What is First Homes Scheme?
First Homes is a new scheme designed to help local first-time buyers and key workers onto the property ladder, by offering homes at a discount of 30% compared to the market price.
The discounts will apply to the homes forever, meaning that generations of new buyers and the local community will continue to benefit every time the property is sold.
How Does the Scheme Work?
Every home purchased through the First Homes scheme is independently valued by a qualified surveyor. This ensures that the discount you receive is calculated fairly and reflects current market conditions.
Once the discount is applied, there are limits to how much a First Home can cost:
- Up to £250,000 in England
- Up to £420,000 within London
Local councils may impose lower price caps to reflect local housing needs and affordability, so limits can vary depending on where you’re buying.
You are free to decorate, renovate, and improve your home to suit your needs. However, if you plan to sell or rent out the property in the future, you must follow the rules of the First Homes scheme. This includes:
- Selling the property to another eligible first-time buyer
- Maintaining the same level of discount on the resale price
- Getting the property independently revalued at the time of sale
- You can let the whole property for up to two years if you inform the council and get your lender’s approval
- You may let the property for over two years in special cases like separation, redundancy, or caregiving duties
- You can rent out a room indefinitely, provided it’s your main home and you live there during the tenancy
These rules ensure the benefit of the scheme is passed on to future buyers, keeping homes affordable for the long term.
Am I Eligible?
- All purchasers must be first-time buyers, even when more than one person is buying the home.
- Applicants must meet any local connection requirements and key worker criteria set by the local authority.
- To qualify for a First Home, the total household income must be below £80,000, or £90,000 in London.
- A minimum 5% deposit is required.
- Buyers must secure a mortgage for at least 50% of the property’s value.
Frequently Asked Questions
Local exemptions for armed forces and their families
You do not have to be a key worker or live in the area if you’re:
- A member of the armed forces
- A former spouse or civil partner who’s divorced or separated from a member of the armed forces
- A widow or widower of a deceased member of the armed forces (if their death was caused wholly or partly by their service)
- A veteran who left the armed forces in the last 5 years
You still need to meet all other First Homes eligibility criteria.
If the council agrees you’re eligible
Follow these steps:
- Instruct your conveyancer.
- Apply for your mortgage. If you have a Lifetime ISA or a Help to Buy ISA, you might be able to use it to buy your First Home.
- Complete any legal documents that your conveyancer sends you.
After you’ve received your mortgage offer and completed the legal documents, your conveyancer will ask the local council if you can exchange contracts.
The council will tell you when they’ve decided on your application.
Exchanging contracts
You need to pay your deposit at the same time as you exchange contracts. After you do this, you are legally committed to buying the home.
Check with your conveyancer before you agree to exchange contracts. You should tell them if your circumstances have changed and you no longer meet the First Homes eligibility criteria.
When you’ve exchanged contracts, we will set a completion date. This is the date when the home will be ready for you to move in.
Paying Stamp Duty
The amount of Stamp Duty Land Tax you pay is based on how much you paid for your home after the discount was applied.
Letting the property
You can usually let your entire property for up to 2 years total during your ownership.
Before letting, you must:
- Notify your local council
- Check the terms of your mortgage agreement
The 2-year limit resets if the home is sold to someone else.
Letting for More Than 2 Years
Longer letting may be allowed in certain cases, such as:
- Job relocation
- Relationship breakdown
- Escaping domestic abuse
- Redundancy
- Caring responsibilities
You must get council approval and possibly mortgage lender consent.
Letting a Room
You can rent out a room for any length of time if:
- The home remains your only or main residence
- You live there while it’s being rented
Selling the property
You can usually only sell your home to someone who qualifies for the First Homes scheme. The buyer must receive the same percentage discount you originally got, based on the property’s current market value.
How to Sell
- Notify your local council that you intend to sell.
- Choose an estate agent familiar with the First Homes scheme.
- Get a RICS-registered surveyor to value your property.
Your maximum sale price is the market value minus your original discount. You may sell for less but not more.
Example: If your home is valued at £200,000 and you received a 30% discount, you must sell it for no more than £140,000.
Buyers must meet First Homes criteria, including local eligibility rules. These local rules no longer apply if the property has been listed for over 3 months.
Selling on the Open Market
You may apply to your council for permission to sell at full market value if:
- You’ve tried to sell under the scheme for 6+ months without success, or
- Selling under the scheme would cause serious hardship (e.g. bankruptcy).
The council may:
- Approve an open market sale
- Offer to buy the property at a discounted rate
- Ask you to try selling under the scheme for another 6 months
If approved, you must repay the discount to the council as a percentage of the final sale price.
Example: You bought for £175,000 with a 30% discount on a £250,000 home. If you later sell for £300,000, you must repay 30% (£90,000) to the council.