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What is the First Homes scheme and who is eligible?

First Homes  Iver Heath, UK. 17th November, 2023. A For Sale sign outside a block of flats in Iver Heath, Buckinghamshire. Latest figures show that house prices fell again by an average of £1,497 across the UK in September, however, in some areas, prices are on the increase. Credit: Maureen McLean/Alamy
The First Homes scheme is only available in England. (Maureen McLean)

Rising mortgage costs, costly properties and the years needed to save for a deposit – all amid a cost of living crisis – has left many struggling to jump on the property ladder. However, there are schemes such as First Homes, that will help you achieve the dream of owning your own house.

What is the First Homes scheme?

The government-run First Homes scheme launched in 2020 and enables first time buyers to purchase a new build property for 30-50% below its market value. When you sell the property on, you must sell it to someone else using First Homes and with the same level of discount. First Homes is currently only available in England.

Who is eligible?

All purchasers need to be first time buyers, over 18, be able to get a mortgage for at least half the property’s value and not earn more than £80,000 a year before tax (£90,000 if the property is in London). Some councils may prioritise certain groups, such as key workers, those in the armed forces, people who already live in the area or those on lower incomes. Once you own the property, however, you no longer have to meet this eligibility criteria.

How does it work?

First Homes allows you to purchase a new build home that costs less than £250,000 (£420,000 in London), after the discount has been applied. The property is then yours and you can decorate it as you like but, if you let it out or decide to sell, there are certain restrictions.


In terms of renting, you can only do this if you inform your local council and mortgage lender, and you only rent it for two years in total. If you plan to sell the property, you need to pass on the same percentage discount, based on the property’s market value at the time of sale.


The main advantage of this scheme is that you buy a property at a hugely discounted rate. “You get a 30-50% discount on the value of the property, which means you can move into a more expensive home sooner,” says Carly-Marie Cheeseman, of Clifton Private Finance.

Read more: 9 expert predictions on UK house prices, mortgages and renting

Unlike shared ownership, you also own the property in its entirety from the start and – while there are some restrictions – it is easier to rent it out if you need to. John East, head of New Homes at John D Wood & Co., flags another key difference between the schemes: “In comparison to shared ownership, First Homes differs as there is no rent paid on the equity balance, and the ownership amount remains at a fixed discount.”


There are a few disadvantages with First Homes that people should be aware of and understand fully before committing to the scheme.

“The drawbacks include that the discount is tied to the property's title, impacting its resale value, and it only applies when selling,” says East. “Additionally, maximum income restrictions and eligibility limited to first-time buyers may limit the accessibility of the scheme for some individuals.”

“As a buyer, you’re restricted to very specific new builds, so the chances of finding the perfect home for you are limited compared to having the whole of the market available,” says Cheeseman.

“Also, when you come to sell your property, the only people eligible to buy your home are those who are also looking at the scheme. This is a massively reduced market compared to a normal property, and could mean your house will take longer to sell or you might have to drop the price to attract more buyers.” She also flags that, as your property will be harder to sell, it’s likely you’ll be a less attractive buyer yourself.

Hand holding a little house with an orange roof. Conceptual image with space for copy.
There are advantages and disadvantages to the First Homes scheme. (Catherine Falls Commercial via Getty Images)

In addition, the number of mortgage lenders who lend on the First Homes scheme is more limited than on the traditional market. “Only a very small handful of mortgage lenders accept applicants for the First Homes scheme, so it can be more difficult to raise the funds,” says Cheeseman.

“If you’re a first time buyer with a CCJ (county court judgment) or poor credit history, you’re essentially unable to use this scheme – because you’ll struggle to get a mortgage from these lenders. It’s unfortunate, because these are the people that may need the most help from the government to get on the housing ladder.”

Who is participating?

There are several participating developers in the scheme, and you can contact them directly to find properties in your local area that are included. Participating developers include:


Barratt Homes

Taylor Wimpey

David Wilson Homes


Penny Farthing Homes

How it compares to other FTB schemes?

In terms of other schemes designed to help first time buyers onto the property ladder, shared ownership is probably the most widespread. “[First Homes] is a totally different scheme, but the main difference I’d say is you always retain the benefits with shared ownership, whereas with the First Homes scheme it’s a short-term win, because when you sell, you’ll lose the discount,” says Cheeseman.

Read more: How first-time buyers can get on the property ladder in a cost of living crisis

With shared ownership, you can gradually buy more shares in the property and build up equity – known as staircasing – which offers a clear and signposted route to home ownership. The First Homes scheme feels like more of a jump start than the full journey.”

Other first time buyer arrangements include Deposit Unlock, where you can buy a new build home from participating developers with just a 5% deposit, and Rent to Buy (or London Living Rent in the capital), where your rent is subsidised in the hope you’ll eventually be able to afford to buy the property.

Watch: UK house prices creep up as experts predict 'smoother year' for buyers and sellers

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