First Time Buyers Initiative
What is FTBI?
The FTBI scheme makes more affordable homes available to first-time buyers who cannot afford to buy without help. The scheme is being offered through developers of new-build homes with money from English Partnerships. It is part of the Government’s new ‘HomeBuy’ range of low-cost home-ownership initiatives and is available through HomeBuy agents across England.
It means first-time buyers, who cannot otherwise afford to buy a new home, can buy a new property with an affordable mortgage and with Government (English Partnerships) help (at least £25,001) on an FTBI development.
Because it provides the help to buy a new home, English Partnerships is then entitled to a share of the total sale proceeds when the property is sold in the future.
The FTBI assistance means you can take out an affordable mortgage (at least 50% of the total purchase price) on which you make monthly repayments.
For the first three years of owning your FTBI home you do not have to pay anything on the amount which English Partnerships contributed. After three years you will then pay a fee to the Government (through us, the national HomeBuy Agent. This is 1% a year worked out on the amount of help you received.
This fee will increase each year by a fixed percentage (up to 3%) after five years in the property. Because it is made affordable, FTBI is a ‘stepping-stone’ toward helping home buyers become outright owners.
The amount of mortgage you have to take out is assessed by the local HomeBuy Agent when you first apply to buy an FTBI home. Applicants with higher incomes and lower outgoings will be expected to take out a higher mortgage than 50% and this could be anything up to 85% of the property’s full purchase price. This is to ensure people get the help they need to buy a home and increases the number of buyers that can be assisted.
When you sell your FTBI home, by law, you must repay a share of the total money from the sale equal, to the percentage contribution made towards the original purchase price of your home. For example, if you bought your home with a 70% mortgage and a 5% cash deposit and have made no other repayments, you will need to repay English Partnerships 25% of the total value when you sell.
You can also choose to reduce the amount you pay to English Partnerships at any time by making repayments based on the current market value. The smallest extra repayment you can make is 10% of the market value. Repayments will reduce what English Partnerships is entitled to out of the future sales proceeds and also the fees you will pay after three years of owning your home.
Who can apply?
Anyone who cannot afford to buy a suitable home on the open market and who is an eligible first-time buyer can apply.
Around 50% of the homes to be made available through the scheme will be for key workers such as nurses, teachers and police officers living across England. The other homes will be available to those groups given priority by regional housing boards.
For certain groups, your household cannot have an income of more than £60,000. Lower limits may apply to other eligible groups. As well as being in an eligible group, you must be able to show that you have savings or enough funds to cover the costs of buying. This will include solicitor’s fees, stamp duty, a reservation fee and usually a 5% deposit.
A regional HomeBuy Agent in the area where the properties are being built will assess whether you are eligible.
Where will FTBI homes be available?
FTBI homes are available now and will be available throughout England over the next 3 years. Homes will only be available on certain schemes if the house builder has agreed to provide FTBI properties.
How do I find out more and make an application?
You should contact your local HomeBuy Agent to apply and find out more about FTBI homes in your area.
The government agency providing the funding and setting up agreements with house builders and Registered Social Landlords (RSLs) to make FTBI homes available is English Partnerships. Their 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. 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, get independent advice.
