First Homes Scheme Explained: Who Is Eligible and How to Apply
Struggling to get on the property ladder in the UK? The First Homes Scheme could be your answer in 2026, offering discounted homes to local first-time buyers and key workers. Discover who qualifies, how to apply, and the essential steps to make your homeownership dream a reality with this government initiative. This program is designed to help those who may find it challenging to afford their first home, ensuring that more people can secure a place to live in their desired communities.
For many first-time buyers in England, saving a large deposit and meeting mortgage affordability checks are major barriers. The First Homes scheme is a government-backed initiative intended to reduce these obstacles by offering certain new properties at a permanent discount. Understanding how the rules work, who is eligible, and how to apply can help you decide whether this route could be suitable for your situation.
What is the First Homes Scheme?
The First Homes scheme offers specific new-build or newly converted homes to qualifying first-time buyers at a discount of at least 30 percent from the full market value. In some local authority areas, the discount can be higher, up to 50 percent, if this is considered necessary to reflect local prices and incomes. The discount is locked to the property in perpetuity, which means it must also be sold on with the same percentage reduction to the next eligible buyer. At the time of writing, capped post-discount price limits generally apply: up to 250,000 pounds across most of England and up to 420,000 pounds in London, although councils can set lower caps locally.
Who qualifies for discounted homes?
To use the First Homes scheme, you must be a first-time buyer purchasing your only home. This usually means you have never owned a residential property in the UK or abroad, including through inheritance or shared ownership. There are income caps: in most of England, your combined household income must not exceed 80,000 pounds per year, or 90,000 pounds in London. Local authorities can apply extra criteria, such as living or working in the area or being a key worker, particularly during the initial marketing period. You also normally need a mortgage covering at least half of the discounted price, and you must intend to live in the property rather than rent it out.
How to apply for a First Home in 2026
Although detailed processes may vary by council and could be refined by 2026, the broad steps are likely to stay similar. You typically begin by checking which developments in your area include First Homes plots, either through local authority information or directly with house builders. Once you have identified a suitable property, you generally submit an eligibility application, often via the developer, including evidence of income, deposit funds, and first-time buyer status. The local authority then reviews your documents against its criteria and confirms whether you can reserve a First Home. Because policy can evolve, it is sensible to check the latest guidance from your council and the UK government before applying in or for 2026.
Key steps in the buying process
The purchase process usually runs in parallel with your application. Subject to eligibility approval, you would reserve the property with the developer and apply for a mortgage based on the discounted price, not the full market value. A solicitor or conveyancer then carries out legal checks, including confirming that the First Homes discount and resale rules are correctly recorded in the property title. You will receive key documents such as a reservation form, memorandum of sale, and contract pack. Your conveyancer should explain how the discount binds future resales and any restrictions, such as limits on letting the property. Once your mortgage offer is issued and legal work is complete, you exchange contracts and later complete the purchase, at which point you receive the keys.
Tips for maximising your success
Preparing thoroughly can increase your chances of securing a First Home and help you understand the financial impact of the discount. Start by building a realistic budget that reflects local market values, then work out what a 30 percent or higher reduction could mean in practice. Compare this with alternative routes, such as shared ownership or buying on the open market, to see which arrangement suits your income, deposit, and long-term plans. Speaking with a qualified mortgage adviser or independent financial adviser can help you understand how lenders view First Homes and how your repayments might differ under each option.
| Product or scheme | Provider or route | Cost estimation or impact |
|---|---|---|
| First Homes scheme | Eligible developments and local authorities | At least 30 percent off market value; post-discount price usually capped at 250,000 pounds (420,000 pounds in London) where standard caps apply |
| Shared ownership | Housing associations and registered providers | Buy an initial share (often 10 to 75 percent) and pay rent on the remaining share; combined costs vary by property and share size |
| Standard market purchase | Open market via estate agents or developers | Pay full market value; costs depend entirely on local prices and lender requirements |
| Lifetime ISA bonus support | Banks and building societies offering LISAs | Government adds 25 percent bonus on eligible savings up to 4,000 pounds per tax year, which can go toward a first home deposit |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
In summary, the First Homes scheme is intended to make certain new-build properties more attainable for first-time buyers who meet income, mortgage, and local eligibility tests. By understanding how the discount is applied, what documentation you need, and how the purchase process works, you can judge whether this option aligns with your finances and long-term housing plans, and monitor any policy updates that may apply by 2026.
