What is the First Homes Scheme and how do I use it?

The British government offers a number of reliefs and assistance programmes for different groups in society. In a rather privileged position are First Time Buyers, i.e. people who are buying a property for the first time and have never owned a home, either in the UK or anywhere else in the world. We have described this status and other related benefits in another article, but in this one, we will focus on the First Homes Scheme, a scheme that makes it significantly easier for first time buyers to buy a home in England (This scheme is not available in other parts of the UK).

What is the First Homes scheme?

The First Homes Scheme is a government scheme that allows buyers to purchase a property at a discount of at least 30%. This applies to some newly-built properties and those bought from an owner who has taken advantage of the scheme themselves. This is because once a property is included in the scheme, it has this status forever.

As we mentioned earlier, the discount starts at 30%. Whether it is increased to 40% or 50% depends on the local authority - the terms of the First Homes Scheme can vary from location to location. The local council sets the discount depending on the property prices in the area and the income level of the residents. The overall aim of the scheme is to enable people who need it most to buy a home.

Councils can ask developers to sell some homes on new developments as First Homes as part of the planning agreement for the site. Since December 2024 this is no longer a national planning requirement, and national planning policy published in August 2026 no longer refers to First Homes, so whether (and how many) First Homes are offered depends on the local council, and availability varies by area. This fact is important to realise in general how the First Homes Scheme works - unlike other assistance schemes, you don’t get money from the state, but the discount is imposed in advance on the developers, who are obliged to sell the housing at a lower price.

Who is eligible for the First Homes Scheme?

In order to participate in the scheme and purchase a property at an attractive discount, you must meet a few basic criteria. The basis, of course, is First Time Buyer status - as previously mentioned, this is someone who has never owned a home, either in the UK or anywhere else in the world. Such people, in addition to being able to participate in the First Homes Scheme, are fully exempt from Stamp Duty Land Tax if the property costs no more than £300,000.

The second condition is an annual income limit. These must not exceed £80,000 (or £90,000 if buying in London) and this applies to all persons using the property as owners who will be resident and financially contributing to the mortgage. In theory, if the property will be financed entirely by just one person, being the sole formal owner, only their income may be taken into account. In practice, however, we advise caution with such arrangements, as the conditions are quite strictly enforced and the authorities may require additional statements of income situation.

In addition to this, the property cannot be bought for investment purposes - it is only to be used as a primary residence. Through the First Homes Scheme, a home cannot be bought with cash either - it must be financed with a mortgage with an LTV of at least 50%. 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.

Summary

The First Homes Scheme can help eligible first-time buyers in England buy a home, through discounts that reduce the market price by between 30% and 50%. However, the number of First Homes is limited and availability depends on the local council. If you have First Time Buyer status and are looking to buy a property, definitely take an interest in housing covered by the scheme in the area you would like to live.