- Uswitch.com>
- First Homes Scheme 2025 | What is it and how does it work?
First Homes scheme guide: What is it and how does it work?
If you’re a first-time buyer looking for a new home, the First Homes Scheme could help you to get a discount of between 30% and 50% on the price of a new build property. We explain more about the scheme and how it works.
First Homes Scheme summary
Eligible first-time buyers may be able to buy a new build home or a home previously sold through the scheme at a discount of between 30% to 50% off the market price.
The discount remains with the property for all future sales, so it remains affordable for subsequent first-time buyers.
Applicants must meet a range of eligibility requirements. For example, you must be a first-time buyer with a household income not exceeding £80,000 (£90,000 in London).
Buyers using the First Homes scheme will own 100% of their property from day one so, unlike the shared ownership scheme, there’s no additional rent payments to worry about
What is the First Homes scheme?
The First Homes scheme is a government initiative designed to help first-time buyers in England purchase a home at a discount.
This scheme offers new build homes to eligible purchasers for 30% to 50% less than their market value, with the aim of making homeownership more accessible.
As you’ll be buying a home for less than its market value, you’ll need a smaller deposit and mortgage amount which can make buying a home more affordable.
How does the First Homes scheme work?
Find a property. Developers will advertise if properties are available through the First Homes scheme, so do your research to find new build developments in your desired local area. Or, alternatively, check with estate agents for homes being resold by previous participants of the scheme.
Check your eligibility. Once you find a property, your developer or estate agent will check to see if you meet the national and local criteria for the scheme.
Speak to a mortgage broker. You’ll need to make sure you’re able to secure a mortgage for at least 50% of the discounted price of the home, so it’s a good idea to get a mortgage in principle from a mortgage broker.
Reserve your home. When buying a new build home, you’ll typically need to reserve your chosen property by paying a reservation fee. While it won’t be refundable if the sale falls through, you will usually get your reservation fee back if you’re found not to be eligible for the First Homes scheme.
Apply for the scheme. Your chosen developer will submit your application form to the local council on your behalf. They will then check your application and, if successful, will issue a certificate that shows you can be a First Homes owner.
Continue the home buying journey. With your official approval to take part in the First Homes scheme, you can now make your formal mortgage application and instruct your conveyancer to handle the relevant legal work.
Move in! Once your mortgage offer is in place and the legal work completed, you will exchange contracts and pay your deposit. At this point, you are legally committed to the purchase, and a completion date for moving in will be set.
Get expert mortgage advice
Looking to buy your first home? Our broker partner, Mojo Mortgages, can help to compare mortgage deals from a range of suitable lenders to find the right option for you.
Am I eligible for the First Homes scheme?
To be eligible for the First Homes scheme, you must:
Be buying a home in England (the scheme is not available to buyers in Wales, Scotland or Northern Ireland)
Be a first-time buyer (if you’re buying a home with someone else, all parties must be first-time buyers to be eligible)
Be aged 18 years or over
Plan to live in the house you buy (the property must be your only or main residence, so cannot be used as a buy-to-let or second home)
Be able to get a mortgage for at least half of the price of the discounted property value
Have a household income of no more than £80,000 (£90,000 in London)
Not be buying a property that costs more than £250,000 (or £420,000 in London) after the discount has been applied
Some local councils have their own, additional eligibility criteria for the scheme. For example, they may only offer the scheme to key workers, those who have local connections to the area or those on lower incomes. Members of the armed forces and their families may be exempt from local eligibility criteria.
How to get a First Homes mortgage
You’ll need to make sure you apply for a mortgage with a lender who supports the First Homes scheme. Not all lenders are willing to consider applications from those using the scheme, so it may well be worth speaking to a broker to assess your options.
A qualified mortgage broker will scour the market to make sure you’re applying for a suitable mortgage product from a lender that accepts applicants on the First Homes scheme. Their in-depth knowledge of lender criteria ensures they’ll only recommend applying with lenders if you meet their eligibility requirements - saving you time and hassle.
Lenders that take part in the First Homes scheme include:
Nationwide
Halifax
Leeds Building Society
Darlington Building Society
Newbury Building Society
Newcastle Building Society
Loughborough Building Society
Chorley Building Society
Skipton Building Society
Mansfield Building Society
*Correct at the time of writing. Please note that this list is not exhaustive and individual lender criteria can change at any time.
