First Homes Scheme Explained: Who Is Eligible and How to Apply
Struggling to get on the UK property ladder as house prices soar in 2026? The government’s First Homes Scheme offers eligible first-time buyers in England a 30-50% discount on new-build homes in their local area. This scheme aims to boost home ownership and provide affordable options for new buyers. Discover the eligibility criteria, the application process, and tips for navigating this game-changing opportunity in the housing market.
Rising deposits, strict affordability checks, and limited housing supply can make the first step onto the property ladder difficult. The First Homes Scheme aims to reduce the upfront purchase price for eligible buyers by offering a discount on certain new-build properties. To use it well, you need to understand how the discount is applied, what lenders look for, and how local rules can affect your application.
What is the First Homes Scheme?
The First Homes Scheme is a home-ownership initiative in England that offers a discount on selected new-build homes for eligible buyers. The discount is intended to be substantial (often described as at least 30%), and it is designed to stay with the property when it is sold again, meaning future eligible buyers should benefit too. Importantly, it only applies to homes sold through the scheme and only where the developer and local authority have brought First Homes forward.
Who qualifies for the discount?
Eligibility is centred on being a first-time buyer, but the detail can vary by location because local authorities can apply local connection or priority rules. In broad terms, buyers typically need to meet criteria linked to income and affordability and must intend to live in the home as their only or main residence. Some areas may prioritise key workers, people with a local connection, or other locally defined groups, so two applicants with similar finances could face different rules depending on where they buy.
How to apply in 2026
The process usually starts with confirming that a property is being sold as a First Home and that you meet both national and local eligibility criteria. You would then obtain evidence of eligibility (often via the developer and/or the local authority’s process) and line up a mortgage decision in principle based on the discounted purchase price. In 2026, the core steps are expected to remain familiar: check scheme availability on the development, confirm local requirements early, and make sure your solicitor understands any resale restrictions and the mechanics of the discount.
Pros and cons for first-time buyers
A clear advantage is that a lower purchase price can reduce the size of deposit needed and may improve mortgage affordability calculations. That can be particularly helpful in higher-cost areas where saving a deposit is the biggest barrier. However, there are trade-offs: choice may be limited because only certain new builds are offered, local eligibility rules can be strict, and resale conditions may reduce flexibility compared with a standard purchase. You should also consider new-build pricing dynamics, service charges (where relevant), and how long you expect to stay.
Real-world cost matters because the discount affects the purchase price, but it does not remove other buying costs such as legal fees, mortgage fees, surveys, moving costs, or ongoing charges. It can help to compare the First Homes route with other widely used UK home-buying options and products, noting that eligibility and fees differ by provider and can change. The table below offers a practical snapshot to frame questions for developers, lenders, and solicitors.
| Product/Service | Provider | Cost Estimation |
|---|---|---|
| First Homes (discounted new-build purchase) | Participating developers / local authorities (England) | Discount commonly described as 30% to 50% off market value; buyer funds deposit and mortgage on discounted price; normal purchase costs still apply (legal fees, surveys, lender fees). |
| Shared Ownership (part-buy, part-rent) | Housing associations (e.g., L&Q, Clarion, Peabody) | Buy a share (often 10% to 75%) with deposit and mortgage; pay rent on the remaining share plus service charges where applicable; staircasing fees may apply. |
| Lifetime ISA (LISA) for first-home savings | Providers such as Moneybox, Skipton Building Society, AJ Bell | Government bonus of 25% on contributions (within rules); provider charges vary (some use platform fees or fund charges); withdrawal penalties can apply if used outside the rules. |
| Standard residential mortgage | Major UK lenders (e.g., Nationwide, Halifax, Barclays) | Rates vary by term, LTV and credit profile; arrangement/product fees are commonly seen in the market and may be £0 or a fixed fee; valuation fees may apply depending on deal. |
| Conveyancing (legal work for purchase) | UK conveyancing solicitors / licensed conveyancers | Often priced as a fixed fee plus disbursements; total cost varies by complexity, property price, and whether the lender has extra requirements. |
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.
Tips for navigating the housing market
Start by separating “scheme eligibility” from “mortgage affordability”: meeting one does not guarantee the other. Build a realistic budget that includes not only deposit and monthly repayments, but also one-off costs and any ongoing charges such as service charges on some new-build estates. If you are comparing areas, check how local connection or priority rules might affect you before paying reservation fees or spending money on surveys.
It also helps to pressure-test the long-term fit. Consider commuting, local amenities, and the likelihood of staying for at least five years, because buying and selling costs can be significant. Ask direct questions about resale restrictions and who can buy the home from you later. Finally, keep documentation organised (payslips, bank statements, proof of deposit, ID), as delays in underwriting or legal checks are common in new-build transactions.
The First Homes Scheme can lower the entry price for some first-time buyers in England, but it works within a wider system of local rules, lender checks, and the realities of new-build supply. A clear understanding of eligibility, the steps to apply, and the full cost picture makes it easier to judge whether a discounted First Home is the right match for your finances and your plans.
