First Homes Scheme: how to find a home and buy step by step

The First Homes scheme lets you buy a home in England for at least 30% below market value, but only if you find a home sold under the scheme and pass both the council’s eligibility check and a lender’s assessment. This guide takes you through the purchase step by step: finding a home, applying, getting a mortgage and what to check before you reserve.

The full scheme rules, price and income caps and resale rules are on our First Homes Scheme page. If you are not sure whether you count as a first-time buyer, read First-time buyer in the UK: how does it work?. This is general information, not personal advice.

First Homes in brief: what to know before you search

You buy the whole home at least 30% below its market value, and the discount stays with the property. A council can require a 40% or 50% discount if it can show the need, and a new-build First Home cannot cost more than £250,000 (£420,000 in London) after the discount, or a lower local cap. The scheme covers selected new homes and homes resold by earlier First Homes buyers.

As the government response to the NPPF reforms confirms, the December 2024 NPPF removed the national requirement for First Homes to make up at least 25% of affordable housing. The 2026 NPPF does not reinstate a named First Homes quota, although older GOV.UK planning guidance still displays the previous 25% wording. First Homes can still be offered: ask the council or developer what the local plan and section 106 agreement require for a particular site. The buyer does not receive a cash payment from the state: the discount is built into the qualifying home’s sale price.

Who is eligible for the First Homes Scheme?

Every buyer must meet the first-time buyer definition used for stamp duty relief, which considers previous acquisitions of a qualifying interest in a home in the UK or abroad. If all buyers also meet the relief’s other conditions, the Stamp Duty Land Tax rate is 0% on a discounted purchase price up to £300,000. An additional charge, such as the non-UK resident surcharge, may still apply.

The second condition is a combined gross annual income cap for all buyers: £80,000, or £90,000 if the home is in London. Income is measured for the previous tax year, including a joint buyer who will not take out a mortgage. All buyers must apply together, and the local council may set a lower income cap (GOV.UK).

In addition to this, the property cannot be bought for investment purposes - it is only to be used as a primary residence. You cannot buy a First Home outright with cash: the mortgage or home purchase plan must cover at least 50% of the purchase price after the discount. The £250,000 price cap (£420,000 in London), after the discount, applies to the first sale only. On resale, the same percentage discount normally applies to the current market value, but these price caps do not apply.

Priority period

Councils can give priority to specific groups of local buyers. The priority period can last up to 3 months, during which newly built properties covered by the scheme are only available to people who meet additional criteria set by the council. These can be:

• People who have lived in the area for a set period;

• People who work in the vicinity of these properties;

• Key workers (Key community occupations) such as NHS staff, teachers or police officers.

Members of the armed forces, veterans who left the forces within the last 5 years and some bereaved partners of service members are exempt from local connection requirements.

At the end of such a period, the dwellings go on the open market, where they can be bought by anyone in the country who meets the conditions. Note that the priority period does not have to be applied at all - it is up to the local authority to decide.

How can I find housing included in the programme?

Finding a property covered by the First Homes Scheme is unlikely to be the easiest task. Such homes are scarce, and it is rarely possible to add a filter to separate such listings on the classifieds sites. One of the most popular sites, such as Rightmove, allows you to add a “Buying Schemes” filter, but this does not exclude schemes such as the popular Shared Ownership, resulting in sifting through dozens of different other listings. Searching through developers’ sites can also be quite tiresome and, as in the previous case - applying filters is not always possible.

In practice, there are 2 solutions. These involve contacting the developer directly or the local council. To start with, we strongly recommend the latter option - the local authority will know best what the plans are for the new development and how many discounts are foreseen. From the council you can find out straight away what the terms on offer will be and whether and under what conditions the priority period will apply.

How do I benefit from the First Homes Scheme?

If you have found a suitable home covered by the scheme, you will be faced with a number of necessary steps to buy a property. Admittedly, buying a property with the First Homes Scheme is not very different from the classic step-by-step procedure we have described in another article, but the authorities must verify that you definitely qualify for the scheme.

The developer or agent may ask for a decision in principle as proof of your creditworthiness. Remember that for the purchase of a home under the First Homes Scheme, you will need a mortgage from a lender that accepts First Homes properties. There are a limited number of these on the market, and finding one and choosing the most attractive one is not the easiest task, so the best way to do this may be to use an experienced mortgage broker - such as Extend Finance.

To obtain the form needed for qualification, contact the developer or sales agent. They will explain the whole procedure to you in detail and provide you with a list of the necessary documents. They may ask for:

• Proof of identity;

• Proof of address of residence;

• Income certificates;

• Confirmation of First Time Buyer status;

• Decision in Principle.

The developer or estate agent checks your eligibility and submits your application to the local council. You will need your conveyancer’s details for the application. The council will tell you whether you are eligible, and you can then apply for your mortgage. The council must also approve the purchase before contracts are exchanged.

What should you check before reserving a First Home?

Before you pay a reservation fee, check the five things that can hold up a purchase.

1. Whether every buyer is a first-time buyer. First Homes uses the same definition as first-time buyer stamp duty relief. Previous ownership of a residential property, including abroad, can affect eligibility for everyone buying together. An inherited share may matter too; ask your conveyancer to check the details before applying.
2. The price and the minimum mortgage. As an illustration, a £300,000 market value with a 30% discount gives a £210,000 price. A mortgage or home purchase plan must cover at least half, or £105,000. With a 10% deposit (£21,000) you would borrow £189,000. If the lender’s valuation comes in below the agreed market value, the lower valuation after the discount caps the sale price.
3. Whether your lender finances First Homes. Because of the resale restrictions, not every lender or product is available for a First Home. Check before you reserve, ideally with an adviser, and get a decision in principle.
4. The reservation fee and developer incentives. A developer may charge a reservation fee on a new home. GOV.UK says you get it back if your application is unsuccessful. Incentives such as free goods or cashback should not be worth more than 5% of the discounted price.
5. Your plans for the next few years. You can usually let the whole home for no more than 2 years in total, and you need to tell the council and check with your lender first. You can usually only sell to an eligible First Homes buyer at the same percentage discount. See the resale rules on our First Homes Scheme page.

You can usually use a Lifetime ISA or Help to Buy ISA towards a First Home. Stamp duty is based on the discounted price. If every buyer qualifies for first-time buyer relief, the rate is 0% up to £300,000; check whether an additional charge, such as the non-UK resident surcharge, applies.

Common mistakes when buying through First Homes

Problems can arise before the application is submitted.

• Reserving before checking the mortgage. The discount does not replace an affordability check. Without a decision in principle and confirmation that the lender finances First Homes, a reservation is a risk.
• Counting one person’s income, or take-home pay. The £80,000 cap (£90,000 in London) applies to the combined gross income of all buyers for the previous tax year. The council can set a lower cap.
• Ignoring local criteria. For the first 3 months a home is on sale, the council can require a local connection or key worker status. This does not apply to members of the armed forces and recent veterans.
• Assuming you will sell at full market value later. The discount stays with the home. Selling on the open market is only possible in limited circumstances with the council’s permission, and you then repay the council the same percentage of the sale price.
• Confusing First Homes with other schemes. First Homes is different from Shared Ownership and the new Your First Home scheme. See the questions below.

Summary

First Homes can reduce the purchase price by 30–50%, but homes may be scarce and you must pass the council check and a lender’s assessment. Start with the council, check the mortgage before reserving and consider how the resale and letting limits fit your plans. If you meet the eligibility rules and find a First Home in your area, compare its total costs and restrictions with your other options before deciding whether to apply.