First Homes Scheme England: Eligibility, How to Apply, and What the Discount Really Means
First Homes Scheme England: Eligibility, How to Apply, and What the Discount Really Means
The First Homes scheme is one of England's most genuinely useful first-time buyer programmes — but it is also widely misunderstood. Some buyers think it only applies in specific councils. Others don't realise what the "perpetual discount" actually means when it comes time to sell. And many simply don't know how to find First Homes properties in the first place.
Here is a clear, accurate guide to how the scheme works, who qualifies, and what to consider before buying under it.
What Is the First Homes Scheme?
First Homes was launched by the government in 2021 to help local first-time buyers and key workers buy a new-build home at a substantial discount. The scheme provides a minimum 30% discount off the open market value — and local authorities can increase this to 40% or 50% if they choose.
The discount is secured permanently. It is registered as a legal restriction on the property's title at HM Land Registry and remains attached to the land indefinitely. This is called the "perpetual discount covenant," and it has significant implications for how you can sell the property in future.
The Financial Reality of the Discount
The headline benefit is real. A property with an open market value of £350,000 becomes available to you at £245,000 with a 30% First Homes discount. Your mortgage is on £245,000 (less your deposit), not £350,000. Your stamp duty is calculated on £245,000. Your deposit requirement drops substantially.
At the point of purchase, this is a significant financial advantage — particularly in areas where prices have outpaced what first-time buyers can borrow.
However, this comes with an important price cap: after the discount is applied, the purchase price cannot exceed:
- £250,000 across England (outside London)
- £420,000 in Greater London
This means that in very high-price areas — much of London, large parts of the South East — even a 30% or 50% discount may not bring a qualifying property within reach. The scheme is most effective in areas where open market new-build prices sit in the £300,000 to £500,000 range, putting discounted properties below the cap.
Eligibility: Who Qualifies?
National eligibility criteria — these apply everywhere in England:
- You must be a first-time buyer (you have never owned a residential property anywhere in the world)
- You must be aged 18 or over
- Your combined household income for the tax year before purchase must not exceed £80,000 (or £90,000 in Greater London)
- You must take out a mortgage covering at least 50% of the discounted purchase price — cash buyers are excluded
- You must intend to occupy the property as your only or main home
Local authority criteria — many councils add extra restrictions:
- A local connection requirement: you may need to have lived or worked in the borough for a minimum period (often 6 to 12 months), or have a family member resident there
- Key worker priority: some councils give priority to NHS staff, teachers, emergency services personnel, or social care workers. Members of the Armed Forces and veterans are typically exempt from local connection rules.
- Specific income thresholds: a council may set a lower income cap than the national limit if local affordability conditions warrant it
These local criteria mean that qualifying for First Homes in one area does not guarantee you qualify in another. The rules are set development by development, so check the specific requirements for any property you are interested in.
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How to Find First Homes Properties
First Homes properties are released through new-build developments where planning permission includes a requirement to make a proportion of units available under the scheme. They are listed on Rightmove and Zoopla alongside standard properties, often tagged as "First Homes" or "affordable housing." Some developers have dedicated sections of their websites for scheme properties.
To find available properties:
- Search Rightmove or Zoopla using the "New Homes" filter and look for "First Homes" scheme tags
- Check your local council's housing portal — many publish lists of developments with First Homes allocations
- Contact local housing developers (Barratt, Taylor Wimpey, Persimmon, and others all participate in the scheme) and ask which of their local developments include First Homes
- Register with your local council's affordable housing waiting list if one exists for your area
First Homes properties are often released in batches as a development is built out. Registering interest early — with the developer and with the local council — puts you in a stronger position when units become available.
How to Apply
The application process varies by development and local authority, but the general steps are:
1. Identify a property and confirm eligibility Contact the developer or housing association marketing the First Homes units and obtain their eligibility checklist. Confirm you meet both the national and local criteria.
2. Get a Mortgage Agreement in Principle As with any property purchase, you'll need a mortgage AIP before your application will be considered seriously. Your mortgage must cover at least 50% of the discounted purchase price.
3. Submit an eligibility application Most schemes require you to submit documentation to the local authority or an appointed assessor confirming your identity, income, first-time buyer status, and local connection. This is typically done via a formal application form with supporting evidence.
4. Receive eligibility approval The local authority (or assessor acting on their behalf) will review your application and confirm whether you qualify. This can take several weeks depending on the council.
5. Reserve the property Once eligibility is confirmed, you reserve the property with the developer — paying a reservation fee, which typically ranges from £250 to £1,000 and may be refundable if the sale falls through for reasons outside your control.
6. Proceed with the legal purchase From this point, the conveyancing process follows standard lines: instruct a solicitor, arrange a full survey (usually a Level 2 or a snagging survey for new-builds), submit the full mortgage application, and proceed to exchange and completion.
The Perpetual Discount: What It Means When You Sell
This is the feature that most buyers do not fully consider at the point of purchase.
When you come to sell a First Homes property, you must:
- Sell it to another eligible first-time buyer who meets the local authority's eligibility criteria
- Sell at a discount equivalent to the same percentage as when you bought (if you bought at 30% off market value, you sell at 30% off the market value at the time of resale — determined by an independent RICS valuation)
The discount does not reduce over time. If the property has risen in value, you sell at 30% below its new, higher market value. You benefit from the capital growth on your purchased share (70% of the growth), but you cannot sell at full market value to any buyer you choose.
This has practical implications:
- The pool of eligible buyers is smaller than the general market, which can extend selling times
- You cannot simply agree a price with a willing buyer — the price is set by a RICS valuation
- The council may need to verify the buyer's eligibility before the sale can proceed
For long-term residents who plan to stay in the property for many years, this is a manageable constraint. For buyers who may need to move within two to five years, the potential difficulty of finding a qualifying buyer quickly is a genuine consideration.
First Homes vs Shared Ownership: Which Is Better?
For buyers who qualify for both, First Homes often represents better value — primarily because you own 100% of the property from day one rather than paying rent on a housing association's share.
Under First Homes:
- No monthly rent to a housing association
- No service charge supplement for owning a partial share
- No staircasing process
- Full ownership of your equity growth from day one
The trade-off is the perpetual discount covenant, which constrains who you can sell to and at what price. Under Shared Ownership, you face monthly rent, service charges, and staircasing complexity — but you can eventually reach 100% ownership and sell to any buyer on the open market.
If the First Homes scheme is available in your target area and you meet the eligibility criteria, it is generally worth investigating seriously alongside Shared Ownership.
The England First-Time Buyer Guide compares all the schemes available to English first-time buyers in 2026 — including First Homes, Shared Ownership, the Lifetime ISA, and the Mortgage Guarantee Scheme — so you can understand which combination makes most sense for your circumstances.
The Bottom Line
The First Homes scheme offers a genuine 30% to 50% discount on new-build properties for eligible first-time buyers in England. It is most useful in areas where new-build prices sit in the £300,000 to £500,000 range, where the discount brings the price below the £250,000 cap. Eligibility depends on both national criteria (income under £80,000, first-time buyer status, mortgage required) and local criteria (often including a local connection requirement). The perpetual discount covenant means the property must be sold at the same discount to another eligible buyer — which is worth understanding before you purchase, not after.
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