Last reviewed: May 2026 ·
The First Homes Scheme sounds straightforward — a 30% discount on a new-build home.
But the eligibility rules, resale restrictions, remortgaging complications, and deposit calculations raise dozens of questions that official guidance does not answer .
Here are the 25 questions our team answered for you.
The quick answer — what the First Homes Scheme actually is
The First Homes Scheme gives first-time buyers in England a minimum 30% discount off the full market price of a new-build property.
You buy 100% of the home from day one. The discount is written permanently into the title deed — meaning when you sell, the same percentage discount must be passed on to the next eligible buyer.
| Key fact | Detail |
|---|---|
| Minimum discount | 30% off full market value |
| Maximum discount | 50% off full market value |
| Ownership from day one | 100% — no rent, no housing association |
| Income cap England | Under £80,000 gross household income |
| Income cap London | Under £90,000 gross household income |
| Price cap England | £250,000 after discount |
| Price cap London | £420,000 after discount |
| Property type | New-build only |
| Available in | England only |
| Resale restriction | Same % discount passed to next eligible FTB forever |
→ Read our complete guide: First Homes Scheme UK — complete 2026 guide — everything about how the scheme works, how to apply, and what the discount means in practice.
Source: GOV.UK — First Homes Scheme
First Homes Scheme eligibility
1. Do both buyers need to be first-time buyers if we are purchasing jointly?
Yes — without exception. If you are buying jointly, every person named on the title deeds must be a first-time buyer.
If one person has previously owned a residential property anywhere in the world — including properties inherited or received as a gift — the entire application is disqualified from First Homes eligibility.
This is one of the most common reasons buyers are turned away from the scheme.
A couple where one partner previously owned a flat, even briefly, cannot use the First Homes Scheme together regardless of how long ago the previous ownership was.
Source: Hull City Council — First Homes eligibility
2. My relationship ended and my ex owned the home we lived in. Am I still a first-time buyer?
This depends entirely on whether your name was on the title deeds of that property.
If you were only on the mortgage — not the title deeds — you are still legally a first-time buyer for the purposes of the First Homes Scheme.
SDLT and scheme eligibility are both assessed based on who is named on the title deeds, not on the mortgage.
If your name was on the title deeds, even as a joint owner with your ex-partner, you are no longer a first-time buyer and cannot use the First Homes Scheme.
The Shared Ownership scheme may still be available to you in this situation.
Source: Malvern Hills District Council — First Homes eligibility criteria
3. I inherited a share of a property. Does that stop me qualifying?
Yes. If you have ever owned a residential property — including through inheritance — you no longer meet the first-time buyer definition under Schedule 6ZA of the Finance Act 2003, which the First Homes Scheme uses.
This applies even if you never lived in the inherited property, never benefited financially from it, and sold your share immediately.
The act of having owned it is what counts — not how long you owned it or why.
This is a genuinely harsh rule that catches many buyers by surprise.
If this applies to you, speak to a conveyancing solicitor before assuming you are disqualified — there are occasional nuances depending on the exact circumstances of the inheritance.
Source: Malvern Hills District Council — Finance Act 2003 Schedule 6ZA reference
4. Can my parents go on the mortgage without affecting my eligibility?
Yes — under a specific mortgage structure called Joint Borrower Sole Proprietor (JBSP).
Under this arrangement, a parent is named on the mortgage to boost affordability — but is not named on the title deeds.
Because First Homes eligibility is assessed based on the title deeds, not the mortgage, the parent’s prior property ownership does not disqualify you.
This must be arranged specifically as a JBSP mortgage and agreed with both your lender and conveyancing solicitor from the outset.
Not all lenders offer this product — your mortgage broker will need to confirm availability before you reserve the property.
Source: The Mortgage Dog — SDLT and JBSP guidance
5. What if my income is just above the £80,000 cap?
The income cap of £80,000 is a strict threshold — there is no grace period or rounding. If your combined household income from the previous tax year exceeds £80,000, you do not qualify.
However, two things are worth checking before giving up.
First, certain income types are excluded from the cap calculation — including child benefit, tax credits, and some one-off bonuses.
It is worth confirming exactly which income is counted with a mortgage adviser or the developer’s sales team.
Second, some local authorities set a lower local income cap than the national £80,000 figure. Importantly, no council can set a cap higher than £80,000 — the national cap is the maximum.
So if you are just below £80,000, you should always check whether your local council has applied a stricter local cap that could still exclude you.
