Helping UK new home buyers

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FirstBuy equity loan,

FirstBuy was introduced to help people on lower incomes buy a new home at discounted prices. The government, working in partnership with the main house builders offering to equity share a proportion of new homes so they become more affordable for buyers. ISOS, the government's HomeBuy agent, is responsible for administering the FirstBuy scheme.

How FirstBuy works:

The FirstBuy scheme offers a loan of up to 20% of the home's value so buyers normally only need to find 80% through a mortgage and savings. The loan is only interest free, with no loan fees, in the first 5 years. In year 6, owners will be charged a fee of 1.75% of the loan value. The fee increases every year by RPI inflation plus 1%. The fees charged do not count towards paying back the equity loan!  FirstBuy Buyer's guide

If you pay back all or part of the equity loan early, you will pay less in fees and receive more money when the home is sold. This is known as staircasing. You will incur fees and legal costs when repaying some or all of the loan.

The minimum deposit required by lenders is usually 5% of the purchase price. The scheme is mainly aimed at social housing tenants, MOD personnel and first time buyers.

With a FirstBuy equity loan, you buy your home with at least 80% of the cost met by a mortgage and a deposit. The rest is paid for by the government and the house builder through the equity loan.

The home will be in your name, and you can sell it at any time. The government and the house builder will get a share of the value, including any increase in value on their proportion of equity, when you sell your home. If the home is not sold, you will have to pay back the equity loan after 25 years.

You can only buy a home through an equity loan scheme if your household earns less than £60,000 a year and you cannot afford to buy a home in your area.

For more detailed information download the pdfs:

First time buyers initiative

HomeBuy Direct Buyers


FirstBuy was been extended in the 2013 Budget, with the new Help-To-Buy equity loan. Available from 1 April 2013, and operated along similar lines to the FirstBuy scheme, it is more widely available to anyone buying a newly built home in England. There are no maximum income restrictions and the maximum new home value is £600,000.

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First Buy Shared Equity