How First Homes works in practice
A housing developer building a new estate in England is now required, under most planning permissions granted from 2021 onwards, to sell a portion of the new homes as "First Homes" — discounted to at least 30% below market value. Local councils can push the discount to 40% or 50% if local house prices justify it. The developer sells the home to the first eligible FTB at the discounted price. That's the entire transaction — no equity loan, no rent, no future clawback of the discount to the government.
Example transaction
A 2-bed apartment in a Bristol new-build valued at £280,000 open-market. First Homes discount at 30% = £84,000. Sold to eligible FTB at £196,000. Buyer needs 5% deposit (£9,800), takes a 95% LTV mortgage of £186,200. Stamp duty: £0 (below FTB threshold).
What happens when the buyer eventually sells?
The covenant on the property (registered on the title) requires the next sale to also be at 30% below the future open-market value, to another eligible FTB. So if that Bristol flat rises to £340,000 in 10 years, the current owner can only sell it for £238,000 to a First Homes-eligible buyer. That's fine — you're not stripped of price growth, you just don't get to sell into the full open market.
Who counts as eligible?
- Aged 18 or over.
- First-time buyer (in the strict SDLT sense — never owned any residential property, anywhere).
- Household income (all buyers combined) below £80,000 (£90,000 Greater London).
- Buying as your primary residence.
- Using a mortgage covering at least 50% of the discounted price.
Local councils can add priority (not additional exclusion) for:
- Keyworkers: NHS, teachers, police, fire, prison officers, MoD civilians, social care workers.
- Armed forces: Serving personnel; recently discharged; bereaved spouses.
- Local connection: Lived in the local authority area for 2+ years, or work locally, or immediate family living locally.
Mortgages for First Homes purchases
A shortlist of UK lenders operate specifically on the First Homes panel:
- Halifax
- Nationwide
- Barclays
- NatWest
- Leeds Building Society
- Newcastle Building Society
- Skipton Building Society
Not every lender operates in every region — Leeds and Newcastle BS tend to focus on northern developments; Nationwide and Halifax cover UK-wide. Rates track standard 95% LTV pricing (typically 5.10%–5.65% on a 5-year fix in 2026); there is no First Homes rate premium.
Deposit maths
Because the property is discounted, the cash deposit needed is smaller than for an open-market purchase of the same home.
| Market value | 30% discount price | 5% deposit | 10% deposit |
|---|---|---|---|
| £180,000 | £126,000 | £6,300 | £12,600 |
| £220,000 | £154,000 | £7,700 | £15,400 |
| £280,000 | £196,000 | £9,800 | £19,600 |
| £340,000 | £238,000 | £11,900 | £23,800 |
| £420,000 | £294,000 | £14,700 | £29,400 |
Applying for a First Homes property
- Find eligible developments: Contact your local council, or check Rightmove/Zoopla using the "First Homes" filter. Not every area has active First Homes stock.
- Register interest with the developer. They'll assess your eligibility against the local S106 planning agreement.
- Complete a First Homes eligibility questionnaire. The local authority (or their appointed agent) verifies your FTB status, income, and any priority criteria.
- Receive an Authority to Proceed (ATP). This is your green light to reserve the property.
- Reserve the property and apply for a mortgage. Reservation fees typically £500–£1,000, refundable if you can't complete for reasons outside your control.
- Conveyancing and completion. Standard from here — with the added S106 covenant registered against your title.
Selling a First Homes property later
When you decide to sell, the process differs from a normal sale:
- The property must be sold at the same percentage discount (30%, 40% or 50%) to a First Homes-eligible buyer.
- The local authority is given first refusal for a set period (typically 8 weeks) to nominate an eligible buyer from their list.
- After that period expires without a nomination, you can market to any eligible buyer through an estate agent.
- If after a further period (typically 6 months) no eligible buyer has been found, the discount can be released and the property sold on the open market at full market value.
Pros
- Massive up-front price advantage — 30%–50% below market.
- Smaller deposit in cash terms for the same physical property.
- Stamp duty typically £0 due to discounted price falling below FTB threshold.
- New-build warranty (NHBC or equivalent) for 10 years.
- Priority for keyworkers and forces personnel.
Cons
- You benefit from house price growth but can't sell into the open market at full value.
- Availability is patchy — some counties have plentiful stock, others have almost none.
- Reservation processes can be slow (council eligibility checks add weeks).
- New-build market values sometimes debated — check comparable resale prices.
- Cannot let the property (must be primary residence).
First Homes vs Shared Ownership vs Help to Buy Wales
| Feature | First Homes | Shared Ownership | HTB Wales |
|---|---|---|---|
| Discount / support | 30%–50% off | Buy 25%–75% share | 20% equity loan |
| Ongoing costs beyond mortgage | None | Rent on unowned share + service charge | None (interest-free 5y then interest applies) |
| Discount / support retained on sale | Yes (perpetual) | Yes (until staircased to 100%) | No — repaid on sale |
| Available in | England | England mainly | Wales only |
Frequently asked questions
Related guides
All First-Time Buyer Schemes
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