How will the government know if you are a first-time buyer?
They could also simply check your credit history to see if you have ever had a mortgage on your credit file.
Whilst the government may not be able to prove that you are not a first-time buyer the risks to you are enormous.
You may be committing mortgage fraud and tax fraud.
Whilst it will be hard for the government to find out if you own or have ever owned any home outside of the UK. It will be relatively easy for them to know if you are a first-time buyer in the UK.
Most government schemes which require you to be a first-time buyer will insist you sign a first-time buyer declaration. If you lie on this declaration and are later found out you will likely lose the property you purchased through any of the Governments help to buy schemes and may have committed a criminal offence.
Why is being a first-time buyer important?
- Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy- allows you to buy your home at a discount price.
- Preserved right to buy- same as above.
- Right to acquire- same as above.
It is important to note that not all the above schemes are restricted to first-time buyers, some of the schemes above will also accept home movers or people who aren't first-time buyers but don't currently own a property.
If you are not a first-time buyer and this is found out towards the end of your home purchase journey e.g at the completion stage then your conveyancer will have a duty to disclose this information to the mortgage lender and any government body who requires you to be a first-time buyer.