UK Discount Market Sale Homes: A Complete Guide for 2026/27
Discount Market Sale lets eligible buyers own a home outright at a permanent discount to its full market value, rather than buying a partial share as with shared ownership. This guide explains how the discount and resale restriction work, who is eligible, and how to get a mortgage on one.
Discount Market Sale (DMS) is a type of affordable home ownership where you buy 100% of a property outright, but at a price permanently discounted below its full open market value. It is created through planning obligations, most commonly a Section 106 agreement attached to a new development, requiring a proportion of homes to be sold at a discount to eligible local buyers.
How the Discount Works
The discount is typically expressed as a fixed percentage below full market value, and a legal restriction on the property's title requires that same percentage discount to be maintained on any future sale, so the home remains affordable to future eligible buyers rather than only benefiting the first purchaser.
Eligibility Criteria
Eligibility rules are set locally and vary by development, but commonly include a household income cap, a local connection requirement (such as living or working in the area), and sometimes priority categories such as key workers or first-time buyers. Always check the specific scheme's published criteria before assuming you qualify.
DMS vs Shared Ownership
With Discount Market Sale, you own the whole property from the outset, just at a discounted price, and there is no rent to pay on any unowned share since there is not one. With shared ownership, by contrast, you buy a partial share (commonly starting from a minority stake) and pay rent on the remaining share owned by a housing provider, with the option to staircase to full ownership over time.
Getting a Mortgage on a DMS Home
Not every mainstream lender is comfortable lending against a property with a resale value restriction, so it is worth working with a broker experienced in Discount Market Sale and other restricted affordable housing products to identify lenders who understand and accept the specific Section 106 or similar legal restriction on the property.
Stamp Duty Considerations
Because you are buying full legal ownership at a discounted price (rather than a partial share as with shared ownership), the technical treatment of Stamp Duty Land Tax for a Discount Market Sale purchase depends on the specific structure of the transaction, so always check current HMRC guidance or seek advice from a solicitor experienced with this type of purchase.
Resale Rules and Restrictions
When you come to sell, the legal restriction typically requires you to sell at the same percentage discount to another eligible buyer, meaning you do not benefit from the full increase in open market value over time. Some agreements may also restrict who can buy the property or require the local authority or developer to be notified before a sale proceeds.
Finding a Discount Market Sale Home
Discount Market Sale homes are usually created as part of new developments rather than sold on the general open market in the same way as standard homes, so check with your local authority's planning and housing departments, and with developers building in your area, to find out about current and upcoming DMS availability.
Discount Market Sale (DMS) is a form of affordable home ownership where a property is sold outright, but at a permanent discount to its full open market value, with that discount typically maintained on any future resale of the property.
How does the discount work?
The discount is usually set as a percentage below full market value, and a legal restriction (often a Section 106 planning agreement) requires the property to be resold at the same percentage discount to another eligible buyer, keeping it affordable for future purchasers rather than only the first buyer.
Who is eligible for a Discount Market Sale home?
Eligibility criteria are set locally, commonly including a household income cap, a local connection requirement, and sometimes priority for key workers or first-time buyers, so always check the specific scheme's rules for the development in question.
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How is Discount Market Sale different from shared ownership?
With Discount Market Sale you own 100% of the property outright from day one, just at a discounted price, whereas shared ownership involves buying a partial share (commonly starting from a minority stake) and paying rent on the remainder, with the option to buy further shares later.
Can I get a mortgage on a Discount Market Sale property?
Yes, though not every lender offers mortgages on restricted DMS properties, so it is worth using a broker experienced with this type of affordable housing to find lenders comfortable with the resale restriction.
Do I pay Stamp Duty on the discounted price or the full value?
Stamp Duty Land Tax calculations for restricted-value properties can depend on the specific legal structure of the discount and are technical, so always check current guidance or seek advice on the correct SDLT treatment for your specific purchase.
Can I sell a Discount Market Sale home at full market value?
Generally no — the resale restriction usually requires you to sell at the same discount percentage to another eligible buyer, meaning you do not receive the full uplift in market value on resale.
Does the discount ever expire?
In most cases the discount is designed to be permanent, remaining in place through successive sales, though the exact terms depend on the specific Section 106 agreement or scheme rules attached to that development.
Can I extend or improve a Discount Market Sale home?
This depends on the specific legal agreement attached to the property, and some restrictions may limit what changes are permitted or require consent, so check the title deeds and Section 106 agreement before planning any work.
How do I find Discount Market Sale homes for sale?
Check with your local authority's planning and housing departments, as well as developers building in your area, since DMS units are usually created through planning obligations attached to new developments rather than being available on the general open market in the same way as standard homes.
Disclaimer: Discount Market Sale terms, eligibility rules and tax treatment vary by scheme and can be legally complex; seek independent legal and financial advice before buying. This guide is general information, not financial or legal advice. Always check the current position at gov.uk or seek independent professional advice for your specific situation.
