What is the First Homes Scheme?
The First Homes Scheme is a government initiative that offers newly built homes to local first-time buyers at a minimum 30% discount from market value. The scheme prioritizes local connection and aims to help people stay in or move to areas where they have ties, whether through work, family, or education.
2025 Key Benefits
Minimum 30% discount on new homes | Local connection priority | First-time buyer focus | Mortgage support available | Long-term affordability protection
How the First Homes Scheme Works
30% Minimum Discount
Homes offered at least 30% below market value, with some areas offering larger discounts.
Local Connection Required
Priority given to people with local ties through work, residence, or family connections.
New Build Properties
Only applies to newly constructed homes, not existing properties.
Perpetual Discount
Discount remains for future sales, keeping homes affordable long-term.
Price Caps and Discounts
Discount Example
Market value: £400,000
30% discount: £120,000
First Homes price: £280,000
Monthly savings: Approximately £600 less per month
Eligibility Requirements
Who Can Apply?
First-Time Buyer
You (and your partner if applicable) must have never owned a home anywhere in the world.
Local Connection
Must demonstrate connection to the local area through residence, work, or family ties.
Income Limits
Household income must not exceed £80,000 per year (£90,000 in London).
Mortgage Requirement
Must purchase with a mortgage - cash buyers are not eligible.
Local Connection Criteria
Proving Local Connection
Employment Connection
Currently employed in the local area or surrounding region for qualifying period.
Residence History
Have lived in the area for a specified minimum period (varies by council).
Family Connections
Have close family members who have lived in the area for required period.
Educational Ties
Attended local schools or educational institutions for qualifying periods.
Income and Affordability
- Income verification: Must provide proof of household income through payslips, tax returns, or employment contracts
- Mortgage affordability: Must demonstrate ability to secure mortgage for discounted purchase price
- Deposit requirements: Typically need 5-10% deposit of discounted price, not market value
- Additional costs: Must afford all associated purchase costs including legal fees and surveys
Application Process
Step-by-Step Application
First Homes Application Process
Find Available Properties
Search for First Homes developments in your local area through council websites or property portals.
Submit Initial Application
Complete eligibility form with local council or housing association managing the scheme.
Eligibility Assessment
Council verifies your eligibility including local connection and income criteria.
Priority Ranking
Eligible applicants ranked by local connection strength and other council criteria.
Property Allocation
If selected, you'll be invited to reserve and purchase your chosen property.
Required Documentation
Identity & Residence
Passport, driving license, council tax bills, utility bills proving local residence.
Employment Proof
Employment contract, payslips, employer confirmation of local workplace location.
Financial Evidence
Bank statements, mortgage agreement in principle, proof of deposit savings.
Family Connections
Birth certificates, marriage certificates, proof of family members' local residence.
Check Your Eligibility
Use our affordability calculator to see if First Homes prices fit your budget and mortgage capacity.
Affordability CalculatorPriority Groups and Local Variations
National Priority Order
Standard Priority Sequence
1. First-time buyers with local connection | 2. Key workers with local connection | 3. First-time buyers without local connection | 4. Other eligible purchasers
Local Authority Variations
| Criteria | National Minimum | Local Discretion |
|---|---|---|
| Discount level | 30% minimum | Can increase to 40% or 50% |
| Income cap | £80,000 (£90,000 London) | Can reduce but not increase |
| Local connection period | No minimum specified | Typically 3+ years residence/work |
| Key worker definition | Not specified nationally | Defined by local authority needs |
Key Worker Categories
- Healthcare workers: NHS staff, care workers, emergency medical personnel
- Education professionals: Teachers, teaching assistants, school support staff
- Emergency services: Police officers, firefighters, paramedics
- Local government: Council employees providing essential services
- Other essential workers: Defined by individual local authorities
Property Types and Locations
Eligible Properties
New Build Only
Properties must be newly constructed, not conversions or existing homes.
All Property Types
Houses, flats, and maisonettes all eligible if part of qualifying development.
Developer Provision
Usually part of larger developments with planning permission requirements.
