The First Homes scheme lets eligible first-time buyers in England buy a home for 30% to 50% less than its market value, with no rent to pay on the rest. As of October 2026 your household income must be £80,000 or less (£90,000 in London), and new build First Homes can't cost more than £250,000 after the discount (£420,000 in London).
It's often confused with shared ownership and with the old Help to Buy loan, which you can no longer apply for. First Homes is different: you own the whole home, and the discount comes off the price.
Here's who qualifies, how to apply, the rules that follow the home after you move in, and how it compares with the other first-time buyer options on GOV.UK.
Who can buy a First Home
GOV.UK says you must:
- be 18 or older
- be a first-time buyer, and if you're buying with others, all of you must be first-time buyers
- be able to get a mortgage for at least half the price of the home
- earn no more than £80,000 a year before tax (£90,000 in London), based on the previous tax year, and that's a joint limit if you're buying together
- use the home as your only or main residence
Councils can add local criteria, for example prioritising key workers, people who already live in the area or those on lower incomes. GOV.UK says those local rules only apply for the first 3 months a property is on sale, and members and former members of the armed forces don't have to meet them.
How the discount and price caps work
Developers offer First Homes with at least 30% taken off the market value, and every home is valued by an independent surveyor so the discount is based on the real market value. After the discount, a new build First Home can't cost more than £250,000, or £420,000 in London, and the council can set a lower cap.
One detail that saves buyers a little: GOV.UK says the Stamp Duty Land Tax you pay is based on the price you paid after the discount. My guide to Stamp Duty Land Tax explains the bands.
The catch: the rules follow the home
This is what many buyers don't think about until they want to move. GOV.UK says if you let or sell a First Home, you'll need to follow the First Homes scheme rules. You can usually let the whole property for no more than 2 years in total while you own it, and you must tell the council first and check with your mortgage lender. You can rent out a room for as long as you like.
The upside is that once you've bought, you don't have to keep meeting the eligibility criteria. If your income rises, you don't have to sell.
First Homes compared with the alternatives
| Option | How it works (GOV.UK, as of October 2026) | Income limit |
|---|---|---|
| First Homes | Buy the whole home at 30% to 50% below market value | £80,000, or £90,000 in London |
| Shared ownership | Buy a share between 10% and 75% and pay rent on the rest | £80,000, or £90,000 in London |
| Lifetime ISA | Save up to £4,000 a year with a 25% government bonus, for a first home costing £450,000 or less | No income limit; open it at 18 to 39 |
| Help to Buy: Equity Loan | Closed. You can no longer apply | Not applicable |
These can sometimes work together, for example using Lifetime ISA savings towards a deposit. Check the rules for each before you count on combining them, and note the Lifetime ISA's 25% withdrawal charge if you withdraw for any other reason.
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Things to check before you reserve
- Whether your council sets local criteria, and whether you're applying inside the first 3 months when they apply.
- That your mortgage lender will lend on a First Home. Not every lender does, so ask early.
- The resale and letting rules in your contract, so a future move or job relocation doesn't catch you out.
- Whether the reservation fee is refundable if your application fails, as GOV.UK says it should be.
How to apply, step by step
- Look for First Homes advertised by developers or estate agents in your area.
- Contact the developer or agent. They check you meet the criteria and submit your application to the local council.
- Expect a possible reservation fee on a new build, which GOV.UK says you get back if your application is unsuccessful.
- Get a mortgage offer for at least half the price. If you're self-employed, my guide to getting a mortgage when you're self-employed covers what lenders ask for.
- Wait for the council's decision, then complete the legal work through your conveyancer and exchange contracts once the council confirms.
GOV.UK warns that fraudsters sometimes pretend to be conveyancers when deposits are due, so confirm payment details by phone before you transfer anything.
My verdict
If you earn under the limit and want to own outright rather than part-buy, First Homes is the strongest discount on GOV.UK's list. Just go in knowing the discount comes with strings when you sell or let, and check how many First Homes your council has on offer, because supply depends on local developments. If you're still saving, a Lifetime ISA is the easiest thing to start this month. The scheme covers England only; for a decision about your own purchase, speak to a mortgage adviser or conveyancer.
Frequently asked questions
What is the First Homes scheme?
A government scheme in England that lets eligible first-time buyers buy a home for 30% to 50% less than its market value, with no rent to pay.
What is the income limit for First Homes?
As of October 2026, your household income must be £80,000 a year or less before tax, or £90,000 in London, based on the previous tax year.
What is the maximum price of a First Home?
A new build First Home can't cost more than £250,000 after the discount, or £420,000 in London. Councils can set a lower cap.
Can I rent out my First Home?
GOV.UK says you can usually let the entire property for no more than 2 years in total, after telling the council and checking with your lender. Renting a room is allowed for as long as you want.
Is Help to Buy still available?
No. GOV.UK says you can no longer apply for a Help to Buy: Equity Loan.
