What is the First Homes scheme?

First Homes is an English government affordable-housing scheme offering eligible first-time buyers a 30-50% discount on a new-build property. The discount stays attached to the property (via a covenant on the title) so future buyers also benefit. The scheme is council-managed - each local authority allocates First Homes properties to local first-time buyers, typically with local-connection priority.

Who is eligible for First Homes?

First-time buyer (HMRC definition: never owned residential property anywhere). Household income under £80,000 (£90,000 in London). Mortgage funding at least 50% of the discounted price. Local-connection priority typically applies (you may need to live or work in the council area). Each council can also prioritise key workers (NHS, military veterans, teachers) for some allocations.

How is the First Homes discount calculated?

30% minimum, up to 50% in some areas - set by the local authority based on local affordability. A property with a market value of £350,000 at a 30% discount sells for £245,000. The discount applies on initial purchase AND on every future resale - the property is locked at a percentage discount to market value via a Section 106 agreement on the title.

What's the maximum property price?

After discount, the property must cost £250,000 or less in most of England, or £420,000 or less in London. Note this is the discounted price, not the market value - so a £350,000 market-value property at 30% discount (£245,000) qualifies; a £400,000 market-value property at 30% discount (£280,000) doesn't unless it's in London.

Can I sell a First Homes property at full market value?

No - the discount stays attached to the property. When you sell, you sell at the same percentage discount to current market value that you bought at. The buyer must themselves be an eligible First Homes buyer. This is the central trade-off: lower entry cost in exchange for restricted exit value.

Does First Homes save SDLT?

Yes, in two ways. First, SDLT is calculated on the discounted price you actually pay, not the market value. Second, first-time buyer SDLT relief applies on top. A £350,000 market-value property at 30% discount = £245,000 purchase price = £0 SDLT for a first-time buyer (under the £300k threshold).

Which lenders offer First Homes mortgages?

Halifax, Nationwide, Lloyds, Leeds Building Society, Yorkshire Building Society, Skipton, Newcastle Building Society, TSB, and Santander all offer First Homes mortgages. Lender mix varies by region. A broker familiar with the scheme will know which lender works best for your specific council's First Homes properties.

First Homes Scheme UK 2026: 30-50% Off New-Build for FTBs

This guide is information only. First Homes properties have specific Section 106 agreements that vary by site - always read the lease and Section 106 conditions before exchange. Your home may be repossessed if you do not keep up repayments on your mortgage.

What First Homes is

First Homes is an English government-backed affordable-housing scheme available since 2021. It applies to new-build properties on developer sites that have allocated a percentage of units as First Homes. Eligible first-time buyers buy these specific units at a 30-50% discount to the market value, with the discount permanently attached to the property via a Section 106 planning agreement.

The scheme is council-managed. Each English local authority decides which sites have First Homes units, sets the discount percentage (within the 30-50% range, often 30% in lower-cost areas and 50% in expensive ones), and runs allocation - usually prioritising local residents, key workers, and military veterans.

Eligibility checklist

First-time buyer per HMRC definition (never owned residential property anywhere in the world).
UK resident.
Household income under £80,000 (£90,000 in London).
Must fund at least 50% of the discounted price via a mortgage (i.e. can't be cash-only).
Discounted property price after discount must be £250,000 or less (£420,000 or less in London).
Local connection: most councils prioritise residents living or working in the local authority area.
Some councils additionally prioritise key workers (NHS staff, teachers, emergency services, military veterans).

Worked example

A new-build flat in Birmingham has a market value of £280,000. Birmingham Council has set the First Homes discount at 30%. A first-time buyer earning £45,000 with a local connection applies.

Element	Cost
Market value	£280,000
Discount (30%)	£84,000
Purchase price (you pay)	£196,000
5% deposit on discounted price	£9,800
Mortgage (95% LTV at 4.9%, 30-year term)	~£989/month
SDLT (first-time buyer relief, under £300k)	£0
Conveyancing + survey	~£2,000

Total cash needed at completion: ~£11,800. Monthly mortgage: ~£989. Comparable open-market purchase would need ~£28,000 cash and ~£1,408/month.

How to find First Homes properties

Check your local council's housing portal. Search "[council name] First Homes" - each council publishes available allocations.
Check developer sites. Major housebuilders (Barratt, Persimmon, Taylor Wimpey, Bellway, Vistry) list First Homes units on their development pages.
Register on Help to Buy successor portals. Some platforms aggregate First Homes properties across multiple councils.

Availability is geographically uneven - some councils have hundreds of First Homes units, others very few. London boroughs in particular often have limited supply.

The application process

Find an available First Homes property and register interest with the developer.
Council eligibility check - they verify income, first-time buyer status, and local connection.
Allocation - in oversubscribed areas, properties may be allocated by ballot or priority order.
Once allocated, mortgage application proceeds normally against the discounted price.
Conveyancing reviews the Section 106 agreement specific to that property.
Completion and ownership.

The resale restriction (the trade-off)

When you eventually sell, the property must be sold to another eligible First Homes buyer at the same discount percentage to current market value. So if you bought at 30% off £280,000 (£196,000) and market values have risen to £320,000, you sell at 30% off £320,000 = £224,000.

You still benefit from market appreciation - your equity grows proportionally. But you don't capture the full £280,000-to-£320,000 uplift the open market would.

If you stay 5-10+ years and use the home as your primary residence, First Homes is usually a net positive. If you move within 2-3 years, transaction costs and the lost market uplift can outweigh the entry-cost saving.

Combining with other schemes

First Homes + Lifetime ISA. LISA funds your 5% deposit on the discounted price; the £450k LISA cap rarely binds because First Homes prices are below £250k/£420k anyway.
First Homes + Mortgage Guarantee Scheme. Take a 95% LTV via an MGS-backed lender on the discounted price.
First Homes + JBSP. Yes, parents can JBSP a First Homes purchase to boost affordability.
First Homes + Shared Ownership. No - one or the other, not both on the same property.

Who First Homes suits

Strong fit:

First-time buyers in expensive areas who can't otherwise afford a new-build.
Key workers in council areas with First Homes priority allocation.
Buyers planning to stay 5+ years.
Households with income just under the cap.

Less good fit:

Buyers expecting to move within 2-3 years.
Buyers who can comfortably afford a 95% LTV full-price purchase.
Buyers wanting to buy in areas where First Homes supply is non-existent.
Buyers with income near the £80k/£90k cap (any pay rise post-purchase doesn't affect eligibility, but it slightly reduces the relative benefit).

What to do next

Check your local council's housing page for current First Homes listings. If a suitable property is available, register your interest. When you're ready to start the mortgage application, match with a broker who handles First Homes purchases - the lender pool is specific and structuring matters.

First Homes Scheme UK 2026: Eligibility, Discounts and How to Apply