Source: GOV.UK — First Homes Scheme eligibility
Source: DLUHC — First Homes Local Authority Guidance Version 2, February 2024
6. Does the income cap use this year’s income or last year’s?
Last year’s income — specifically the previous tax year immediately preceding the year of purchase.
This is important for buyers whose income has changed significantly.
If you earned £95,000 last year but took a pay cut and now earn £72,000, you do not qualify based on last year’s income figure.
Conversely, if you earned £75,000 last year but recently received a promotion that takes you to £90,000, you would currently qualify based on last year’s figure.
Always confirm which tax year applies with the developer and your solicitor before making a reservation.
Source: Malvern Hills District Council — First Homes eligibility
7. I am a key worker. Do I get automatic priority?
You get priority — but it is not automatic nationwide and does not guarantee you a property.
Key workers including NHS staff, teachers, police officers, firefighters, and armed forces personnel receive a priority window — typically the first three months after a First Homes property is listed.
During that period, only key workers and buyers with a qualifying local connection can submit applications.
After the three-month window closes, any eligible first-time buyer can apply. So key worker status gives you first pick — not guaranteed access.
The definition of key worker and the length of the priority period varies by local authority. Some councils define it broadly.
Others have a very specific list of qualifying occupations.
Check your local council’s published First Homes criteria before assuming your occupation qualifies.
Source: GOV.UK — First Homes Scheme local criteria
8. I am in the armed forces. Do the local connection rules apply to me?
No. Members of the armed forces, veterans who left within the last five years, and widows or widowers of armed forces personnel are specifically exempt from both the key worker priority criteria and the local connection criteria.
This means an armed forces buyer can apply for any First Homes property in England — regardless of where the property is located and regardless of whether they have ever lived or worked in that area.
You must still meet all other eligibility requirements — income cap, first-time buyer status, mortgage requirement, and property price cap.
Source: GOV.UK — First Homes Scheme
9. Can I use the First Homes Scheme if I am self-employed?
Yes — being self-employed does not disqualify you.
However, lenders assess self-employed mortgage applications differently, which can affect your ability to borrow enough to purchase a First Homes property.
Most lenders require a minimum of two years of self-employed accounts or tax returns.
They will typically use the average of your last two years’ net profit — or sometimes the lower of the two years — as your income for affordability purposes.
This can mean your borrowing capacity is lower than an equivalently-earning employed buyer.
A whole-of-market mortgage broker with experience in self-employed applications is strongly recommended before you reserve a First Homes property.
Source: Share to Buy — First Homes Scheme and mortgage eligibility
10. Is there an age limit for the First Homes Scheme?
There is no maximum age limit. You can be 45, 55, or 65 and still apply — provided you meet all other eligibility criteria.
The practical limit is your mortgage term.
Most lenders require the mortgage to be repaid by age 70 or 75.
If you are older, the maximum mortgage term available to you will be shorter — which means higher monthly repayments and potentially lower borrowing capacity.
There is no minimum age limit beyond being 18 or over to enter a legal contract.
Source: GOV.UK — First Homes Scheme
First Homes Scheme deposit and mortgage requirements
11. How much deposit do I need for a First Homes property?
You need a minimum deposit of 5% of the discounted purchase price — not 5% of the full market value.
This is one of the most financially significant advantages of the scheme.
Because the purchase price is reduced by 30–50%, the deposit required is proportionally lower.
| Full market value | Discount | Your purchase price | 5% deposit needed |
|---|---|---|---|
| £300,000 | 30% | £210,000 | £10,500 |
| £350,000 | 30% | £245,000 | £12,250 |
| £400,000 | 30% | £280,000 | £14,000 |
| £400,000 | 40% | £240,000 | £12,000 |
| £500,000 | 30% | £350,000 | £17,500 |
A larger deposit of 10% or more will give you access to better mortgage rates and lower monthly repayments — but 5% is the legally required minimum.
Source: Bury Council — First Homes Scheme mortgage and deposit requirements
12. Can I use a Lifetime ISA towards my First Homes deposit?
Yes — and this is one of the most powerful combinations available to first-time buyers in England.
A Lifetime ISA gives you a 25% government bonus on savings of up to £4,000 per year — meaning up to £1,000 free money added to your savings annually.
This can be used directly towards the deposit on a First Homes property, provided the discounted purchase price does not exceed £450,000.
The LISA bonus is paid after the property purchase completes. You must have held the LISA for at least 12 months before using it.
If you withdraw the LISA savings for any other purpose, a 25% withdrawal penalty applies — which effectively takes back the bonus and a portion of your own savings.
