First Homes Scheme Explained: 30% to 50% Discounts for First Time Buyers

What First Homes is

First Homes is an English Government scheme launched in 2021 that requires developers of certain new build sites to sell a proportion of their homes to first time buyers at a minimum 30% discount to open market value. The discount is permanent: it stays on the property forever, so future sales must also be at the same percentage discount to the then-current market value. This is different from Help to Buy (which was a loan, not a discount) and Shared Ownership (which is part-buy part-rent).

The aim is to give local first time buyers a way onto the property ladder in their own area without competing with investors and overseas buyers at full market price.

Who is eligible

To buy a First Home you must:

1. Be a first time buyer as defined by HMRC stamp duty rules (you have never owned a home anywhere in the world)

2. Have a household income below £80,000 (or £90,000 in Greater London)

3. Need a mortgage of at least 50% of the discounted price (the scheme is not aimed at cash buyers)

4. Plan to live in the property as your only or main home

5. Meet any local connection criteria set by the local authority (residency, employment, family ties)

The local connection criteria vary by area. Some councils prioritise local key workers, some prioritise people who have lived in the area for a fixed period, some have no additional criteria. Always check with the developer and the local council before applying.

The discount

The minimum discount is 30%, but local authorities can require a higher discount of up to 50% in their area. The discount is applied to the open market value, which is determined by an independent valuer at each sale (not by the developer or the buyer).

There is also a price cap: the discounted price cannot exceed £250,000 (£420,000 in Greater London). So in expensive areas the discount may end up higher than 30% to keep the price below the cap.

Worked example:

• Open market value: £300,000
• Minimum discount: 30%
• Discounted purchase price: £210,000
• Cap check: £210,000 is below £250,000, so the cap is not the binding constraint
• You buy for £210,000

If the property had a market value of £400,000 in Greater London with a 30% discount, the discounted price would be £280,000. That is below the £420,000 London cap, so £280,000 is the price.

How the permanent discount works

The 30% (or higher) discount is locked in by a covenant on the property. When you sell:

1. An independent valuer determines the current open market value

2. The same percentage discount is applied

3. You sell at that discounted price

4. The buyer must also be a qualifying first time buyer who meets the same criteria

This means you do not get to capture the full property appreciation when you sell. If the market value has risen by 30% during your ownership, your sale price has also risen by 30% from your original purchase price (because the discount percentage stays constant). You benefit proportionally, not absolutely.

The covenant runs with the land in perpetuity, so the property remains a "First Home" for every future owner.

Mortgage availability

Most major UK lenders accept First Homes purchases, although some require specific procedures to register the discount covenant on the title. Lender appetite is generally good because the buyer is committed (must live there) and the discount provides a buffer against negative equity.

The lender will typically lend against the discounted price, not the open market value. A 95% loan-to-value mortgage on a £210,000 First Home discounted from £300,000 is £199,500, not £285,000.

Stamp Duty

The stamp duty is calculated on the discounted price, not the open market value. This is one of the financial benefits of the scheme. Combined with first time buyer relief, many First Home purchases attract zero SDLT.

How to find a First Home

First Homes are sold by participating developers on specific new build sites. The local planning authority decides which sites must include a percentage of First Homes (typically 25% of the new build allocation). To find one:

1. Check the developer's website for new build sites with First Home availability

2. Speak to the local planning authority or council housing team

3. Check national new build portals

4. Sign up for alerts on the Government's First Homes website

What to check before buying

Although First Homes are new build, the same property checks apply:

1. EPC rating: new builds should be A or B, but verify before exchange

2. Snagging: book a professional snagging survey before legal completion

3. NHBC or equivalent warranty: verify the warranty type and length

4. Service charges (for flats): ask for a service charge estimate

5. Estate management charges: many new build estates have a private management company that charges all owners regardless of tenure

Search the address on Property Passport UK at [/search](/search) once it is registered to see the verified EPC, sold price history, and other property data. New builds appear in the registry once HM Land Registry processes the first registration after completion.

Check any property in seconds with Property Passport UK

Whether you are buying through Right to Buy, Shared Ownership, First Homes, or at auction, the underlying property data matters. Property Passport UK shows verified EPC, sold price history, flood risk, listed status and tenure for every one of the 19.35 million properties in England and Wales. Search any address at [/search](/search).

Related guides

• Right to Buy explained
• Shared Ownership staircasing
• First Homes scheme explained
• Buying at auction UK guide