Published 2026-07-19 · New Build Mortgage Guide · Written and reviewed by Phillip Wakeling-Smith (CeMAP)

The First Homes scheme: 30–50% off a new build — with strings attached forever

Quick answer: First Homes sells selected new-build homes to eligible first-time buyers at a 30–50% discount to market value — and the same percentage discount binds every future sale of the property, forever, via the title deeds. Eligibility: first-time buyer, household income under £80,000 (£90,000 in London), buying with a mortgage of at least 50% of the discounted price, and after the discount the home must cost no more than £250,000 (£420,000 in London). Councils can add local rules — a local connection, key-worker priority, lower income caps — so the practical answer always lives in the local policy, not the national headline.

How the discount actually works

The developer sells at (say) 30% below the home's assessed market value. You pay stamp duty on the discounted price, your deposit and mortgage are based on the discounted price, and the discount percentage is written into a restriction on the title. When you sell, you must sell to another eligible first-time buyer at the same percentage below the then-current market value.

That last part is the piece to sit with: you get 100% of the growth on the discounted value, not the full value — and your future buyer pool is restricted to scheme-eligible purchasers. It's a genuine discount, not a loan (nothing to repay, unlike Help to Buy — see our Help to Buy repayment context), but it's also a permanent constraint on the asset.

The mortgage mechanics

• The 50% rule: you must take a mortgage (or home-purchase plan) for at least half the discounted price — the scheme can't be used by cash buyers parking money.
• Lender pool: a decent set of mainstream lenders supports First Homes, but not all — and the valuation/discount paperwork (an Open Market Value assessment plus the s106 restriction) is exactly the kind of non-standard step where a lender's new-build team matters. Check your lender fit before reserving, the same way you would for builder incentives.
• Deposit: typically 5% of the discounted price — on a £300,000 home discounted 30% to £210,000, that's £10,500. Combined with the discount, this is the cheapest entry point to a new build that exists right now where you can get it.
• Affordability: assessed on the discounted price. Run your numbers with the affordability check.

The catches

• Supply is thin and local. First Homes units come through developers' planning obligations on specific sites — there's no national portal or guaranteed availability; you find them development by development.
• Local rules rule. Councils can require a local connection or key-worker status and can set lower price/income caps. The national criteria are the floor; the local policy decides your case.
• Resale restrictions cut both ways. The discount that got you in caps your exit: eligible-buyer-only resale at the fixed percentage discount, with local rules applying to your buyer too. If you outgrow the home in three years, your resale market is narrower than the open market.
• New-build risks don't disappear. The discount doesn't insulate you from down-valuations, 28-day exchange pressure or offer-expiry timelines — the purchase process is a normal new-build purchase with extra paperwork.

First Homes vs the alternatives

• vs 95% open-market purchase: First Homes wins on price and deposit where you can find and qualify for a unit; loses on choice, resale freedom and upside.
• vs shared ownership: First Homes gives outright ownership with no rent — usually the better deal if your income supports the (discounted) full mortgage and a unit exists where you want to live. Shared ownership needs less income and exists in far greater supply.
• vs waiting: the discount is real money — but only on the specific homes that carry it.

FAQ

Is the First Homes discount repayable like Help to Buy was?

No. It's a price discount, not an equity loan — there's nothing to repay. The trade-off is the permanent resale restriction written into the title deeds instead.

Who qualifies for First Homes?

First-time buyers with household income under £80,000 (£90,000 London), using a mortgage of at least 50% of the discounted price, where the discounted price doesn't exceed £250,000 (£420,000 London). Councils may add local-connection or key-worker requirements and can tighten the caps.

Do I pay stamp duty on the full value or the discounted price?

The discounted price — and as a first-time buyer, first-time-buyer relief applies on top, which takes many First Homes purchases out of stamp duty entirely.

Can I sell a First Homes property on the open market later?

Not at full market value — you must sell at the same percentage discount to another eligible first-time buyer, with the local eligibility rules applying to them. In limited circumstances where no eligible buyer can be found, the restrictions have fallback provisions — but plan on the discounted, restricted resale as the normal case.

Will my lender accept a First Homes purchase?

Many mainstream lenders do, but not all — and the discount paperwork adds a step to underwriting and valuation. Confirm the lender supports the scheme before you reserve, not at application.