First Homes is a new scheme launched by the Government to help first-time buyers onto the property ladder.
First Homes are sold at a substantial discount to their market value (of at least 30%) to make new homes more affordable for first-time buyers.
The percentage discount is applied to each resale of the property to make sure it remains an affordable home. The discount is secured as covenant or charge on the property.
Buyers will be required to put down a minimum deposit of 5% of the discounted price of the First Home and afford the rest of the discounted price through a mortgage.
Full property price (100%)
| 5% deposit |
65% mortgage |
30% discount |
| You |
Bank/Building Society |
Wigan Council |
First homes will start to become available across the borough as the scheme is incorporated onto new construction sites.
Who can apply?
Under the First Homes scheme, prospective buyers must meet certain national eligibility criteria. Local authorities are also able to set local eligibility criteria which buyers must meet.
National eligibility criteria – buyers must:
- Be a first-time buyer
- Have an annual household income less than £80,000
- Not be able to afford a first home without a mortgage.
The Council also sets additional local criteria for the purchase of First Homes within our borough. This local eligibility criteria is set out in the Council’s First Homes Policy and is reviewed annually. When it is updated, all sales or resales of First Homes must take into account the new local eligibility criteria.
Currently, the Council sets out the following local eligibility criteria:
- Buyer’s (or at least one buyer) must have a local connection
- Buyers’ annual household income must be less than the relevant income cap.
Exemptions to local eligibility criteria may apply if you are a current or past member of the Armed Forces (or the spouse or civil partner of a current or past member).
Local connection
To satisfy the local connection requirement, one of the following must apply to at least on buyer:
- They are currently resident in the borough and have been for the previous six months, or for a period of at least three years in aggregate during the last five years
- They do not currently live in the borough but have lived in the borough for a period of at least six months continuously in the last year, or of three years in aggregate during the last five years
- They have a family connection to the borough by reason of a close family member currently living in the borough who has been resident for at least six months. A close family member is defined as parents and guardians, siblings, or children
- They are permanently employed in the borough, or are taking up an offer of permanent employment in the borough. This relates to their usual place of work, not the head office of the employer
- They have a close personal relationship with a resident currently living in the borough who has been resident for at least six months, and the buyer is moving in order to provide care or support to, or receive care or support from, the current resident.
Income caps
To be eligible to buy the First Home, buyers’ gross annual household income must be less than the relevant income cap, based on the number of bedrooms of the First Home.
- 1-2 bedrooms: £35,000
- 3 bedrooms: £50,000
- 4+ bedrooms: £70,000
How can I apply?
If the First Home you want to buy is on a new build development site, contact the developer’s sales team to start your application.
If the First Home you want to buy is being resold by a previous First Home buyer, you will need to contact the estate agents who are selling the property.
In either case, the estate agent or developer will help you to check that you meet the eligibility requirements and complete your application, which is sent to the Council to approve.
You may have to pay a reservation fee if the property you want to buy is a new build. You’ll get the fee back if your application is unsuccessful.
The developer can offer you incentives such as free goods or cash back, but these will not be worth more than 5% of the discounted purchase price.
Can I rent out my First Home?
First Home owners can usually rent out their First Home property for a period of up to two years during the time they own it. This can be one let of two years, or multiple periods of letting which add-up to no more than two years.
Before renting out your First Home, you must:
- Tell Wigan Council that you intend to let your home
- Check with your mortgage provider that they are happy for you to rent out your property
In some circumstances First Home owners can rent out their property for more than two years, but this requires written consent from the Council.
If you are a First Home owner and want to rent out your home for any period which would exceed the two-year limit that a First Home can be let during your period of ownership.
You may be able to rent out your First Home over the two-year limit if:
- the location of your job changes
- a marriage or long-term relationship ends
- you’re moving to get away from a situation that involves domestic abuse
- you’ve been made redundant
- you’re caring for a relative or friend
The Council will consider all requests to rent out a First Home, and may approve requests subject to certain conditions being met.
If a First Home is rented out for more than two years without the Council’s permission, the owner will be in breach of their agreement and the Council can take enforcement action.
Can I remortgage my First Home?
Yes, owners of a First Home can remortgage for any amount up to (and no more than) 100% of the discount price of the First Home (this is the purchase price of the property after the discount is applied to its current value).
Owners of a First Home who are remortgaging the dwelling will require a certificate of compliance from the Council, granting the Council’s consent to the remortgage.
Do I have to pay rent on my First Home?
No. Unlike Shared Ownership you are the full owner of the First Home and you do not have to pay any rent. You will only need to pay your monthly mortgage repayments.
Will I own 100% of my First Home?
Yes. Unlike Shared Ownership you will own 100% of the First Home as soon as you buy it.
The discount (usually 30%) will remain on the property so that it is applied each time the property is sold, making sure the property remains an affordable home. You will not be able to ‘buy out’ this discounted portion.
Can I sell my First Home?
Yes, you can decide to sell your First Home at any point.
If you decide to sell your First Home, you need to contact the Council to let us know, as there are certain steps you will need to take.
If you sell your First Home you must also sell it to a buyer who meets the Council’s eligibility criteria at the time of the sale and who is approved by the Council.
You must sell your First Home at a price which applied the same percentage discount you received to its current market value. A valuation by a RICS accredited surveyor will be required to determine this amount.
For example, for a First Home bought at a 30% discount:
Initial Sale:
- Market value - £200,000
- Discounted price - £140,000.
Resale:
- New market value - £250,000
- Discounted resale price - £175,000 (30% discount from market value at time of resale).