First Homes Scheme
First Homes is a new Government-backed scheme to help more people onto their local property ladder.
Getting you on the ladder
Many young people dream of owning a home in their local area – whether they grew up or settled there but sometimes local properties are too expensive, forcing them to move out of their communities. First Homes is a new Government-backed scheme to help more people onto their local property ladder.
First Homes scheme supports local and key worker first-time buyers by providing a significant discount of at least 30%* on new build homes in their local area compared market prices - turning their dream of homeownership into a reality.
First Homes at a glance
What are First Homes?
- First Homes are newly built homes for local and key worker first-time buyers
- The homes are offered at a discount of at least 30%* compared to prices of equivalent properties on the open market.
- The discount will apply to the First Home forever - this means the same percentage discount from the original sale will be passed on to the new buyer every time the home is sold.
What type of properties are First Homes?
- First Homes are homes suitable for first-time buyers.
- First Homes are of the same type and quality, and meet the same standards, as the other newly built homes for open market sale within the same development.
- The maximum price of a First Home, after the discount has been applied is £250,000 in England (£420,000 in London).
Who is eligible for First Homes?
- All purchasers must be first-time buyers.
- Purchasers will also need to comply with any local connections restrictions, or key worker restrictions, set by the local authority where the First Home is located.
- The purchaser’s household’s income must be no more than £80,000* in England (or £90,000 in London).
- The current eligibility criteria will apply to all future sales of each First Home.
How can I use my First Home?
- You can decorate and update your First Home as you wish, in keeping with planning rules, any leasehold restrictions and the terms of your mortgage.
- Your First Home must be the only residential property you have for the duration of your First Home ownership.
- You may be allowed to let out your First Home in some circumstances, but only with the prior approval of the local authority and the consent of your mortgage provider.
- Lodgers are permitted, as long as the home remains your only residence.
First Homes are intended to help first-time buyers onto the property ladder. A set of national criteria has been put in place to help ensure that First Homes go to those who would otherwise struggle to buy a home. In some areas, priority may be given to people who work in certain occupations, or who already have a connection to the area. This additional local criteria is set by the relevant local authority.
To purchase a First Home, do I have to be a first-time buyer?
Yes. To buy a first home, you will need to sign a declaration confirming that you are a first-time buyer. This means you have not (either alone or with others):
- previously acquired via purchase, gift, trust or inheritance a major interest in a dwelling or an equivalent interest in residential land situated anywhere in the world; and/or
- benefited from any form of sharia mortgage finance.
If I’m buying with a partner, do they also have to be first-time buyers?
Yes. If the First Home is being bought by more than one individual all purchasers must be first-time buyers, in keeping with the definition described above.
Are there income caps?
To be eligible for a First Home, your household’s gross income must be no more than £80,000 in England or £90,000 in London. However, local authorities can set lower income caps for the first three months after a First Home goes on sale.
Is anyone exempt from having to meet the local connection criteria?
Yes. Members of the Armed Forces and recent veterans (who have left the Armed Forces within the last 5 years) are exempt from needing to meet any local connection or key worker restrictions set by local authorities. These restrictions will also not apply to bereaved spouses and civil partners of service men and women whose deaths have been wholly or partly caused by their service. In such cases, all other eligibility criteria, including first-time buyer status and the household income caps, would still have to be met.
Process for buying a First Home
In summary, the following steps would be taken to purchase a new build on the First Home scheme
Finding a home and eligibility
- Visit a development selling First Homes to see which homes are available to purchase on the scheme.
- If there is a First Home that you would like to buy, we will initially check your eligibility to buy against the local and national criteria.
- If it looks like you could be eligible, we will assist you to complete a First Homes application to the local authority.
- If you have not already done so, you should seek financial advice about mortgage availability from a mortgage advisor. You should also have a solicitor to advise you on the purchase. We can provide you with details of some recommended independent advisors.
- Alongside your mortgage advisor, we will need information and evidence from you to:
- check local and national eligibility;
- check household income; and
- determine whether you are likely to be able to obtain a mortgage, through for example a “decision in principle” from a mortgage bank or building society.
Application and legal declarations
- Once the application information has been completed you will then:
- sign the legal declarations on the application form, including confirmation that you and anyone you are purchasing with are first time buyers; and
- reserve the home and pay the reservation fee (this is refundable if you are found not to be eligible). It is very important that all buyers make this reservation commitment with their application. Applications cannot be considered by local authorities if you have not reserved your First Home, or if any required information is missing.
- The completed application is then sent to the local authority for their consideration.
