The First Homes scheme: how it works and who can apply
By Sam Kane · Last checked 9 October 2026 · Covers England only
The First Homes scheme lets first-time buyers in England buy a new-build home for 30% to 50% less than its market value. The scheme is still open, but the government no longer asks councils to include First Homes in new developments, so very few are now being built. You still need a mortgage for at least half the price, so the lender will read your credit file.
The short version
- First Homes are new-build homes sold at a discount of at least 30%, and up to 50% in some areas.
- You must be a first-time buyer, aged 18 or over, with a household income of £80,000 or less (£90,000 in London).
- The price after the discount has a cap: £250,000, or £420,000 in London.
- The discount stays with the home. When you sell, you sell at the same discount to another eligible buyer.
- You need a mortgage for at least half the price, so lenders check your income and your credit file as usual.
- Supply is low. Since December 2024, councils choose whether to ask for First Homes at all, and some have stopped.
Is the First Homes scheme still running?
Yes, but it is shrinking. On 8 October 2026, GOV.UK still listed First Homes as a way to buy, and its guide was updated on 2 October 2026.
What changed is the planning rule behind it. From 2021, councils in England were expected to make at least a quarter of the affordable homes on new developments First Homes. When the government updated the National Planning Policy Framework on 12 December 2024, that minimum no longer applied. Councils can still ask for First Homes where they meet a local need, but they do not have to. Several councils have since dropped their First Homes policies.
The government published a new National Planning Policy Framework on 17 August 2026. It does not name First Homes at all. Its list of affordable housing still includes homes sold at a discount of at least 20% below market value, so councils can still ask builders for discounted homes for sale.
So the scheme has not closed, but you may find few or no First Homes where you want to live.
Who can buy a First Home?
GOV.UK lists these national rules. You must:
- Be 18 or over.
- Be a first-time buyer. If you buy with someone else, they must be a first-time buyer too.
- Earn £80,000 or less a year before tax, or £90,000 or less if the home is in London. For joint buyers, this is your total income together, based on the last tax year.
- Get a mortgage for at least half the price of the home.
- Live in the home as your only or main home.
Local rules
Councils can add their own rules for the first 3 months a home is on sale. For example, they can give priority to key workers, people who already live in the area, or people on lower incomes. After 3 months, anyone who meets the national rules can buy.
Some people do not have to meet the local rules. These include members of the armed forces, veterans who left in the last 5 years, and some of their partners.
How much is the discount, and is there a price cap?
The discount is at least 30% off the market value. A council can set it at 40% or 50% if it shows there is a local need.
After the discount, the price must not be more than £250,000, or £420,000 in Greater London. A council can set a lower cap, but not a higher one.
| Market value | Discount | Price you pay | Deposit at 5% of the price |
|---|---|---|---|
| £250,000 | 30% | £175,000 | £8,750 |
| £300,000 | 30% | £210,000 | £10,500 |
| £300,000 | 40% | £180,000 | £9,000 |
| £400,000 | 50% | £200,000 | £10,000 |
These are worked examples, not real homes. Your deposit is based on the price you pay, not the full market value, so a discount can make the deposit smaller too. Read our guide to how much deposit you need for a house for the full picture.
What happens when you sell a First Home?
This is the part people often miss. The discount is attached to the home for good.
- You can usually only sell to someone who is eligible for a First Home.
- You must sell at the same percentage discount, based on the market value when you sell.
- You tell your council, use an estate agent, and get a valuation from a surveyor registered with RICS, the body for chartered surveyors.
For example, if you bought with a 30% discount and the home is now valued at £200,000, the most you can sell it for is £140,000.
If you have tried to sell as a First Home for 6 months or more, or if selling that way would cause you severe problems, you can ask the council to let you sell at full price. If it agrees, you pay back the same percentage of the sale price.
How do you apply for a First Home?
- Find a First Home for sale. Ask your council, or look for builders and estate agents who list First Homes in your area.
- Talk to the builder or estate agent. They check that you meet the rules and help you fill in the application. They send it to the council. Some builders take a reservation fee, which is refunded if your application is turned down.
- Name a conveyancer. This is the solicitor or licensed conveyancer who does the legal work. Your application must include their details.
- Wait for the council to check your application. It contacts the builder or agent, your conveyancer and your mortgage adviser, if you have one.
- Apply for your mortgage. It must cover at least half the price.
- Exchange contracts when the council agrees. Your conveyancer asks the council first.
Builders can offer extras such as cash back, but these must be worth no more than 5% of the discounted price. You may be able to use a Lifetime ISA towards a First Home.
Do you still need a good credit file for First Homes?
Yes. The discount lowers the price, but you still borrow most of the money from a bank or building society. The lender checks your income, your spending and your credit file at Experian, Equifax and TransUnion, just as it would for any other home.
Not every lender offers mortgages on First Homes, because of the resale rules. A mortgage broker can tell you which lenders do. Our guide to the credit score you need for a mortgage explains what lenders look for.
Rent is likely your biggest bill, and Report My Rent can add your rent payments to your Experian, Equifax and TransUnion credit files each month, so a lender can see them.
What else can help if there is no First Home near you?
- The Mortgage Guarantee Scheme covers homes, new or old, across the UK. It helps lenders offer loans to buyers with a 5% deposit.
- Deposit Unlock helped buyers of new-build homes with a 5% deposit, but it closed to new buyers in April 2026.
- A few lenders offer a 100% mortgage to renters with a strong record of paying rent.
- Shared ownership and the Lifetime ISA are covered in our renter to first-time buyer guide.
- If you want to buy the home you rent now, read our guide to rent to buy.
Common questions
Can I buy a First Home with a friend?
Yes, if you are all first-time buyers and apply together. Your total income must be £80,000 or less, or £90,000 in London, even if not all of you take out the mortgage.
Is a First Home the same as shared ownership?
No. With a First Home, you own the whole home and pay no rent. With shared ownership, you buy part of a home and pay rent on the rest.
Can I use a Lifetime ISA for a First Home?
Yes, if you meet the Lifetime ISA rules. The home must cost £450,000 or less, and every First Home is under that, because First Homes are capped at £250,000, or £420,000 in London. You must also buy at least 12 months after your first payment in.
Can I sell a First Home at full price?
Only with the council’s agreement. If you have tried to sell as a First Home for 6 months or more, or selling that way would cause you severe problems, you can ask the council. If it agrees, you pay back the same percentage of the sale price.
Is there a First Homes scheme in London?
Yes. In London the price after the discount can be up to £420,000, and the household income limit is £90,000.
Does the First Homes scheme cover Scotland or Wales?
No. First Homes is for England only. Scotland, Wales and Northern Ireland run their own schemes.
Sources
- GOV.UK, First Homes scheme, how to apply and selling the property, read 8 October 2026
- Ministry of Housing, Communities and Local Government, First Homes planning practice guidance, read 8 October 2026
- Vale of White Horse District Council, First Homes, on the December 2024 change to the planning framework, read 8 October 2026
- Ministry of Housing, Communities and Local Government, National Planning Policy Framework, 17 August 2026, including chapter 6 and the glossary, read 9 October 2026
- Bromsgrove District Council, First Homes briefing paper, April 2026
This guide is general information, not financial advice. A mortgage is a loan secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.