishing agreements with house builders to make FTBI homes available is English Partnerships. Its address is: -

English Partnerships
Corporate Headquarters
110 Buckingham Palace Road
London
SW1W 9SA

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

6.0% APR typical

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.