Size Requirements
Must meet local space standards and be suitable for permanent residence.
Finding First Homes
Local Council Websites
Check your local authority website for current and upcoming First Homes developments.
Housing Association Partners
Many schemes managed by housing associations on behalf of local authorities.
Property Search Websites
Some First Homes listed on Rightmove, Zoopla with "First Homes" designation.
Developer Marketing
Contact developers directly for new developments in your target area.
Restrictions and Resale Rules
Ownership Restrictions
Important Limitations
First Homes come with permanent restrictions. You cannot rent out the property and must live there as your main residence. Subletting or using as second home is prohibited.
Resale Requirements
When You Sell
Perpetual Discount
Must sell at minimum 30% discount to future First Homes eligible buyers.
Eligible Buyers Only
Can only sell to people meeting First Homes eligibility criteria.
Marketing Period
Must market to eligible buyers for specified period before alternative options.
Council Right of Refusal
Local authority may have right to purchase if no eligible buyers found.
Long-term Implications
- Equity limitation: Your share of house price growth limited by discount requirement
- Mortgage considerations: Some lenders may have specific terms for First Homes
- Insurance requirements: May need specialist insurance due to ownership restrictions
- Moving considerations: Cannot upgrade within First Homes as you become ineligible after first purchase
Financing Your First Home
Mortgage Considerations
Specialist Mortgage Support
Many major lenders offer mortgages for First Homes. Some provide preferential rates or terms recognizing the government backing and ongoing affordability measures.
Deposit Requirements
Deposit Calculation Example
Market value: £300,000
First Homes price (30% off): £210,000
5% deposit required: £10,500
Mortgage needed: £199,500
Savings vs market price: £4,500 deposit saving
Additional Financial Support
Help to Buy Equity Loan
Can combine with Help to Buy for additional deposit assistance on new builds.
Shared Ownership
Some areas offer First Homes through shared ownership for even lower initial costs.
Local Authority Loans
Some councils offer additional deposit loans for First Homes purchases.
Employer Schemes
Key worker employers may provide additional financial assistance.
Pros and Cons Analysis
Advantages of First Homes
Benefits
Significant discount on new properties | Priority for local people | Lower mortgage and deposit requirements | Quality new build homes | Government backing provides security
Potential Drawbacks
Considerations
Limited resale flexibility | Equity growth restriction | Cannot rent out property | Limited property choice | May not be available in all areas
Comparison with Other Schemes
| Scheme | Discount/Benefit | Restrictions |
|---|---|---|
| First Homes | 30%+ discount | Resale restrictions, local connection required |
| Help to Buy | 20% equity loan | New build only, repayment terms |
| Shared Ownership | Part buy/part rent | Rent on remaining share, staircasing costs |
| Right to Buy | Up to 70% discount | Must be council tenant, clawback period |
Common Questions and Concerns
Frequently Asked Questions
Can I rent out rooms?
Generally no - the property must be your main residence and subletting is typically prohibited.
What if I need to move?
You can sell but must follow resale restrictions and sell to eligible buyers at discounted price.
Are all councils participating?
Not all areas have First Homes developments - check with your local authority.
Can I buy another home later?
Yes, but you cannot remain in the First Home as it must be sold to another eligible buyer.
Professional Advice Needed
- Legal implications: Understand all restrictions and long-term commitments
- Financial planning: Consider impact on future property plans and equity growth
- Mortgage advice: Ensure you understand terms and conditions specific to First Homes
- Insurance requirements: Check if specialist buildings or contents insurance needed
Next Steps
Getting Started
Action Plan
Check Eligibility
Verify you meet income, first-time buyer, and local connection requirements.
Research Local Schemes
Contact your local authority to understand their specific First Homes criteria and availability.
Calculate Affordability
Work out mortgage capacity and ensure you can afford discounted prices plus all costs.
Prepare Application
Gather all required documentation and submit your eligibility application.
Regional Variations
The First Homes scheme is implemented differently across England. Some areas may not have any developments yet, while others may have modified criteria. Always check with your specific local authority for current availability and local requirements.