The First Homes scheme can help eligible first-time buyers in England buy a selected new-build home at a reduced price. Supply is limited, so knowing where to look and whether you qualify matters.

The discount isn't a loan to repay or a share of ownership to buy back. You own the home outright from day one. 

Available properties are still limited relative to demand. The government pledged 10,000 First Homes per The number of First Homes delivered has varied, and availability remains limited in many areas, but actual delivery has been significantly lower. Homes are being added as new developments get approved.

If you're exploring first-time buyer mortgages, this guide explains how the First Homes scheme works, who can apply, where to find properties, and how the mortgage process differs from a standard purchase.

Your home may be repossessed if you do not keep up repayments on your mortgage. 

This article is for general information only and isn't personal financial or investment advice.

What is the First Homes scheme?

The First Homes scheme is an English government programme offering new-build homes to first-time buyers at a minimum 30% discount off market value. The discount stays with the property through a Section 106 agreement and passes to the next eligible buyer when you sell.

The scheme is delivered through developers as part of their affordable housing commitments. Because each development is agreed separately, supply varies significantly by region.

Price caps apply to the discounted price, not the market value. After the discount has been applied, the property must cost no more than £250,000 outside London, or £420,000 in London. Local councils can set a lower cap. London's £420,000 cap sits below the Lifetime ISA's £450,000 property limit, which affects whether you can combine the two.

How the discount works

The discount is calculated as a percentage of the property's independently assessed open market value. That percentage is set at the point of first sale and stays fixed permanently, so a 30% discount stays 30% whether the property changes hands once more or ten times.

Here is a worked example:

1. A new-build home has an open market value of £200,000
2. With a 30% First Homes discount, you buy it for £140,000
3. You need a deposit of at least 5% of the discounted price, which in this example is £7,000. Some lenders may require a larger deposit.
4. You secure a mortgage of £133,000 (at least 50% of the discounted price is a requirement)
5. Ten years later, the independent surveyor values the property at £230,000
6. You sell at 30% off that new valuation: £161,000
7. You receive £161,000 from the sale, minus any outstanding mortgage balance

The discount lowers the price you pay and the deposit you usually need. But it also means any increase in value is based on the discounted price, not the full market value.

These figures are illustrative examples only and are not guaranteed borrowing amounts. The amount you may be able to borrow depends on factors including your income, regular spending, credit history, deposit size, and lender affordability checks.

Who can apply for the First Homes scheme?

Eligibility is assessed on a case-by-case basis through the developer and your local authority. You can typically apply if you meet all of the following:

• You are a first-time buyer. To qualify, you cannot have owned or inherited a residential property anywhere in the UK or abroad. For more on how this is defined, see what counts as a first-time buyer.
• You are 18 or older.
• Your household income is no more than £80,000 per year before tax (£90,000 in London), based on the previous tax year. If buying jointly, this is your combined income.
• You can get a mortgage for at least 50% of the discounted purchase price. You cannot buy outright with cash or with a very small mortgage.
• The home will be your main residence, not a buy-to-let or second home.
• Many local authorities also require a local connection. This may mean living or working in the area for at least three years. 

Key worker priority: Some councils prioritise NHS staff, teachers, police officers, firefighters, and armed forces personnel. The definition of a key worker varies by council.

Armed forces exemption: Serving personnel, veterans who left the forces within the last five years, and bereaved spouses or civil partners may be exempt from the local connection requirement. All other eligibility criteria still apply.

Joint purchases: All buyers must be first-time buyers. Combined income must fall under the relevant cap.

How to find First Homes properties near you

There isn't a single place to find First Homes properties, so here's where to start:

1. Check GOV.UK. The GOV.UK First Homes page provides scheme guidance and can point you toward your local authority's housing team.
2. Search property portals. Zoopla, Rightmove, OnTheMarket, and Share to Buy all list First Homes properties. Search with filters for "affordable housing" or "First Homes" alongside your target area.
3. Contact your local authority directly. Ask the housing or planning team about active Section 106 agreements that include First Homes allocations. Some councils publish affordable housing registers.
4. Approach developers in your area. National housebuilders, including Barratt Homes, Bellway, and Taylor Wimpey, have delivered First Homes properties on various developments. Their sales offices can confirm whether specific plots carry a First Homes allocation.

Many properties are offered to local buyers first. If no eligible buyer is found within three months, they can then be marketed nationally. Even if you're not local, keep an eye on new developments.

Availability varies by local development, although London, the South East, and parts of the Midlands have historically seen more activity, while some areas of England have had very little supply to date.

How to apply for the First Homes scheme

The application process runs through the developer and your local authority. There is no central portal.

