Many UK buyers think owning a first home is difficult due to rising house prices and the challenge of saving a large deposit. The UK government introduced the First Homes scheme to help make property ownership easier for eligible buyers.
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This scheme offers to buy newly built homes at a discount of at least 30% and in some areas up to 50% off the market value. That discount remains the same on the property for future buyers.
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Are you ready to start or take the next step in this scheme? This expert guideline covers everything about the First Homes Scheme. From understanding whether you qualify, to working out what the discount actually means for your mortgage payments and financial future down the line. Â
What is the First Homes Scheme?
The First Homes scheme is a government program which helps first-time buyers purchase a home in their local area at a discount price. Compared to their market value, qualified buyers can buy new-build homes built by developers at a 30% to 50% discount. The home must be the buyer’s only or main residence.
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Property developers built the new homes as part of their planning obligations through the scheme. This scheme aims to help people in areas of high demand who do not have the ability to buy a home without the discount. The First Homes scheme is only available in England. Scotland, Wales, and Northern Ireland have their own separate schemes.
Who is Eligible for the First Homes Scheme?
The scheme is available to first-time buyers in England who are local existing residents or key workers as defined by the council, or a member of the Armed Forces.
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Key workers definition set by local Councils includes doctors, nurses, and teachers, delivery drivers, and supermarket staff. So double-check to meet the local criteria.
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The scheme is also available for current members of the Armed Forces, as well as divorced, separated or widowed spouses. Also, a veteran who left the armed forces in the last 5 years.
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A first-time buyer without a partner, you will be eligible for the First Homes scheme if you are –
- 18 years or older
- able to get a mortgage for at least half the price of the home
- not earn more than £80,000 a year before tax (£90,000 if the property is in London)
If you are a first-time buyer with others:
- must apply together, even if you’re not all getting a mortgage
- joint income cannot be more than £80,000 a year before tax (£90,000 if the property is in London)
Do I Need a Deposit for The First Homes Scheme?
Yes, the First Homes Scheme does not remove the need for a deposit, but it makes it significantly more manageable.
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You will need a mortgage and a deposit for the scheme. Most lenders will require at least 5%, and your mortgage must cover at least 50% of the property’s value. What does change is the price you are working with. Because the scheme takes at least 30% off the market value before you even begin, the number you are saving towards is already much smaller than it would be if you were buying on the open market.
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For instance, a property priced at £200,000 after the First Homes discount requires a 5% deposit of just £10,000. Without the scheme, that same home at full market value could easily require two or three times that amount just to get through the door.
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If you have a Lifetime ISA, you can use it towards the deposit on a First Homes property, provided the discounted purchase price does not exceed £450,000. This is a strong combination — the LISA adds a 25% government bonus on top of your savings, reducing how much you need to save yourself.
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In short, a deposit is still required — but between the scheme discount and the option to use a LISA, the amount you actually need to save is far lower than buying on the open market.
How Does the First Homes Scheme Work?
If you are a first-time buyer, the First Homes Scheme help you get on the property by reducing at least 30% off the market value of a new-build home. This discount is not just taken on trust. A surveyor values every property freely before the price is set, so what you see is what the home is actually worth.
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Unlike shared ownership, you own the property outright from day one. No rent, no housing association payments, just your mortgage.
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You find available homes by searching for new-build properties listed under the scheme by developers or estate agents in your area. Not every development participates, so availability will vary depending on where you are looking.
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Price caps apply too. After the discount, the home cannot exceed £250,000 — or £420,000 in London. Your local council may set a lower limit.
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Once you own it, you can decorate and improve it freely. But if you sell or let the property, the same percentage discount must be passed on to the next eligible first-time buyer — keeping the home affordable for whoever comes after you.
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How to Apply For The First Homes Scheme?
The application process is easier than most people think — and once you know the steps, the whole thing starts to feel a lot less daunting. Here is how it works.
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- Find a Property & Contact the Developer Search for new-build homes in your area listed under the First Homes scheme. Once you find one, contact the developer or estate agent and tell them you want to buy through the scheme. They handle the eligibility check and submit your application to the local council.
Pro Tip: Buying a new-build? You may need to pay a reservation fee, but if your application fails, you get it back in full.
- Appoint a Conveyancer. Your application must include a conveyancer — either a conveyancing solicitor or a licensed conveyancer. Find one through the Law Society or the Council for Licensed Conveyancers website. Contact them early to confirm availability and agree on fees before anything is submitted.
- Wait for the Council’s Decision. The local council reviews your application and confirms your eligibility. They will contact your developer, mortgage adviser, and conveyancer directly — you do not need to chase anyone yourself.
- Arrange Your Mortgage & Complete. Once approved, secure a mortgage covering at least 50% of the discounted price. If you have a Lifetime ISA or Help to Buy ISA, you can use it towards your deposit here. When your mortgage offer is confirmed and legal documents are signed, your conveyancer will request permission from the council to exchange contracts.
How TAJ Accountants Will Help You to Get The First Homes Scheme
Your first home is probably the biggest purchase you will ever make. The last thing you want is to get the financial side wrong. That is exactly where TAJ Accountants come in — we make sure everything is in order before you commit to anything.
- Eligibility Assessment:
Before you commit to anything, we assess your income, savings, and financial position to confirm whether the First Homes Scheme is the right option for you.
- Mortgage-Ready Finances:
Lenders want clean, well-organised financial records. Whether you are employed, self-employed, or a sole trader, we make sure your accounts and tax records accurately reflect your income.
- Lifetime ISA & Help to Buy ISA Advice:
If you have a LISA or Help to Buy ISA, we help you use it towards your deposit correctly so you do not miss out on the government bonus or trigger an unnecessary withdrawal penalty.
- Stamp Duty & Tax Guidance:
First-time buyers may be eligible for Stamp Duty Land Tax relief. We make sure you are claiming everything you are entitled to with no tax surprises after you complete.
- Year-Round Support:
Our team is available throughout the entire process — not just at the point of completion — so you always have a qualified professional to turn to when questions come up.
The First Homes Scheme has more moving parts than most people expect — and one missed step can delay your application or cost you money you did not need to spend. TAJ Accountants is a small business accountants’ firm that helps first-time buyers across London get it right from the start. Book a free consultation before you commit to anything.
Conclusion
The First Homes Scheme is one of the most practical routes onto the property market available to first-time buyers in England right now. A minimum 30% discount off market value, no rent, and full ownership from day one — for those who qualify, it is a genuine opportunity worth taking seriously.
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But like any government scheme, the details matter. Your eligibility, your deposit, your mortgage, your conveyancer, your ISA — each piece needs to be in the right place at the right time. Getting any one of them wrong can slow the process down or cost you more than it should.
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If you are a first-time buyer in London considering the First Homes Scheme, do not go through it alone. TAJ Accountants works with buyers across London to make sure the financial side is handled correctly — from eligibility check to completion. Contact us and buy your first home with peace of mind.
