First Homes Scheme Explained

Are you looking for a mortgage using the First Homes Scheme?

Home Government Mortgage Schemes First Homes Scheme Explained
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: May 2, 2024

Recently launched by the U.K government, the First Homes scheme is specifically designed to assist first-time buyers, particularly those who are key workers, take their first steps onto the property ladder.

If you’ve ever dreamt of owning your own house but felt prices were always just out of reach, the good news is the first homes scheme can, in some instances, provide a discount on the price of a new property of up to half its current market value. With the help of an experienced mortgage and property advisor to guide you through the process, you could be sitting in your new home before you know it.

What is the First Homes scheme?

Launched in June 2021, the First Homes scheme provides first-time buyers with an opportunity to purchase a new-build property (both houses and flats are available) for a discounted price of anywhere starting from 30% up to 50% on the market value. There’s a price cap on qualifying properties, after the discount, of £250,000 outside London and £420,000 within London.

The main idea and thrust behind this government scheme is to help people eligible to buy a property within their local area rather than feeling the need to move away due to rising house prices.

The government believes the First Homes scheme will be particularly advantageous for first-time buyers who are also key workers (NHS staff, firefighters, supermarket employees etc), helping them get on the property ladder and still live near their place of work.

How the discount works

The amount of discount is at the discretion of the local council in the area where the property is being built and is agreed directly with the developer.

The minimum discount is 30% but it can be as high as 50% in certain cases where the council deems appropriate. If you’re a key worker, for example, and want to buy a house locally for ease of commuting you can definitely make a case for a higher discount.

Once a discount has been given it becomes locked into that property. So, if you’re given a 30% discount to buy a home, that discount is passed on to any potential first-time buyers who may want to buy it from you in the future.

House prices are capped, after the discount, at £420,000 within the London area and £250,000 anywhere outside London.

Eligibility rules are covered in more detail below but, in a nutshell, if you’re a first time buyer with a combined household income below £80,000 (£90,000 in London) you can apply for a discount on a qualifying new-build property.

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Eligibility criteria

As the name implies, not everyone can apply for a discount via the First Homes scheme. To see whether you’d be eligible for the first home scheme or not, take a look at the main rules here:

  • Must be a first-time buyer
  • Total household earnings
  • Maximum house price
  • Local homes for local people
  • Locked-in discount
  • Mortgage required

Must be a first-time buyer

If you’ve ever owned a property before – whether one bought by yourself or inherited – you won’t be eligible for this scheme. If you’ve only ever rented properties up to this point you can apply. This rule also applies on a joint basis – both of you must fit this criteria for you to be eligible.

Total household earnings

If you’re applying for this scheme your combined annual income must be below £80,000 (£90,000 if you live in London).

Maximum house price

The aim of the scheme is to help lower income households get their feet on the property ladder. As we’ve already mentioned, there’s a price cap on qualifying properties, after the discount, of £250,000 outside London and £420,000 in London.

This still gives plenty of scope for the availability of larger properties, if that’s what you’re looking for. For example, a house outside London with a full market value of £350,000 would qualify for this scheme (£350,000 – 30% = £245,000).

Local homes for local people

A key aspect of the First Homes Scheme is giving first-time buyers the opportunity of identifying a property to buy in their local area. Councils will give priority to anyone currently living in their jurisdiction with a desire to remain there, when vetting applications.

The actual definition of what qualifies someone as ‘local’ is a little unclear. However, any first-time buyer who lives and works locally, and has family connections in the same area should be viewed favourably for this scheme.

This again illustrates the value of speaking with an advisor who has dealt with the application process for a First Homes scheme before. They’ll be able to help you with all the relevant paperwork involved to give you the best chance of qualifying for the discount on a new-build property in your area.

Locked-in discount

Whatever discount is given on a qualifying property under the scheme must also be passed on to any prospective first-time buyers who want to buy it from the current owner in the future. It’s not just a ‘one time’ incentive, it remains in place on that property for others too.

Mortgage required

A mortgage must be approved for at least 50% of the purchase price after the discount has been given. This means even if you have enough savings to purchase the property outright you won’t qualify for the discount.

This is good news for anyone who has, up to now, struggled to save enough for a large mortgage deposit. Many well-known lenders are keen to get involved with this scheme and the experienced mortgage brokers we work alongside will help you find the best offers that fit with what you’re looking for.

How to apply for a mortgage through the first home scheme

If you fit the criteria outlined above and want to apply for a discount through this scheme the best way to do it is to contact a mortgage and property expert. They will already have a handle on exactly which developers in your area are participating in this initiative.

As things stand, there isn’t a dedicated website available which will help you identify who’s involved. If you get in touch with us we can introduce you to an advisor in your location who will be able to help you all the way through this process and secure the discount you may be entitled to.

The government has announced they expect 1,500 qualifying homes to be completed and available this year, with a further 10,000 homes each year thereafter. So, if you want to take advantage of this opportunity it’s worth making a move straight away to avoid missing out.

How a mortgage broker can help you get a loan through the scheme

You’ll need to take out a mortgage of at least 50% of the property’s value, but with many of the major banks and mortgage lenders already signed up to support the scheme there should be lot’s of great deals on offer.

This is where working with an experienced mortgage broker, rather than trying to work through the process on your own, will provide major benefits and save you a lot of time, effort and potentially some money as well.

Our advisor-matching service is designed to select a professional with the appropriate experience of both the mortgage and property market. They’ll already know and understand what’s available for first-time buyers and be able to select a range of packages that best suit your particular circumstances.

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Alternative schemes for first-time buyers

The First Homes scheme is a brand new initiative that sits alongside several existing incentives designed to help people take their first steps on the property ladder, such as:

If you don’t qualify for the first homes discount, as you can see there’s still a lot of options available to you. When you speak with one of the advisors we work with, they will run through all of the options open to you so you can decide which works best in the long run.

Get matched with a first homes scheme expert

Taking those first steps onto the property ladder can be the hardest you’ll take. The First Homes scheme has been created to take a lot of those worries away by making this move much more realistic.

There’s never been an initiative launched by the government quite like this one. To a degree, it feels a little too good to be true but it isn’t. However, it’s really important to seek guidance from an advisor who knows and has experience of this and all other incentives so you can make the right choice.

This is where we can help. We pay great attention to your needs and requirements to make sure the advisor we match you with is able to hit the ground running and take you through the process of buying a new house from start to finish.

Call 0808 189 2301 or make an enquiry and we can arrange a free, no-obligation call with a mortgage and property specialist today.


As things stand, the First Homes scheme is only available for new-build properties in England and not in Wales, Scotland or Northern Ireland.

However, this could change in the future so it’s well worth getting in touch with us and having a chat with an advisor we work with. They’ll be able to keep you updated on any changes as soon as they happen.

Due to the limited number of new-build properties available under the scheme, local councils will give priority to applications from prospective first-time buyers who already live in the area.

However, councils will consider applications from outside their area once a qualifying property has been available for sale for longer than three months.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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