The First Time Buyers' Initiative (FTBI) aims to make more affordable homes available to first time buyers priced out of the housing market.

How does it work?

Aspiring first time buyers can purchase a new property with an affordable mortgage and with government assistance (minimum £25,001) on a designated FTBI development. Assistance is paid to the participating house builder, not the first time buyer. The government then has an entitlement to a share of the future sale proceeds which will be equal to the initial percentage contribution required to assist the buyer. This enables an FTBI buyer to take out an affordable mortgage (minimum 50% of the total purchase price) on which they make repayments.

For the first 3 years of FTBI homeownership there is nothing to pay on the amount that the government contributed. After 3 years, buyers will pay a fee to the government of 1% per annum on the amount the government funded. This fee will increase each year by a fixed percentage reaching a maximum of 3% after 5 years in the property.

When owners sell their FTBI home, they will repay the governments contribution by way of the sales proceeds. So, if the government initially assisted the purchase with a 25% contribution, the repayment will be 25% of the total value when it is sold.

FTBI homeowners can also choose to reduce the amount payable to the government at anytime by making repayments at the prevailing market value. The minimum additional repayment is 10% of the market value.

The governments' entitlement to a share to the future sale proceeds is enforced through a second charge on the property. This is done in the same way that a buyer's mortgage lender will secure its lending through a first charge on a property.

Although FTBI buyers will have a mortgage less than the full purchase price of the property, they will be the legal owner with 100% title to the home. The table below shows how it works:

Example of FTBI homeownership:

Who can take part?

Around 50% of the new homes will be for key workers such as nurses, teachers and police officers. We will confirm the specific employment categories.

The other 50% of homes are available for other first time buyer groups as detailed on below:

• Local Authority and Registered Social Landlord (Housing Association) tenants
• Those on a Local Authority housing register
• Workers key to the local economy in areas where house price to earnings ratio is above 4:1
• Restructuring households i.e. created after divorce or separation
• Homeowners displaced by clearance schemes
• People wanting to live in specific areas where mixed tenure is being introduced

FTBI forthcoming developments

Currently there are no FTBI developments in our zone. However, you can register your interest in this scheme at anytime and we will notify you of developments as and when they become available.

Further information

Please consult FTBI Buyers Booklet or contact us Tel 0800 633 56 70 or homebuy@jrf.org.uk

Download an application form