Can I sell my home if I bought it using the First Homes scheme?
You will be able to sell the home you bought using the First Homes scheme. However, the property must be sold to another eligible first-time buyer with the same percentage discount applied to the current market value.
For example...
You bought your first home through the scheme when its full market value was £200,000. You received a 30% discount, so you paid £140,000.
A few years later, you decide to sell. The property's value has gone up to a new market value of £250,000. The rule of the First Homes scheme is that you must pass on the same 30% discount to the next eligible first-time buyer. So you must calculate 30% of the new £250,000 value (which is £75,000) and take that off the price.
Therefore, you would be able to sell your home for £175,000 to an eligible buyer.
You still benefit from the property's increase in value, and the home remains affordable for the next person.
The First Homes scheme is often used to help people to buy a home in their local community, where they might otherwise be priced out. A qualified mortgage broker will be able to recommend suitable mortgage options for those wishing to take advantage of the scheme.”Laura Hamilton, Mortgage Expert
Other schemes to help first-time buyers
If the First Homes scheme isn't right for you, there are other initiatives available to support first-time buyers.
Deposit Unlock. Developed by the Home Builders Federation, the Deposit Unlock scheme helps you buy a new build home with a 5% deposit.
Mortgage Guarantee Scheme. A government scheme that provides lenders with a guarantee for providing 91%-95% loan-to-value mortgages, increasing access to homeownership for buyers with smaller deposits.
Shared ownership. Allows you to buy a percentage of a home and pay rent on the remainder, usually with the goal to gradually increase ownership over time when you can afford to.
Help to Buy (Wales). An equity loan scheme that allows first-time buyers in Wales to buy a new build property with a deposit of just 5%.
LIFT Scheme (Scotland). Shared equity schemes that allow you to borrow an equity loan from the government so you won’t need to find as large a deposit.
Rent to Buy scheme (England). Allows tenants to pay reduced rent, helping to make it more affordable to save for a deposit to purchase the property in the future.
Right to Buy/Right to Acquire scheme (England). Provides council tenants the opportunity to buy their rented home at a discounted rate.
Lifetime ISA. Eligible savers will be able to pay up to £4,000 into their Lifetime ISA each year and receive a 25% bonus from the government.
Other mortgage options available to first-time buyers
Low deposit mortgages. Some lenders allow you to borrow up to 95% of the property value when taking out a mortgage.
Guarantor mortgages. Allows a family member or loved one to help you buy a home by using their own home or savings as security.
Joint Borrower Sole Proprietor mortgages. Allows you to add another person (or people) to your mortgage, which can help you to boost your borrowing power.
Get expert advice on your mortgage options
Our broker partner, Mojo Mortgages, can compare mortgage deals from across a range of lenders that accept those wishing to use the First Homes scheme.
First Homes scheme FAQs
Can I use the First Homes scheme with other government schemes?
It depends. You cannot combine the First Homes scheme with other government home ownership schemes like the shared ownership scheme. However, you are able to use a Lifetime ISA to contribute towards your deposit and you may be able to take advantage of the Mortgage Guarantee Scheme depending on which lender you choose.
What happens if I can't find a qualifying buyer when I want to sell?
If you are unable to find an eligible first-time buyer to purchase your home with the required discount within a set period (usually six months), you may be able to sell the property on the open market. However, you will still be required to pay back the value of the original discount to the local council from the sale proceeds.
What deposit will I need for the First Homes scheme?
You’ll need to meet your chosen lender’s minimum deposit requirements. Lenders typically require you to put down at least 5% of the property’s value, though always check your specific lender’s criteria.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
Uswitch makes introductions to Mojo Mortgages to provide mortgage solutions.
Uswitch and Mojo Mortgages are part of the same group of companies. Uswitch Limited is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 312850. You can check this on the Financial Services Register by visiting the FCA website.
Uswitch Limited is registered in England and Wales (Company No 03612689) The Cooperage, 5 Copper Row, London SE1 2LH.
Mojo Mortgages is a trading style of Life's Great Limited which is registered in England and Wales (06246376). Mojo are authorised and regulated by the Financial Conduct Authority and are on the Financial Services Register (478215)
Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH. To contact Mojo by phone, please call 0333 123 0012.