First Homes: 30-50% off a first home in England

First Homes is a government scheme to buy a home in England below market price. A developer must sell such homes to first-time buyers at a discount that is then fixed to the property. The scheme runs in England only.

How big is the discount?

A First Home is sold at a discount of at least 30% of market value. A council or neighbourhood planning group can raise it to 40% or 50% if it shows need, but the level is set at one of those three figures.

Is there a price cap?

Yes. After the discount, the price of a first sale cannot exceed £250,000, or £420,000 in Greater London. Local areas can set a lower cap but not a higher one. The cap applies only to the first sale.

Who can buy?

• the buyer is a first-time buyer (as defined in the Finance Act 2003) and aged 18 or over;
• combined household income is no more than £80,000, or £90,000 in London, based on the previous tax year;
• you must get a mortgage for at least half the price;
• the home must be your only or main residence.

A council may give priority to local residents, lower incomes or key workers, but only for the first 3 months a property is on sale. For joint purchases, all buyers must be first-time buyers.

How do you find one and resell it?

First Homes are sold by developers on new schemes and by estate agents; some new-build sites must include them as a condition of planning permission. Councils publish details in their plans and on their websites. On resale you can only sell at the same percentage discount off the current market value, set by an independent valuation, and the buyer must again meet the scheme's rules; the council enforces this.

First Homes sits among the government's affordable home ownership schemes alongside shared ownership, where you buy a share of a home and pay rent on the rest. Which suits you depends on income, deposit and local prices.

Why does it help future buyers too?

The discount is secured "in perpetuity": a title restriction passes it to each later buyer. On resale the same percentage discount applies to the home's market value at that time, which is independently valued. So affordability stays with the home rather than disappearing after the first sale. For the buyer that means a lower price and a smaller deposit; for the area it means affordable homes stay affordable for the next families rather than returning to the open market at full price.