1. Find a property listed under the First Homes scheme.
2. Check you meet the eligibility criteria — both national and any local requirements set by the council.
3. Contact the developer's sales team and express your interest in purchasing through the scheme.
4. The developer submits your details to the local authority for eligibility checking.
5. Pay a reservation fee — up to £500, which is usually refundable if your application is unsuccessful.
6. Receive your Authority to Proceed and Eligibility Certificate if your application is approved.
7. Begin your mortgage application and instruct a conveyancer to handle the legal work.

Refer to the home-buying timeline for a full picture of what happens at each stage of a property purchase.

Getting a mortgage on a First Homes property

First Homes properties have a Section 106 restriction on the title. This sets rules about who can buy the home and how much it can be sold for. Not all mortgage lenders accept these restrictions, so you may have fewer lenders to choose from than with a standard purchase.

Major lenders that have offered First Homes mortgages include Halifax and Nationwide, alongside a number of building societies. Lenders commonly offer up to 95% loan-to-value (LTV) on the discounted purchase price, meaning your deposit is typically 5% or more of the discounted price, not the full purchase price. Lender participation and product availability can change.

One of the scheme's biggest advantages is that you'll usually need a smaller deposit than you would for an equivalent property bought on the open market.

Your mortgage must cover at least 50% of the discounted purchase price. Buying with cash or a very small mortgage isn't allowed under the First Homes rules.

Because the lender pool is smaller, we'd recommend speaking to a broker familiar with Section 106 properties before committing to a reservation. Getting a mortgage in principle early can also give you a better idea of how much you could borrow before you start looking.

What happens when you sell a First Homes property?

When you come to sell, the same discount percentage you received must be passed on to your buyer. They must also meet First Homes eligibility criteria, and the sale must be approved by the local authority.

How the resale numbers work:

• You bought at £140,000 (30% off a £200,000 market value)
• The home is now independently valued by a the Royal Institution of Chartered Surveyors (RICS) registered surveyor at £260,000
• The maximum you can sell for is £182,000 (30% off £260,000)
• You receive £182,000 minus your outstanding mortgage balance

Because you buy the home at a discount, any increase in its value will be based on the discounted price. If you'd bought the same home on the open market and later sold it for £260,000, your gain would have been bigger. You pay less to get on the property ladder, but you'll also benefit less if the property's value goes up.

If you can't find an eligible buyer after actively marketing the home for six months, you can apply to your local council for permission to sell it on the open market. If permission is granted, you'll need to pay the equivalent of the original discount percentage from the final sale price to the local authority.

Disadvantages of the First Homes scheme

The scheme has real advantages, but it won't be the right fit for everyone. Here are a few things to consider.

1. Limited supply. Available properties are far fewer than demand, and distribution across England is uneven. Finding a First Homes property in your target area may take time.
2. Resale restrictions. You can only sell to another eligible first-time buyer at the same discount percentage. This limits your potential buyer pool and, in some market conditions, could slow a sale.
3. Capped equity gain. Because the discount stays with the home, you'll benefit less if its value goes up. Over time, that could mean a smaller return than if you'd bought a similar home on the open market.
4. Narrower lender pool. Not all mortgage lenders will lend on Section 106-restricted properties. This could also limit your remortgage options in the future.
5. New-build only on first sale. The scheme only applies to new-build properties when first sold. You can buy a First Homes resale through an estate agent, but those are rarer.
6. Future government changes. The scheme's future depends on government housing policy. Delivery volumes have been lower than the government's stated target, and the long-term trajectory of the programme remains unclear.

First Homes vs other first-time buyer schemes

Your income, deposit size, preferred property type, location, and long-term plans all affect which scheme makes most sense. The table below summarises the key differences.

Shared Ownership is mainly intended for first-time buyers, although some previous homeowners may qualify if they're selling their existing home and meet the scheme's eligibility rules.

Based on scheme rules as of June 2026. Rules can change. Check GOV.UK for the latest information.

If you're considering one of the main alternatives, see how Shared Ownership works.

Want to know more about the savings products in the table? See the Help to Buy ISA and Lifetime ISA withdrawal rules. 

Investment values can go down as well as up, and returns aren't guaranteed.

Depending on your circumstances, one scheme may suit you significantly better than another. A mortgage broker can help you model how each option looks against your specific deposit, income, and target property.

Can you combine First Homes with other schemes?

Some government schemes can be used alongside First Homes, while others can't. Here's how the main ones compare.