- The local authority will check your application. If you meet all the requirements it will issue a First Homes ‘Authority to Proceed’ and Eligibility Certificate to you, us, your mortgage advisor and solicitor. Your solicitor will also receive instructions from the local authority. You can usually expect a local authority to issue their Authority to Proceed within five working days of application receipt.
Mortgage and solicitors
- You can now apply for your mortgage. It is very important that you do not submit your full mortgage application until you have the Authority to Proceed. Securing a ‘decision in principle’ can be done before this but submitting a full mortgage application will incur cost and you must not do this until you know you are approved to buy.
- Your solicitor will work on your purchase and follow the local authority’s instructions. You will have to make a further legal declaration that you are eligible and understand the terms of the First Homes scheme and that you can only resell the home in the future to another eligible First Homes buyer.
- Once your mortgage offer is made and the contract agreed, your solicitor will request approval to exchange contracts from the local authority.
- The local authority will check the solicitor’s request and, if it is a compliant sale, will issue an ‘Authority to Exchange’ and Compliance Certificate to your solicitor. It is very important that you keep the Compliance Certificate. This shows you are eligible and entitled to be a First Homes owner.
Deposit and exchange
- With the Authority to Exchange, you must pay your deposit (usually 5%) and exchange contracts to buy. At this point you are legally committed to buy.
- At the point of exchange we will have confirmed how long it will take to complete your First Home so that you can move in. In any event, the time between exchange and legal completion (when you move in) should be no more than six months.
- Once we have given notice of legal completion, your solicitor will get your mortgage money from your lender to pay us, as the builder. On the date of legal completion, you will get the keys and can move into your First Home!
First Homes FAQ's
First Homes will be subject to a price cap to ensure that they are available to people who need them. The cap, after the discount has been applied, is £250,000 across England and £420,000 in London. Local authorities will be able to set lower price caps to ensure that First Homes are right for the local market. These price caps apply for the initial sale only.
Yes. The First Homes scheme is intended to help people who would otherwise find it difficult to get onto the property ladder. For this reason, buyers must get a mortgage that covers at least 50% of the cost of the First Home, after the discount has been applied. Home purchase plans are also acceptable in accordance with Sharia law.
The stamp duty calculation for a First Home is based on the amount of money that is actually paid for the home, after the discount has been applied. Currently first-time buyers can expect no stamp duty on the first £300,000 spent on a property.
No. First Homes is intended as an additional option for affordable home ownership, and the Help to Buy: Equity Loan cannot therefore be used for a First Homes purchase.
No. If your First Home is a house, you will own the freehold on the property. This means that you own all of the home. If you own a First Home flat, you will own a leasehold on the property. You will not be required to repay the discount and there will be no rent owing on the discounted portion of the property.
It is recommended you seek independent financial advice before you purchase so you are clear on how First Homes works.
If your First Home is a house, you can make any improvements you wish to your home subject to planning regulations and your mortgage agreement. However, you should bear in mind that you may not recoup your investment when you decide to sell your First Home as the original percentage discount you received at purchase must be passed on to the next buyer.
If you own a First Home flat, you will be able to make improvements subject to the conditions of your lease, planning regulations and your mortgage agreement.
All First Homes owners should remember that, irrespective of any improvement that they make to the home, the restriction on the title means it can only ever be sold at the specified discount to the market value.
A First Home has a restriction on its future resale in that you can only sell to another qualifying First Homes buyer at the same percentage discount, for example, if you purchased your home at a 30% discount compared to the open market price, you must also sell it for a 30% discount compared to its open market value at the time of sale, this is to ensure the First Home continues to benefit others.
You must have your First Home valued by a valuer accredited by the Royal Institute of Chartered Surveyors (RICS). The surveyor will assess the market value of your home on the basis of comparable market value homes, and will then apply the original percentage discount you received when you initially purchased your First Home.
The process for selling First Homes is broadly similar to the process for selling properties on the open market but you must you request approval to sell from the local authority and share the eligibility criteria with the estate agent.
If you are a first-time buyer looking to get on the local property ladder, the First Homes scheme is a great way to find your dream home at a more affordable price for you. If you’re looking to buy a First Home speak to your Sales Executive at participating developments.
Register your interest in the First Homes scheme
More ways to buy your new home
Terms and conditions
First Homes scheme is subject to eligibility, terms and conditions and available on selected plots and developments. First Homes purchasers are required to fund at least 50% of the purchase price by means of a conventional mortgage, savings and any deposit where required. Please speak to your Sales Executive for more information. For more information please visit www.ownyourhome.gov.uk/scheme/first-homes/