How the discount works
Under First Homes, selected new-build properties are sold for at least 30% less than their assessed open-market value. A home independently valued at £300,000 would be offered to an eligible buyer for £210,000 at a 30% discount, cutting both the deposit needed and the size of the mortgage. Local councils and developers can agree larger discounts of 40% or 50% where affordability pressures are greatest.
Crucially, the discount is not a loan and there is nothing to repay. Instead, it is locked to the title of the property. When you come to sell, you must sell at the same percentage discount off the market value at that time, to another buyer who meets the eligibility criteria. That means your home's value appreciates only in line with the discounted market, not the full open market, so the equity you build is proportionate to the discounted price rather than the headline value.
For example, suppose you buy at £210,000 (30% off £300,000). Ten years later the market value has risen to £380,000. You would need to sell for no more than £266,000 (30% off £380,000). The next buyer still benefits, and so does every subsequent owner, in perpetuity.
Who is eligible
To buy through First Homes all of the following must apply:
- You are a first-time buyer aged 18 or over (neither you nor any co-buyer has previously owned a home anywhere in the world).
- Your household income does not exceed £80,000 gross per year, or £90,000 in Greater London.
- You can obtain a residential mortgage for at least 50% of the discounted purchase price.
- You will use the property as your only or main residence, not as a second home or buy-to-let.
- You meet any additional local-connection or key-worker priority the relevant council has applied.
Price caps and discount levels
After the discount is applied, the price paid must not exceed the cap for the area. Councils may set stricter (lower) caps.
| Location | Minimum discount | Maximum price after discount |
|---|---|---|
| Greater London | 30% (can be higher) | £420,000 |
| Rest of England | 30% (can be higher) | £250,000 |
| Areas with higher local discount | 40% or 50% | Set by local council |
Figures correct as at June 2026. Local authorities can lower the price cap or raise the discount; check with the relevant council.
Local connection and key-worker priority
Councils can choose to prioritise certain buyers for First Homes in their area. Common priorities include people who already live or work in the local authority area (a local connection), and key workers such as NHS staff, teachers, police officers and firefighters.
If a local connection or key-worker priority is in place, those buyers get first refusal. If no eligible local buyer comes forward within a set period, the home is opened to other eligible first-time buyers more broadly. This means availability varies significantly by location: in rural areas or commuter towns with large public-sector workforces, local priority criteria may be particularly restrictive.
Before visiting show homes or registering interest, check with the developer and the local planning authority whether a First Homes allocation exists on that development and what priority rules apply, as not all new-build sites include First Homes plots.
How to buy a First Home: the process
1. Find an eligible development
Search developer websites and local council planning portals for new-build schemes that include First Homes plots. Availability varies by area and developer.
2. Check eligibility
Confirm you meet the income cap, first-time buyer status, local-connection criteria and mortgage requirement before registering interest with the developer.
3. Apply for a mortgage in principle
Approach lenders or a broker to get a mortgage in principle. You will need to borrow at least 50% of the discounted price. Most mainstream lenders support First Homes.
4. Instruct a solicitor
Your conveyancer will check the First Homes legal charge on the title, which is the mechanism that locks the discount in perpetuity. They will also verify the resale covenant before exchange.
5. Exchange and complete
On completion, HM Land Registry records a restriction on your title requiring the discount to be passed on at every future sale. The restriction cannot be removed.
Selling a First Home
When you decide to sell, you must market the property at the correct discounted price, calculated as the same percentage discount off a current independent valuation. Your conveyancer or the council can guide you through getting an up-to-date RICS valuation, which establishes the open-market value from which the discount is deducted.
The buyer must be eligible for First Homes (first-time buyer, within income caps and able to get a mortgage). The council has a role in verifying the incoming buyer meets the criteria. There are set timescales, typically a few months, within which the council helps find an eligible buyer if one does not come forward through normal marketing.
This resale mechanism protects long-term affordability in the community, but it does affect your exit strategy. A smaller buyer pool of eligible first-time buyers within income caps means sales can take longer than on the open market, particularly in higher-value areas where the income cap is binding. Price the property correctly from the outset and factor this into your plans if you anticipate needing to move quickly.
How First Homes compares with other schemes
- Shared ownership: you buy a share of the property (typically 10% to 75%) and pay subsidised rent on the remainder. With First Homes you own 100% but at a discount.
- Lifetime ISA: a savings account with a 25% government bonus (up to £1,000 per tax year) that can be used towards a first home costing up to £450,000. A LISA can often be used towards a First Homes deposit, provided both schemes' rules are met.
- Mortgage Guarantee scheme: encourages lenders to offer 95% mortgages on standard open-market purchases; it does not apply to discounted schemes like First Homes.
- Help to Buy equity loan: closed to new applicants in England since March 2023, so no longer an option.
- First Homes is England-only. Scotland offers the First Home Fund; Wales has Homebuy and Shared Equity schemes; Northern Ireland runs its own Co-Ownership scheme.
Availability is patchy and varies locally
First Homes are released by developers as part of new-build planning obligations, so stock depends entirely on what is being built in your area and whether the planning permission includes a First Homes requirement. Check with developers, your local council's planning department, and property portals filtering for First Homes. Demand often exceeds supply in high-pressure markets, so register early and keep checking.
Costs and financial planning
The deposit you need is based on the discounted price, not the market value. If you buy at £210,000 with a 10% deposit, you need £21,000 rather than the £30,000 a 10% deposit on the £300,000 market value would require. This is one of the scheme's key advantages for buyers who have some savings but not enough for a full-market deposit.
Stamp duty land tax (SDLT) is calculated on the price you actually pay, not the market value, so the discount also reduces your stamp duty bill. First-time buyer relief applies in addition, meaning many First Homes buyers pay no SDLT at all given the price caps. Solicitor and valuation fees are much the same as any other purchase, though your solicitor may charge a small additional fee for the complexity of the First Homes legal charge.
Ongoing costs, including mortgage payments, buildings insurance, maintenance and any service charge on leasehold properties, are your responsibility just as with any owner-occupied home. Because you own 100% of the property, there is no rent to pay alongside your mortgage, which is an advantage over shared ownership.