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First Time Buyers' Initiative (closed)

This content applies to England

How the First Time Buyers' Initiative (FTBI) helps eligible people to purchase a newly built home on an outright ownership basis with the help of an equity loan from the government.

The FTBI is not open to new applicants. First time buyers who want assistance to buy through a similar scheme to the FTBI can apply to the Help to Buy equity loan scheme. See the page Help to Buy equity loan scheme for details of how the Help to Buy equity loan scheme works and who is eligible for it.

How the scheme works

FTBI is a shared equity scheme. Applicants need to be able to cover at least 50 per cent of the purchase price of the property with savings or a mortgage loan. The Government then covers the balance, up to a maximum of 50 per cent of the purchase price (see 'Government contribution' below for further information). Not all applicants will qualify for the full 50 per cent assistance.

For the first three years of FTBI ownership, no fee is payable for the Government's contribution. From the fourth year onwards, the owner-occupier pays one per cent of the amount of the Government's contribution per year. This fee increases by one per cent each year up to a maximum of three per cent per year (the sixth year of ownership). The fee is payable through monthly payments to the HomeBuy Agent and does not reduce the Government's entitlement to a share in the equity.

The owner-occupier can increase their share in the equity of the property at any time. This is known as 'staircasing' (but not to be confused with how a shared ownership owner can increase her/his share of the property, also known as Staircasing). Increments must be a minimum of 10 per cent or a multiple of 10 per cent of the property's market value.

The Government's contribution

The Government's contribution to the purchase price is paid directly to the participating developer. The Government will have an equity interest in the property. As the value of the property increases over time, so the amount to be repaid by the applicant increases. Conversely, if the value of the property decreases over time, the amount to be repaid decreases.

It is important to note that the payment of fees to the Government after the first three years of ownership does not reduce the Government's entitlement to a percentage share in the proceeds of the sale of the property. If an owner-occupier staircases or wants to make full repayment of the Government’s contribution, any fee arrears must be repaid at the same time.

Who can apply

The scheme is open to people earning less than £60,000 a year who would otherwise be unable to buy a home on the open market. Eligible people include:

  • social tenants
  • key workers (see the page on Key Worker Living programme for information about who may be included)
  • first-time buyers
  • people applying to the scheme after a relationship breakdown will also be considered.

Additional criteria

In order to qualify for the FTBI, applicants must also:

  • be able to demonstrate that they have access to savings or sufficient funds to pay a deposit on the property (which may be five per cent or more of the purchase price), legal fees, stamp duty and other costs of moving
  • be able to sustain home ownership in the longer term
  • not be homeowners or named on a mortgage already - if an applicant has had her/his name on a mortgage s/he will have to provide evidence that it has been (or it is in process of being) removed
  • have a good credit history
  • be able to take out a mortgage with a qualifying lender.

To be eligible, social tenants must not have been in rent arrears over the past year or have breached other terms of their tenancy agreements.

Joint applications

More people can buy a home jointly through FTBI, as long as their joint income and savings are less than £60,000 per annum.

Types of property available

FTBI homes are only available on designated developments where the Government has an agreement with the developer to sell leasehold or freehold homes under the scheme. Details of FTBI homes are available from the HomeBuy agents. Most properties available are one or two-bedroom homes.

Alterations or improvements

If the owner-occupier wishes to improve the home or make structural alterations to it, s/he must request prior written agreement from the HomeBuy agent.

How to apply

Applications are dealt with by HomeBuy agents, who register the applicant's interest, assess eligibility and provide details of the scheme in the applicant's area. Potential applicants should contact their local HomeBuy agent to find out more about applying.

Security of tenure

Buyers are owner-occupiers and will own either the freehold or the leasehold. Where the owner-occupier has a mortgage for less than the full purchase price of the property, they are sole legal owners with 100 per cent title to the property. The Government’s interest in the equity and entitlement to a share of the future sale proceeds is secured through a second charge on the property. The mortgage lender will secure its lending through a first charge on the same property.

See the Home ownership section for information on the rights and responsibilities of owner-occupiers.

Selling the home

Owner-occupiers can sell their home at any time. The owner-occupier will need to repay the Government’s interest in the equity of the property (ie its entitlement to a share of sales proceeds) and all costs of selling, including the valuation fee.


The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

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