First Homes Scheme Explained: Who Is Eligible and How to Apply

Buying a first home can feel out of reach, but the First Homes scheme aims to make selected new‑build properties more affordable for qualifying buyers in England. It offers a significant, permanent discount on the market price, with rules set nationally and applied by local authorities through planning agreements. Understanding how eligibility works, what documents you’ll need, and how the application moves from reservation to completion can help you prepare and avoid delays.

What Is the First Homes Scheme in 2026?

The First Homes scheme is a government policy in England that enables first‑time buyers to purchase certain new‑build or newly converted homes at a discount of at least 30% off market value. Some local authorities can set higher discounts (40% or 50%) where affordability pressures are greater. Price caps apply to the discounted price: generally up to £250,000 across most of England and up to £420,000 in London. Homes are sold with a legal covenant, ensuring the same percentage discount is passed on to future buyers so the property remains affordable in the long term.

Who Qualifies for the First Homes Discount?

Eligibility focuses on genuine first‑time buyers who intend to live in the home as their only residence. Each buyer on the application must never have owned residential property in the UK or abroad. Household income must usually be £80,000 or below (or £90,000 in London). Local councils can add priorities such as a local connection requirement, residency or employment in the area, or key worker status. Buyers typically must use a mortgage or home purchase plan for at least 50% of the discounted price. Buy‑to‑let purchases and second homes are not permitted.

How the Application Process Works

Start by identifying developments that include First Homes units—sales teams and local authority planning pages often list them as part of local services. You normally reserve a plot with the developer, then submit an eligibility application to the local council or its appointed agent. Expect to provide ID, proof of first‑time buyer status, income evidence (such as payslips and P60s), and a decision in principle from a lender. If approved, the council issues an eligibility certificate. Your conveyancer then progresses contracts and searches, your lender completes valuation and underwriting on the discounted price, and the council issues a final certificate before completion.

Pros and Cons for UK Homebuyers

The main advantage is a substantial discount, which can lower both the deposit and monthly repayments. Because the discount is locked to the home, future buyers benefit too, supporting affordability in your area. However, availability is limited, often restricted to specific plots on designated sites, and local criteria can be strict. Price caps may reduce the choice of property size or location. You must live in the home and cannot sublet it, and when you sell, the required discount applies to the resale price, which can cap your proceeds compared with a market‑rate property.

Tips for Maximising Your Chances

Prepare early by collecting documents that evidence your first‑time buyer status and income. Obtain a mortgage agreement in principle tailored to the discounted purchase price, and choose lenders familiar with the scheme. If your council prioritises local connection or key workers, gather proof such as employment letters, council tax bills, or tenancy agreements. Be flexible on plot and timing, as allocation windows can be short. Work with a conveyancer experienced in section 106 agreements and be responsive to queries from the developer, council, and lender to keep the process moving.

Additional Eligibility Details and Regional Notes

The scheme applies in England; Scotland, Wales, and Northern Ireland operate separate affordable housing routes. Local authorities can adjust criteria to reflect housing pressures, so verify the precise rules in your area before reserving. Improvements you make may increase the market value on resale, but the same percentage discount still applies, so you may not realise the full uplift. If buying with a partner, both must meet the first‑time buyer definition. A minimum 5% cash deposit on the discounted price is common, but lenders set their own criteria, so requirements can vary.

Conclusion The First Homes scheme can reduce the upfront and ongoing cost of homeownership for eligible first‑time buyers, but success depends on meeting local criteria, securing the right mortgage, and acting quickly when suitable plots are released. By preparing documents, understanding the legal restrictions, and coordinating with local services and professionals, you can navigate the process more confidently.