First Homes Scheme 2026: 30-50% Discount on New Builds — Who Qualifies?

What is the First Homes scheme?

The First Homes scheme was launched in June 2021 as a planning policy requirement. Under the scheme, property developers must set aside a proportion of new homes and sell them at a minimum 30% discount below open market value to eligible first-time buyers.

The scheme is delivered through Section 106 planning obligations — developers negotiating planning permission for new housing developments agree to provide a certain number of First Homes as a condition of consent. The proportion varies by local authority but the government's policy requirement targets at least 25% of affordable housing from developers to be delivered as First Homes.

Some local councils — particularly in high-demand areas — require the discount to be 40% or 50% rather than the minimum 30%.

The scheme is currently the primary route for first-time buyers to access discounted new-build homes in England following the closure of Help to Buy: Equity Loan in April 2023.

Eligibility criteria

Who qualifies

To purchase a First Home you must meet all of the following:

1. First-time buyer status: you have never previously owned (or co-owned) a home anywhere in the world, including inherited properties or gifts.
2. Household income: total household income of all people who will be named on the mortgage must be £80,000 or less per year (£90,000 or less in Greater London).
3. Primary residence: you must intend to occupy the property as your only or main home. Buy-to-let or investment use is prohibited.
4. Mortgage requirement: you must obtain a mortgage for at least 50% of the discounted purchase price. Cash purchases are not permitted under the scheme.
5. UK resident: you must be a UK resident at the time of purchase.

Additional local criteria

Local authorities can add further eligibility requirements, such as:

• Connections to the local area (living or working in the area for a minimum period).
• Specific occupational criteria (key workers such as NHS staff, teachers, emergency services).
• Lower income caps than the national threshold.

Always check with the local Help to Buy agent covering the area of your intended purchase for specific local requirements.

Price caps

After applying the discount, the purchase price must not exceed:

• £420,000 in Greater London
• £250,000 in all other areas of England

These caps mean that in very high-value areas (central London, for example), properties with a 30% discount may still exceed the price cap and be ineligible for the scheme. Homes that exceed the cap after discounting cannot be sold as First Homes.

How stamp duty works on a First Homes purchase

This is a common source of confusion. SDLT is calculated on full open market value, not the discounted price you pay.

The government introduced this rule specifically to prevent a tax avoidance loop: if SDLT were charged on the discounted price, buyers would pay less SDLT than they would on a comparable open market purchase — a double subsidy.

First-time buyer SDLT relief

Standard first-time buyer SDLT thresholds in 2026/27 (England):

Because SDLT is calculated on market value (not discounted price), and many First Homes have market values in the £280,000–£400,000 range:

• Market value ≤ £300,000: SDLT = £0 (FTB nil rate covers entire value).
• Market value £300,001–£500,000: SDLT = 5% on amount above £300,000 only.
• Market value above £500,000: FTB relief does not apply; standard rates on the full amount.

Worked example: Mark and Emma in Leeds

Mark (28) and Emma (26) are looking to buy together in Leeds. Neither has previously owned a home. Their combined household income is £75,000 per year.

A developer is offering a 3-bedroom new build through the First Homes scheme. The open market value is £220,000. The First Homes discount is 30%.

Purchase price

£220,000 × (1 − 30%) = £154,000 (the price Mark and Emma pay)

Mortgage requirement

They must mortgage at least 50% of £154,000 = £77,000 minimum.

They save a £30,000 deposit. Mortgage needed: £154,000 − £30,000 = £124,000.

Mortgage-to-value ratio: £124,000 ÷ £154,000 = 80.5% — a comfortable LTV for mortgage lenders.

SDLT calculation

SDLT is on the market value of £220,000 (not £154,000).

As first-time buyers: market value £220,000 ≤ £300,000 → SDLT = £0.

Monthly mortgage cost

£124,000 mortgage over 25 years at 4.5% interest: Monthly repayment = approximately £688/month.

Comparison: buying at full market price

If Mark and Emma bought the same property at open market value without First Homes:

• Purchase price: £220,000
• Deposit needed for 80% LTV: £44,000 (vs £30,000 under First Homes — harder to save)
• Mortgage: £176,000
• Monthly repayment at 4.5% over 25 years: approximately £975/month
• SDLT on £220,000 as FTB: £0 (same — below £300k threshold)

Monthly saving from First Homes: £287/month = £3,444/year.

The resale covenant

When Mark and Emma come to sell, they must:

1. Value the property at current open market value.
2. Apply the same 30% discount.
3. Sell to an eligible First Homes buyer.

If market values have risen to £300,000 by the time they sell, they must sell at £210,000 (30% below £300,000). This is below the market value gain they would see on an unrestricted property — the appreciation is shared with future buyers.

However, their original purchase was £66,000 below market value. Even after the discount obligation on resale, they participate in all the capital growth on the discounted price paid.

First Homes vs other schemes

Shared Ownership gives access to a wider range of properties and price points but involves ongoing rent payments to the housing association on the unowned share (typically 2.75% of the unowned share annually). The combined mortgage and rent often exceeds a standard mortgage on the same property.

How to find First Homes properties

1. Search Homes England's Help to Buy agent website for your region — they hold registers of available First Homes.
2. Ask individual developers (Persimmon, Barratt, Taylor Wimpey, Bellway, etc.) whether any of their current developments include First Homes plots.
3. Check local authority websites — some councils publish their Section 106 affordable housing commitments.
4. Work with an estate agent who specialises in new-build homes in your area.

First Homes are typically released in phases as developments are built. Register your interest early — eligible buyers are selected on a first-come, first-served basis within eligibility criteria.

Mortgage availability for First Homes

The First Homes restriction means lenders must be comfortable that the property can be resold under the scheme. Participation has grown significantly since 2021:

• Most major high-street lenders (Halifax, NatWest, HSBC, Nationwide, Barclays, Santander) now offer First Homes mortgages.
• Some specialist lenders and smaller building societies may not.
• Your mortgage adviser or broker should specifically confirm First Homes eligibility before you proceed.

As with all new-builds, many lenders cap LTV at 85% or 90% on new-builds generally, so a minimum 10–15% deposit may be required for the best rates regardless of the First Homes discount.

Sources

• gov.uk: First Homes scheme: buyers' information
• Homes England: Help to Buy and First Homes
• HMRC: Stamp Duty Land Tax — relief for first-time buyers
• gov.uk: Section 106 agreements — local authorities