First Homes scheme: Is it right for you?

What is the First Homes scheme?

The First Homes scheme gives first-time buyers the chance to buy a new build home with a discount of at least 30% off the full market price. In some areas, the discount can be as high as 40% or even 50%, depending on local council rules.

The discount is applied to the price when you buy the home, but here’s the important part: it stays with the property forever. So if you sell it in future, the discount is passed on to the next buyer too. That keeps the home affordable for other local buyers further down the line.

Who can use the scheme?

To be eligible for the First Homes scheme, you’ll need to meet a few criteria:

• You must be a first time buyer (so you can’t have owned a property before in the UK or abroad)
• You must have a combined household income of £80,000 or less (£90,000 or less if you're buying in London)
• You need to be buying a new build home that’s been approved as a First Home by the developer
• You must be planning to live in the home yourself. It can’t be used as a Buy to Let or second home
• You might need to have a connection to the local area, depending on the rules set by the local council

How much do these homes cost?

Each First Home must be sold at a discount of at least 30%, and the home’s price after the discount must be:

• No more than £250,000 outside London
• No more than £420,000 in London

Local authorities can ask developers to offer a larger discount or cap the price even further if they want to.

What type of homes are included?

The scheme only applies to new build properties. These homes are often on large developments where a percentage of the homes have been set aside for First Homes buyers.

The homes are typically either:

• Starter homes with 1 to 3 bedrooms
• Flats or small houses
• Designed for buyers who need affordable options, not luxury homes

You’ll need to buy directly from the developer offering First Homes, you can’t buy them from a previous owner.

Do I need a mortgage?

To qualify for the scheme you’ll need to take out a mortgage of at least 50% of the purchase price. You can’t buy the home outright with cash.

This means the scheme is aimed at people who can afford a mortgage but are struggling to save for a big deposit or meet full market prices.

How to apply for the First Homes Scheme

• Find a new build development where First Homes are being offered (not all developers take part, so it’s worth checking)
• Register your interest with the developer and ask which plots are available under the scheme
• The developer will help you apply through the local council, who will check whether you meet the eligibility criteria
• Once approved, you can go ahead with your L&C mortgage application and start the buying process
• You’ll need to show things like ID, proof of income, mortgage in principle and that you’re a first-time buyer

Can I sell the home later on?

Yes. You can sell your First Home whenever you like, but the same discount must be passed on to the next buyer. This keeps the home affordable for future first-time buyers in the area.

The home will need to be valued by a professional, and then the discount will be applied to that valuation when it’s sold. For example, if the home is worth £300,000 and you originally bought it with a 30% discount, the resale price must be £210,000 (70% of the full value).

What are the pros and cons of the First Homes Scheme?

Pros:

• You get a significant discount on a brand-new home
• You only need a smaller deposit and mortgage compared to buying at full price
• You can buy in areas where you might otherwise be priced out
• The discount stays with the home to help future buyers too

Cons:

• You must be a first-time buyer
• Not all developers offer First Homes
• You may need to live in a specific local area to qualify
• There’s a resale restriction, so you can’t sell at full market value later
• Not all lenders work with First Homes

What if I earn slightly more than the income cap?

Unfortunately, the income limits are strict. If your combined household income is even slightly above £80,000 (or £90,000 in London), you won’t be eligible. You might want to look into Shared Ownership or Deposit Unlock instead as these have more flexible rules.

Can I use the scheme with other help?

You can’t combine the First Homes scheme with Shared Ownership, Help to Buy or other government schemes. But you can still use:

• Lifetime ISAs to help build your deposit
• Family gifts as part of your deposit (as long as your mortgage lender is happy with that)

The First Homes scheme can be a brilliant option if you're a first-time buyer who needs a helping hand. The discounts are generous, and you get a brand-new home to make your own. The biggest downside is that it’s not available everywhere yet, and competition for these homes can be high.

If you find a First Home in the area you want to live and you meet the criteria, it’s well worth applying.