• Lifetime ISA: You can use LISA savings toward your deposit on a First Homes property as long as the purchase price is £450,000 or less and you meet the other Lifetime ISA conditions. London's First Homes price cap is £420,000, so this combination works there too.
• Mortgage Guarantee Scheme: Whether these can be used together depends on the lender and the specific mortgage product. The Mortgage Guarantee Scheme supports eligible 95% LTV mortgages, but not every participating lender offers it on every First Homes purchase.
• Shared Ownership: These are separate, incompatible programmes. You cannot use both on the same property.
• Help to Buy equity loan: The scheme is no longer available. Applications closed on 31 October 2022, and eligible purchases generally had to complete by 31 March 2023..

Always check the specific terms of each scheme and confirm with your lender before proceeding.

Schemes that get confused with First Homes

Several government housing schemes are easy to confuse with First Homes:

Help to Buy equity loan: This scheme is closed to new applicants. Applications closed on 31 October 2022, with purchases completed by 31 March 2023. It was a completely different product from First Homes. 

The government provided an equity loan of up to 20% (40% in London) toward a new-build property. If you already have a Help to Buy loan, see how Help to Buy worked.

Help to Buy ISA: A savings account closed to new applicants in November 2019. Nothing to do with First Homes. Existing account holders can keep saving until 30 November 2029 and must claim the government bonus by 1 December 2030.

Discount Market Sale: A separate affordable-housing arrangement under which a property is sold below market value. The discount, eligibility criteria, income limits and resale restrictions vary by council and development.

Right to Buy:A scheme mainly for eligible council tenants and certain housing-association tenants with Preserved Right to Buy. Other eligible housing-association tenants may be able to use Right to Acquire instead. For more details, see Right to Buy mortgages.

Frequently asked questions

Here are answers to some of the most common questions about the First Homes scheme.

Can I get 50% off through the First Homes scheme?

The minimum discount is 30%. Some local authorities set a higher discount, up to 50%, but this is relatively uncommon in practice. You cannot request a higher discount on a property already allocated at 30%. The discount level is set by the council when the planning agreement is drawn up, not by the buyer.

What is the income limit for the First Homes scheme?

The national cap is £80,000 per year before tax (£90,000 in London), based on the previous tax year. For a joint purchase, that's your combined income. Some councils set a lower local cap, so check with your local authority if you're targeting a specific area.

For self-employed applicants, income is typically assessed from your most recent self-assessment returns. Councils don't all handle this the same way. If your income structure is more complicated than a straightforward salary, confirm the approach with the housing team directly rather than assuming the national guidance covers your situation.

Can key workers get priority for First Homes?

Yes, if your local council gives priority to key workers. The definition varies by council but commonly includes NHS staff, teachers, police officers, firefighters, and serving armed forces personnel. Priority typically applies during the first three months a property is marketed, after which it opens to all eligible first-time buyers who meet the national criteria.

Is the First Homes scheme still running in 2026?

As of June 2026, the scheme remains open. Available properties are limited and vary significantly by region. The scheme's long-term future depends on government housing policy, so it's worth checking GOV.UK for the latest updates before making any decisions based on its availability.

Can I rent out a First Homes property?

The property must be your main home, so you can't buy it as a buy-to-let. You may be allowed to rent out the whole property for up to two years while you own it, but you'll need permission from both your local council and your mortgage lender first.

In some situations, such as moving for work or after a relationship breakdown, your local council may allow you to rent it out for longer. Renting out a single room is treated differently, so check with your lender and local council if this applies to you.

What is the First Home Fund in Scotland?

The First Home Fund was a Scottish Government shared equity scheme that helped first-time buyers purchase a home by providing an equity loan of up to £25,000. It was separate from England's First Homes scheme and ran until March 2022, when it closed to new applications.

Scotland’s new First Homes Fund opened on 24 June 2026. It can contribute up to £10,000 towards an eligible first home costing up to £300,000. It is a shared-equity scheme, which means the Scottish Government takes a percentage stake in the property. You do not make monthly payments or pay interest on that stake, but it is normally repaid as a percentage of the property’s value when you sell. Eligibility, mortgage and application conditions apply.

Find out what mortgage options could work for you

See what you could be eligible for with Habito's Mortgage in Principle, or read our first-time buyer mortgage guide to learn more about buying your first home.

Habito is authorised and regulated by the Financial Conduct Authority (FRN 714187).

Options available to you will depend on lender criteria, affordability, and your personal circumstances.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources and last updated

This article is based on guidance from organisations including MoneyHelper, Citizens Advice, and GOV.UK. Mortgage rules and legal processes can change. Check the latest information or speak to a qualified adviser.

Information is correct at the time of writing and may change. Always check the latest scheme guidance and terms before making a decision.

Last updated: July 2026