Calculate First Homes Scheme Savings
Frequently Asked Questions
What is the First Homes scheme in the UK?
First Homes is a UK Government scheme launched in 2021 for England only. It allows eligible first-time buyers to purchase a new-build home at a discount of at least 30% below the open market value. In some areas, local councils or developers can offer discounts of 40% or 50%. The discounted price must not exceed £250,000 (or £420,000 in London) after the discount is applied. The scheme is administered through registered developers and is not available on the secondary market.
Who qualifies for the First Homes scheme?
To be eligible you must be a first-time buyer in England; have a household income of no more than £80,000 per year (£90,000 in London); be purchasing with a mortgage (not cash-only); and the property must be your only home. Local councils may impose additional requirements such as a local connection to the area (e.g. working or living locally for a certain period), or key worker status (NHS, police, fire service, teachers). Developers and councils can also tighten eligibility criteria for specific sites.
Is the First Homes discount permanent?
Yes. The First Homes discount is permanently attached to the property and applies to all future sales in perpetuity. When you sell the property, it must be sold at the same percentage discount off the then-current open market value to another eligible first-time buyer. This means you cannot sell at the full market price to recapture the discount. The discount travels with the property through its entire life, ensuring it remains affordable for future first-time buyers in the area.
Can I sell a First Homes property on the open market?
No. You must sell a First Homes property to another eligible first-time buyer at the same percentage discount applied when you originally purchased it. The sale must be through the same First Homes scheme process. If you cannot find an eligible buyer, there are provisions for the local council to purchase the property. This restriction is registered as a legal charge on the property at HM Land Registry and cannot be removed. It is a key condition of participating in the scheme.
First Homes vs Shared Ownership — which is better?
First Homes gives you 100% ownership of the property at a discounted price, meaning all capital growth (on the discounted value) is yours, and there are no ongoing rent payments. Shared Ownership means you buy a share (typically 25–75%) and pay rent on the remainder, with the option to staircase to full ownership over time. First Homes is generally considered the simpler and potentially more valuable option if you qualify, as you own the whole property immediately and benefit from all future price growth. Shared Ownership can allow entry into higher-value areas where First Homes price caps are restrictive. Compare both options carefully for your local market.