The First Homes Scheme gives eligible first-time buyers in England a 30–50% discount on selected new-build homes, capped at £250,000 (£420,000 in London) after the discount. You'll need to be 18+, a genuine first-time buyer, earning under £80,000 (£90,000 in London), and able to secure a mortgage for at least 50% of the price. The discount is permanent and it stays with the property and passes to the next eligible buyer when you sell. Since April 2025, most First Homes purchases outside London attract no Stamp Duty at all, though London buyers may owe some on the portion between £300,000 and £420,000.

With first home ownership feeling increasingly out of reach amidst soaring property prices and high demand, the government introduced the First Homes Scheme in June of 2021.

The initiative promised to make buying your first property more affordable, offering a significant discount on the price of selected new-build homes.

But what exactly is the First Homes Scheme? How is it different in 2026/7? Who qualifies for this government first home scheme, and how can prospective buyers take advantage of it? Let's delve into the details.

Understanding the First Homes Scheme

The First Homes Scheme is a government-backed initiative designed to help first-time buyers purchase their first property with a substantial discount. The core aim is to provide affordable housing solutions for local residents, with a particular focus on key workers.

The scheme offers a discount of between 30% and 50% off the market value of eligible homes, potentially saving buyers tens of thousands of pounds. This makes the dream of owning a first home a tangible reality for many.

A First Homes property can be either a new home bought directly from a developer, or a home bought through an estate agent that someone else previously purchased through the scheme, with the discount and eligibility rules passing on to each new buyer.

However, given the current climate of high house prices and significant demand, securing a property through the First Homes Scheme is likely to be competitive. A limited number of eligible properties are available, emphasising the need for swift action if you're interested.

What Happens When You Decide to Sell Your First Homes Scheme Property?

A key feature of the First Homes Scheme is the perpetual nature of its eligibility. This means that if you decide to sell your home purchased through the scheme, the discount remains attached to the property for future first-time buyers. As the initial buyer, you won't be able to recoup the original discount upon sale, and you can only sell your First Homes Scheme property to another eligible first-time buyer.

First Home Scheme Eligibility Criteria

To be eligible for the First Homes Scheme, prospective buyers must meet several conditions:

  • Age: You must be 18 or older.
  • First-Time Buyer Status: You must be a first-time buyer. If purchasing jointly, all applicants must be first-time buyers.
  • Mortgage Requirement: You need to secure a mortgage for at least 50% of the property's purchase price.
  • Location: The property must be located in England.
  • Income Cap: Your total annual household income must be less than £80,000, or £90,000 if the property is in London, based on your income from the previous tax year.

Local authorities may apply additional eligibility criteria for the first three months a property is on the market, prioritising key workers, existing local residents, or those on lower incomes. If you're buying jointly, only one applicant needs to meet these local criteria, though all applicants must meet any local income requirements. For instance, if you're looking at Birmingham properties, the local council may set its own priority rules during that initial window.

Members of the armed forces, and their spouses, civil partners, widows, or widowers, along with veterans who left the armed forces within the last 5 years, are exempt from local key worker or residency requirements, though all other eligibility criteria still apply.

Price Caps Under the First Homes Scheme

Yes, there are price restrictions in place. To be eligible for the First Homes Scheme, the property's price after the discount must be £250,000 or less, or £420,000 or less in London, and local authorities have the discretion to set lower caps in their area.

It's worth noting that Stamp Duty Land Tax rules changed in April 2025, and this affects First Homes buyers differently depending on where they're buying. First-time buyers now pay no SDLT on the first £300,000 of a purchase, with relief tapering out entirely above £500,000.

For most First Homes purchases outside London, capped at £250,000, this means no Stamp Duty is payable at all. In London, however, where the price cap sits at £420,000, buyers may now owe Stamp Duty on the portion of the price between £300,000 and £420,000, so it's worth factoring this into your budget rather than assuming the purchase will be entirely tax-free.

Can You Combine the First Homes Scheme with Help to Buy?

The Help to Buy equity loan scheme is closed to new applicants, so it cannot be used alongside the First Homes Scheme for a new purchase. If you already hold an existing Help to Buy loan on a different property, that loan continues under its own terms but doesn't combine with a First Homes purchase.

Applying for the First Homes Scheme: Your Next Steps

If you've identified a First Homes Scheme property in your desired location, your first step is to contact the property builder directly. They will be able to confirm your eligibility for that specific property. If you meet the criteria, the builder will guide you through the application process with the relevant local authority.

Ready to Embark on Your First Home Journey?

Buying your first home, whether through the standard market or the First Homes Scheme, can feel like a big step. At Miller Rose, we're dedicated to making your first property purchase as smooth and stress-free as possible.

If you're ready to take the next step towards owning your first home, we offer real valuations and a stress-free process. Don't hesitate to contact our team or fill in the form below; we're excited to help you find your perfect property.

This field is for validation purposes and should be left unchanged.

FAQ's

Can I use the First Homes Scheme with Help to Buy?

No. The Help to Buy equity loan scheme closed to new applicants in 2022, so it can't be combined with a First Homes purchase.

Will I pay Stamp Duty on a First Homes property?

Outside London, usually not - the £250,000 price cap falls under the £300,000 first-time buyer nil-rate threshold. In London, where the cap is £420,000, you may owe 5% Stamp Duty on the portion between £300,000 and £420,000.

Can I sell a First Homes property at full market value?

No. You must sell at the same percentage discount you originally received, to another eligible first-time buyer. You can't recoup the original discount as extra profit.

Do key worker or local residency rules apply to everyone?

They can, but only for the first three months a property is marketed, and only if the local authority chooses to set them. After that window, standard national eligibility applies.

Are members of the armed forces exempt from local eligibility rules?

Yes, with some specifics: serving members, their divorced or separated spouse/civil partner, a widow or widower whose partner's death was service-related, and veterans within 5 years of leaving are exempt from local connection and key worker criteria - though they still need to meet the standard national criteria (age, income, first-time buyer status).

What if my household income goes over £80,000 after I've bought?

The income cap only applies at the point of purchase, based on the previous tax year's income - it isn't reassessed afterwards.

This article is provided for general information only and does not constitute financial, legal, or mortgage advice. First Homes Scheme eligibility, discounts, and price caps can vary by local authority and are subject to change - always confirm current criteria with the relevant local authority or a qualified adviser before proceeding with a purchase.