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The First Homes scheme is designed to help first-time buyers in England purchase a new-build home at a discount of at least 30% (and sometimes 40% or 50% depending on local policy). In 2026, with affordability still tight and lenders continuing to scrutinise budgets carefully, understanding how eligibility works and how the application process fits with getting a mortgage can make the difference between securing a property and missing out.

What is the First Homes scheme?

First Homes is a government-backed initiative that requires certain new-build homes to be sold to eligible buyers at a discount to the market value. The key feature is that the discount is passed on in perpetuity: when you sell, the home must usually be sold with the same percentage discount to a future eligible buyer (subject to the local authority’s rules).

Unlike some other schemes, First Homes is not a shared ownership product. You buy the property outright (with a mortgage and deposit), but at a reduced purchase price.

First Homes discount in 2026: what you could get

Minimum discount: 30% off market value.
Possible higher discounts: Some local authorities set 40% or 50% in their planning policy.
Price caps (after discount): Typically £250,000 outside London and £420,000 in London (check the specific scheme documents for the development and local authority, as criteria can vary).

Example: If a home is valued at £300,000 and the discount is 30%, the First Homes price would be £210,000. Your deposit and mortgage are then based on the discounted price, which can significantly reduce the size of loan required and improve affordability metrics.

Eligibility: who can apply for First Homes in 2026?

Eligibility is set nationally but can be tightened by local authorities (and sometimes by the developer’s sales process). In broad terms, you’ll usually need to meet all of the following:

You are a first-time buyer (you’ve never owned a home in the UK or abroad).
Household income is £80,000 or less (or £90,000 or less in London).
You require a mortgage to purchase the property (cash buyers are generally not the target market).
The home is your only home and you intend to live in it (not usually suitable for buy-to-let investors).

Local priority groups (common in 2026)

Many councils prioritise applicants who meet extra conditions. These may include:

Local connection: living in the area, working locally, or having close family nearby.
Key worker status: NHS, education, emergency services, social care, or other roles defined by the council.
Affordability tests: evidence you can’t reasonably buy on the open market within the area.

Because these local rules vary, it’s essential to ask the developer (and your solicitor) for the First Homes eligibility criteria attached to that specific site.

How to apply for the First Homes scheme: the practical process

In reality, you apply via the developer/agent selling the new-build and, in many cases, the local authority’s nomination process. A typical journey looks like this:

1) Find a First Homes property

Not every new-build development includes First Homes properties. Start by:

Checking major developers’ “affordable homes” pages and local agents.
Searching local authority planning portals for sites referencing “First Homes”.
Asking the sales office directly if plots are allocated as First Homes and what the discount is.

2) Confirm eligibility early (before you reserve)

Ask for the scheme information pack and confirm:

The discount percentage and how it is calculated.
The price cap and whether the discounted price is within it.
Any local connection or key worker requirements.
What documents you must supply and the deadline for submission.

3) Get an Agreement in Principle (AIP) tailored to new-build timings

In 2026, new-build purchases still commonly involve longer timelines between reservation and completion. Mortgage lenders may have:

AIP validity periods (often 30–90 days).
Mortgage offer validity limits (commonly 6 months, sometimes extendable for new-builds).
Stricter affordability checks reflecting current interest rate stress tests and household expenditure assumptions.

A broker can help you choose a lender with a track record of supporting new-build purchases and, where needed, extensions.

4) Reserve the property (and understand your fees)

If the developer is satisfied you appear eligible, you may be able to reserve. Check:

The reservation fee and whether it’s refundable.
The deadline to exchange contracts (often 28 days).
Any incentives (and whether your lender treats them as price reductions).

5) Submit the First Homes application evidence

You’ll typically need to provide:

ID and residency documents.
Proof of first-time buyer status (often a formal declaration).
Income evidence: payslips, P60, accounts/tax calculations if self-employed.
Mortgage evidence: AIP and later the full mortgage application/offer.
Local connection evidence if required (e.g., council tax bill, employment contract, letter from employer).

6) Instruct a solicitor experienced with First Homes

First Homes involves ongoing resale restrictions and a legal mechanism to preserve the discount. Your conveyancer should review:

The Section 106 obligations and/or First Homes covenant wording.
The resale and staircasing position (First Homes is not shared ownership, but it does have resale rules).
Any requirements for valuation at purchase and future sale.

7) Complete your mortgage and prepare for completion

Once the mortgage offer is issued and legal work progresses, your main focus is meeting deadlines and keeping your finances stable. Avoid taking out new credit, and keep savings accessible for completion costs.

Mortgage considerations in 2026: what buyers often miss

Deposit size: Your deposit is calculated on the discounted price, but lenders still apply standard loan-to-value (LTV) rules. A 10% deposit on £210,000 is £21,000, not £30,000.
Valuation approach: The lender will usually value the property at market value but lend against the purchase price and their criteria. Ensure the application clearly states it is a First Homes purchase with a qualifying discount.
New-build criteria: Some lenders have maximum LTVs on new-build houses/flats. Your broker can align your lender choice with property type and warranty (e.g., NHBC, LABC, Premier Guarantee).
Affordability under current rates: Even if base rates move, lenders often use stressed affordability calculations. Reducing the loan with a First Homes discount can help, but keep a buffer for service charges and bills.

Is the First Homes scheme right for you?

First Homes can be an excellent route if you plan to stay put for several years and want the simplicity of owning outright (rather than shared ownership). However, the resale restrictions mean it’s not as flexible as a standard purchase, and it’s generally not suitable for those expecting to relocate quickly.

Checklist: documents to prepare before you apply

Passport/driving licence + proof of address
3 months’ payslips (or 2+ years’ accounts/tax documents if self-employed)
P60 (latest) and bank statements
Agreement in Principle and broker/lender details
Evidence of local connection/key worker status (if applicable)
Deposit evidence (savings statements; gifted deposit letter if relevant)

Next steps

If you’re considering the First Homes scheme in 2026, start by confirming eligibility for the specific development, then line up a mortgage strategy that fits new-build timelines and lender criteria. A mortgage broker can help you compare lenders, obtain an AIP, and present the application in a way that recognises the First Homes discount correctly—reducing delays when you’re working to a reservation and exchange deadline.

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First Homes Scheme in 2026: Eligibility, Discounts and How to Apply (Step-by-Step Guide)