The First Homes scheme is a homebuyer
initiative announced by the government in 2021 and it has been created to help
first-time buyers struggling to afford to buy on the open market get on the
property ladder with a brand-new home in England at a discounted
Here, we explain what you need to
know about First Homes.
What homes are available through First Homes?
Housebuilders and developers will be
signing up and working with local councils to offer the First Homes scheme at
sites across England. First Homes is right now available on selected new build
homes but will also be available when you buy from someone else a home which
was originally purchased through the scheme.
Housebuilders offer the First Homes
option to first-time buyers on selected properties with 30% to 50% of the
market value taken off the price. So, a home for sale with a full price of
£200,000 might be available for £140,000 when a 30% discount is applied. You’ll
need a deposit of at least 5% of the discounted price.
There’s a price cap of £420,000 in
London, or £250,000 anywhere else in England, after the discount has been
applied. A local council may set a lower price threshold. The scheme’s rules
mean that every home that’s sold must be valued by an independent surveyor
to ensure the discount is based on actual market value.
Am I eligible for First Homes?
The scheme is aimed at first-time
buyers and with a household income not exceeding £80,000 (£90,000 in
The exact qualifying criteria are set
by each council, but priority may be given to:
essential workers, for example NHS workers, teachers, delivery drivers and supermarket staff
people who already live in the area
people on lower incomes
You’re exempt from local authorities’
conditions about being an essential worker or living in the area if you
a member of the Armed Forces
a veteran who left the Armed Forces in the last five years
a divorced or separated spouse or civil partner of a member of the Armed Forces
a widow or widower of a deceased member of the Armed Forces (if their death was caused wholly or partly by their service)
If you are one of the above, you will
still need to meet other eligibility conditions.
With First Homes, will I have to pay Stamp Duty Land Tax?
The amount of Stamp Duty Land Tax
(SDLT) you pay is based on how much you paid for the home after the discount
If your discounted property costs
under £300,000, as a first-time buyer you won’t have to pay any SDLT at all. If
it is priced between £300,000 and £420,000, you won't have to pay SDLT on the
first £300,000 and you’ll pay SDLT of 5% on the price above that – so if it is
priced at the maximum £420,000, you’ll have to pay £6,000.
When can I apply for First Homes?
Firstly, ensure that the housebuilder
is offering First Homes on the development where you want to buy. There’s no
application deadline and the scheme is open to eligible applicants whenever
there are plots available. You can formally apply for First Homes when you are
ready to reserve a plot under the scheme.
How do I apply for First Homes?
It’s best to start by talking to a
mortgage advisor and ensure that you qualify for a relevant loan. You’ll
need to use a mortgage or home purchase plan for at least 50% of the purchase
price of the home.
Contact the developer (or estate agent
if you’re buying from a previous First Homes buyer) and tell them you want to
buy a First Home. They can help you to complete the application, then send it
to the local council. If you’re buying a brand-new home, the housebuilder will
charge a fee for applying which is fully refundable if your application is
The local council will check your
application to make sure you’re eligible and contact you, your mortgage advisor
and housebuilder with their decision.
If your application was missing any
information, they may ask you to provide it before making their decision.
What happens if I am approved for First Homes?
You can now formally apply for your
mortgage. You should also hire a conveyancer/solicitor to help you through
the property purchase procedures, following any local council instructions and
filling in all the necessary forms.
After you’ve got a mortgage offer and
agreed a contract with the developer, your conveyancer will ask the local
council if you can exchange contracts. The council will check to make sure the
conveyancer’s request meets all the necessary terms and conditions, and tell
you when they’ve decided.
How do I find a conveyancer?
This can be either a conveyancing
solicitor or a licensed conveyancer and you can find them on the Law Society
website (www.lawsociety.org.uk) or on the Council for Licensed Conveyancers
website (www.clc-uk.org) respectively.
How long will the First Homes buying process take?
Processing the application, and the
length of time it takes to complete the purchase, may vary based on the
Exchanging contracts and completion
You need to pay your deposit at the same
time as you exchange contracts with the developer and at that point you are
legally committed to buying the home. When you’ve exchanged contracts, the
developer will set a completion date, when the home will be ready for you to
On the completion date, your
conveyancer transfers the money from your mortgage to the housebuilder, who can
then give you the keys to your brand-new home.
Can I let my First Homes property?
While it should be your only home
(not a holiday home or investment property, for example), in general you can
let the whole property out to tenants for a total of up to two years
during the time you own it. You’ll need to tell your local council and ensure
that your mortgage agreement allows you to do this.
However, if your council and mortgage
lender approve, you may be able to let out your First Homes property for more
than two years if:
- you’ve been made redundant
- your job location changes
- your marriage or long-term relationship ends
- you’re moving in order to leave a situation that involves
- you’re a carer for a relative or friend
You can rent out a room to someone
for as long as you want if you live in that home while they’re renting, and the
home remains the only one you own.
What happens if my circumstances change after I’ve purchased through
If there’s a change in your
circumstances after buying a home through the First Homes scheme – for example
if you stop being a key worker, or your household income goes about the
qualifying threshold, you won’t have to sell your home.
What happens when I want to sell my home?
When you come to sell the
property, you must do so to someone who is eligible to buy a First Home. You
must give them the same percentage discount that you got, based on the home’s
market value at the time of sale. To ensure a reasonable sale price, the
property will need to be valued by a surveyor who’s registered with the Royal
Institution of Chartered Surveyors (RICS).
Can I leave my First Homes property in my will?
You can leave your property
to someone in your will but they will then have to sell it if they don’t
qualify for the First Homes rules.