What is the First Homes Scheme?
First Homes is a government scheme offering newly built homes at a discount of at least 30% (up to 50% in some areas) compared to market value. The discount is passed on to future buyers when you sell, keeping homes affordable in perpetuity. It launched in 2021 as part of planning requirements for new developments.
Unlike Help to Buy, there's no equity loan to repay. The discount is permanent - you buy at the discounted price, and when you sell, the next buyer also gets the same percentage discount on market value.
Eligibility Requirements
First Homes is for first time buyers (or those unable to afford to buy without the scheme) with household income of £80,000 or less (£90,000 in London). The discounted price must be no more than £250,000 (£420,000 in London). You must be buying your main residence with a mortgage of at least 50% of the purchase price.
Priority may be given to local residents, key workers, or military personnel depending on local authority requirements. Check specific development criteria.
How the Discount Works
The minimum discount is 30%, though local authorities can require 40% or 50% in areas with greater affordability pressures. The discount percentage is fixed to the property - if you buy at 30% off, future sales must also be at 30% off market value.
For example, a £200,000 home with 30% discount would sell for £140,000. If that buyer later sells when market value is £250,000, they'd sell for £175,000 (30% off £250,000).
Mortgage Requirements
You must buy with a mortgage of at least 50% of the purchase price. This prevents cash buyers benefiting from the scheme instead of those who need help affording homeownership. Standard mortgage affordability criteria apply.
Not all lenders offer First Homes mortgages, as the resale restriction requires specific legal understanding. Our brokers can identify lenders who work with First Homes properties.
When You Sell
When selling, you must sell at the same percentage discount to another eligible first-time buyer. The home must be marketed to eligible buyers for at least 3 months before considering any wider sale. This keeps First Homes affordable for future generations.
You benefit from property value growth (selling at higher price if market rises) but must always apply the same percentage discount your original purchase received.