Help For First Time Buyers

Many of Mr Pretty's suggestions have subsequently been taken up.  Yet work remains to be undertaken, including new and more direct funding initiatives to help first time buyers and key workers. The Government's Homes and Communities Agency has a number of schemes including HomeBuy Direct, which have recently superceded the highly popular First Time Buyer Initiative (FTBI), which has helped people buy who had previously been unable to afford to.

The FTBI allows buyers to purchase a minimum 50 per cent equity share in the property and use cash from a fund for the remainder of the property's value. The homeowner then pays a rent on the remaining equity but is given the opportunity to increase their share, as and when their income increases.  The key benefit of FTBI, over shared ownership schemes offered by many housing associations, is that there is no rent to pay for the first 3 years.  There are still a number of new build schemes that are offering FTBI.

HomeBuy Direct

The HomeBuy Direct scheme provides equity loans to help first-time buyers purchase selected new homes.  HomeBuy Direct buyers are given help to purchase a new build home taking out a mortgage to cover at least 70 per cent of the purchase price and this is topped up with an equity loan covering up to 30 per cent of the price. The maximum value of homes purchased through HomeBuy Direct is £300,000.

The equity loan is co-funded by the HCA and the development partner. The total amount that the purchaser pays back on the equity loan component corresponds to the property’s market value at the time of repayment. Today, many private sector housebuilders, as well as social housebuilders and landlords participate in HomeBuy Direct.