First Homes are homes in England sold to first-time buyers for at least 30% less than their market value, with no rent to pay on the rest (unlike shared ownership). The discount stays with the home: when you sell, the next buyer gets the same percentage off. The scheme is only available in England.
Who can buy one
First Homes are sold in England at 30% to 50% below market value to first-time buyers aged 18 or over earning up to £80,000 a year (£90,000 in London) who can get a mortgage for at least half the price; councils can add local criteria for the first 3 months a home is on sale.- You're 18 or older.
- You're a first-time buyer, and so is everyone you buy with.
- You can get a mortgage for at least 50% of the price.
- Your household income last tax year was no more than £80,000 before tax (£90,000 in London), for all buyers together.
- The home will be your only or main residence.
- Councils can set local criteria (key workers, local residents, lower incomes) for the first 3 months a home is on sale; armed forces members and their families are exempt from local connection rules.
If you’re buying with others, you all have to be first-time buyers and apply together, and your combined income last tax year counts towards the limit. You all have to meet any local income criteria, but only one of you needs to meet other local criteria.
Prices and discounts
The discount is between 30% and 50% of the market value, worked out from an independent surveyor’s valuation. A new-build First Home can’t cost more than £250,000 after the discount (£420,000 in London), and the council can set a lower cap.
For example, a home valued at £300,000 with a 30% discount costs £210,000. You need a mortgage for at least half of that, and a 5% deposit on it would be £10,500. Stamp duty is worked out on the discounted price you pay.
How to apply
- Find a First Home advertised by a developer, or by an estate agent if it’s a resale, and tell them you want to buy through the scheme.
- They check you’re eligible and send your application to the local council, with your conveyancer’s details. You may pay a reservation fee on a new build, refunded if your application fails.
- The council checks your application and, if you qualify, issues a certificate that you can be a First Homes owner.
- You arrange a mortgage for at least half the price, exchange contracts (paying your deposit) and complete.
Developers can offer incentives such as cash back or free goods, worth no more than 5% of the discounted price.
Living in, letting and leaving it
Once you’ve bought, you don’t have to keep meeting the eligibility rules: a pay rise doesn’t mean you have to sell. You can let the whole home for no more than 2 years in total while you own it, after telling the council and checking with your lender. The council can agree to longer in some situations, such as a job move, a relationship ending, redundancy, caring for someone or escaping domestic abuse. You can rent out a room for as long as you like while you live there. You can leave the home in your will; whoever inherits has to follow the same rules on living there and letting.
Selling
You sell to someone who’s eligible for First Homes, at the same percentage discount you got, based on the home’s value when you sell. With a 30% discount and a valuation of £200,000, for example, the most you can sell for is £140,000. Local criteria stop applying to buyers once the home has been on the market for more than 3 months.
If you’ve tried to sell it as a First Home for 6 months or more, or selling that way would cause you severe difficulties (such as bankruptcy), you can ask the council to let you sell at full market price. The council can agree, or offer to buy the home at the discounted price.
Related guides
- First-time buyers guide: costs, deposits, schemes and stamp duty relief in one place
- Help to Buy alternatives: the schemes that help first-time buyers now, compared
- Shared ownership explained: buying a share, paying rent on the rest and staircasing
- How to save for a house deposit: where to keep a deposit and how long saving takes
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