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What is the First Homes scheme and how does it work?

After decades of rising property prices, first-time buyers have a mountain to climb to get on the property ladder.

Thankfully, the UK government has a number of schemes to offer vital assistance.

One of these is the First Homes scheme, which is a scheme that gives you a discount on new builds. We give you the rundown.


  • The First Homes scheme is a policy that provides discounted homes to first-time buyers

  • The scheme may allow you to buy a home for 30% to 50% less than its market value

  • To qualify, you must be a first-time buyer and planning to purchase a property in your local area

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What is the First Homes scheme?

The First Homes scheme is a policy that provides discounted homes to first-time buyers in England who otherwise wouldn’t be able to afford one.

Under this scheme, first-time buyers can buy a new-build home in their local area at a discount of 30% on the market price.

For an average new-build property in England, this will equate to a saving of around £100,000.

Buying a first home is one of life’s biggest financial milestones – and challenges. Here you can find out more about how the First Homes scheme works.

How does the First Homes scheme work?

The First Homes scheme involves the building of new homes specifically to be sold at a discount, and are of a similar specification to full-price homes.

Homes will then be put on the market at a discount of at least 30%. This discount, however, can be increased by local councils to up to 50%, such as in areas where property prices are very high.

These properties must be purchased by first-time buyers. If buying as a couple, neither partner can have previously owned a home. Otherwise, the properties are bought and sold as normal.

If and when the first-time buyer decides to sell the property, the home will be independently valued, and the scheme discount will be re-applied to this new value for the next owner.

This will ensure homes are always sold below the market price and will continue benefitting future generations of first-time buyers.

Who is eligible for the First Homes scheme?

You must be a first-time buyer to qualify for this scheme.

You’ll also need to buy within your local area, with the intention of living in the property (i.e. it cannot be a holiday home or buy-to-let).

Although the scheme will be open to people in every profession, certain professions will also take priority.

These include serving members and veterans of the armed forces, and key workers, including nurses, police, firefighters and teachers.

Finally, to ensure the scheme helps those most in need, the government has also listed some price caps.

These include:

  • Caps on property prices - Properties under the scheme are subject to a £250,000 price cap across England, after the discount. A higher cap of £420,000 applies in London.
  • Caps on household income - Buyers’ combined income is capped at £80,000 across England and at £90,000 in London. However, local planning authorities will be able to set lower caps for the first three months of sale.
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Does this scheme make it easier to get a first-time buyer mortgage?

The scheme requires first-time buyers to purchase their property with a mortgage (or home purchase plan) that covers at least half of the purchase value. With the discount in place, the mortgage requirement will be lower.

The government is aware that the market for lending on discount market homes is small, partly due to the limited number of homes available.

Before, people have needed fairly high deposits, or have been charged higher interest rates on mortgages, for these types of homes.

How do I apply for the First Homes scheme?

Below is an overview of the steps you need to take to apply for the First Homes scheme.

  • Contact the developer: Let them know you're interested in buying a First Home. You can also ask an estate agent if you're buying from a previous First Homes buyer.
  • Apply through the developer: They will take you through the necessary steps to submit your application or do it on your behalf. This will include proving that you are a first-time buyer, which a solicitor can do for you through land registry searches. You need to pay a fee if the First Home you want to purchase is a new build - if your application is unsuccessful, this will be refunded. 
  • Get the authority to proceed: If your application is successful, your local authority will send you an Authority to Proceed and Eligibility Certificate. You’ll need to give these to your conveyancer and mortgage provider (or broker) so that they can start next steps.

Even if there aren’t First Homes available in your area right now, it could be worth preparing for when they do come to market.

Get a feel for the price of new-builds in your area, then see how much they’re likely to cost with the discount in place.

Review your budget and see what you can afford and where you can start saving towards a deposit.

It’s also worth checking your credit score and you can request a mortgage in principle from a lender, to get a good idea of what you can borrow.

Will I pay stamp duty?

First-time buyers are already exempt from stamp duty if their purchase is £425,000 or less

As the price cap is up to £420,000 under this scheme, it’s unlikely you’ll need to pay any stamp duty.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.