First Homes scheme initiative

Launched in June 2021, the First Homes scheme is a government initiative designed to help local first-time buyers and key workers onto the property ladder by offering homes at a discount of 30% off the market price. Local areas will be able to set a larger discount to ensure the homes are affordable to local people. The scheme, which currently only runs in England, alongside existing shared ownership, Right to Buy and Help to Buy* initiatives as well as new government-backed 95% mortgages, has been created to give first-time buyers access to new-build properties at a discounted price.

Conventional Mortgage Products 
Buyers will purchase First Homes in the usual way and will have access to conventional mortgage products. A number of mortgage lenders have pledged to support the scheme. When owners of First Homes decide to move up the ladder, their home will be independently valued. Once the home is sold, the discount will be passed on to the new owner with the discount (of at least 30%) applied to the new value.

First Homes Example
• Market Price £300k
• First Homes discount of 30%
• First Home buyer pays £210k
When the owner is looking to sell, the new value of their home is £350k. This is allocated to a new first-time buyer or prioritised worker by the local authority, and it is sold with a 30% discount at £245k.

Below Market Price
This means homes will always be sold below market price and local communities will benefit for generations to come, with local authorities continuing to allocate these homes to first-time buyers and able to prioritise local workers. First Homes are for people to live in and are not permitted to be used as holiday homes or as buy-to-lets. These are for local people to take their first step onto the ladder.

What are First Homes?
• First Homes are flats and houses built on developments up and down the country. They will be no
different from other properties except they will be sold with a discount of at least 30%
• They will be sold to local people who want to stay in the community where they live or work but are
struggling to purchase a home at market prices
• They will be prioritised for first-time buyers, serving members and veterans of the Armed Forces, and key workers, such as nurses, police and teachers
• The discount will be passed on to future buyers when First Homes are resold so more people can be helped onto the ladder

Limited Number of Plots
First Homes will be offered on a limited number of plots in most new developments throughout England. You will need to check whether the builder is currently including First Homes as part of the development. If yes, you must qualify through the eligibility criteria and apply through the builder.

To be eligible, purchasers of First Homes must be first-time buyers and have a household income not
exceeding £80,000 and £90,000 in London (or lower if set by the local authority). Post-discount price caps apply to the first sale of the property of £250,000 across England and £420,000 in London (or lower if set by the local authority).

A First Home should be the buyer’s only home and a purchaser will need to use a mortgage or home
purchase plan for at least 50% of the purchase price of the home. There will need to be a local connection and/or key worker status as determined by the relevant local authority.

The First Home Scheme initiative closed in September 2023.

Don’t forget, our professional friendly advisers are on hand to support you and can help you explore all of your options.

To find out more visit:

• England: https://www.ownyourhome.gov.uk/all-schemes/
• Scotland: https://www.gov.scot/policies/homeowners/
• Wales: https://gov.wales/getting-help-buy-home
• Northern Ireland: https://www.nidirect.gov.uk/information-and-services/buying-selling-and-renting-home/home-ownership-schemes

*The Help to Buy equity loan scheme closed to new applications on 31 October 2022.