13. Do I have to use a mortgage — can I buy with cash?
No. A mortgage is a legal requirement of the First Homes Scheme — you cannot purchase with cash even if you have sufficient funds available.
The mortgage must cover a minimum of 50% of the discounted purchase price.
This rule exists to ensure the scheme genuinely helps buyers who need financial support to access homeownership — not buyers who are simply seeking a discount on a property they could afford outright.
If you follow Islamic finance principles and require a Sharia-compliant product, a home purchase plan is accepted in place of a conventional mortgage — subject to the same 50% minimum rule.
Source: Bury Council — First Homes Scheme h
14. Which mortgage lenders accept First Homes Scheme properties?
Not all lenders have confirmed their position on First Homes properties — and this is a critically important check to make before you reserve.
Lenders who have publicly confirmed they will lend against First Homes properties include major high street banks and building societies.
However, the list of participating lenders changes as the scheme matures.
Some lenders have specific requirements around the discount percentage or require additional legal undertakings.
Always confirm with a whole-of-market mortgage broker — before paying any reservation fee — that at least two lenders will offer you a mortgage on the specific First Homes property you are considering.
The developer’s in-house mortgage adviser may not have access to the full market and may not tell you if options are limited.
Source: Which? — First-time buyer schemes UK
15. Can I remortgage a First Homes property?
Yes — but with important caveats that every First Homes buyer must understand before purchasing.
You can remortgage to a new deal with the same or a different lender when your fixed rate expires.
However, because the property carries a resale covenant restricting who can buy it and at what price, some lenders are cautious about lending against First Homes properties.
The market value your lender will use for remortgaging purposes is the discounted value — not the full open market value. This means your loan-to-value ratio is calculated on the lower discounted price.
For most remortgages this is straightforward, but it limits how much equity you can release compared to an equivalent property without a covenant.
As the First Homes Scheme matures and more properties reach remortgage stage, lender appetite is expected to grow.
Always use a whole-of-market broker when remortgaging a First Homes property to access all available options.
Source: Miller Rose — What’s available for first-time buyers in 2026
First Homes Scheme resale restrictions — what every buyer must know
16. What exactly is the resale restriction — explained simply?
When you bought your First Homes property, you paid a discounted price.
That discount — whether 30%, 40%, or 50% — is written permanently into the title deed of the property as a legal covenant.
When you sell, you must apply the same percentage discount to whatever the full market value is at that point in time.
You cannot sell at full market value. Ever.
Here is a simple example:
| At purchase | At resale 10 years later | |
|---|---|---|
| Full market value | £300,000 | £420,000 |
| Your discount | 30% | 30% (same — fixed forever) |
| Your sale price | £210,000 | £294,000 |
| Open market price | £210,000 | £420,000 |
| Your equity vs open market | Same | £126,000 less |
Your equity still grows — because the discounted value grows as the market rises. But it grows more slowly than if you had bought at full market value.
This is the honest long-term trade-off of the scheme.
Source: DLUHC — First Homes Local Authority Guidance Version 2
17. Who can I sell my First Homes property to?
You can only sell to another buyer who meets all of the First Homes Scheme eligibility criteria at the time of your sale — including the income cap, first-time buyer status, and mortgage requirement that were applicable when you bought.
If the eligibility criteria have changed since you purchased, the criteria that apply to your resale are those that were in place when you originally bought — not the current criteria.
If you cannot find an eligible buyer after a reasonable marketing period, there are specific circumstances where the local authority may provide assistance or waive certain criteria.
However, this is not guaranteed and varies by council.
Source: Medway Council — First Homes eligibility criteria
18. What happens to the resale restriction if I want to sell in 2 years?
The resale restriction applies from the very first day you own the property — there is no minimum ownership period before you can sell.
You can sell after two years, five years, or twenty years and the same discount covenant applies every time.
However, selling early can be financially costly for practical reasons.
You will have paid legal fees, survey costs, mortgage arrangement fees, and potentially Stamp Duty on purchase.
Selling quickly means those upfront costs are spread over a very short ownership period — reducing your effective financial return significantly.
There is no restriction on selling early — but the economics rarely favour it.
Source: Bury Council — First Homes Scheme resale terms
19. Does my equity grow even with the resale discount?
Yes — your equity does grow, but more slowly than on an equivalent open-market purchase.
Because you bought at a discounted price, your mortgage balance is lower relative to the property’s open-market value.
As the open-market value rises, your discounted sale price rises proportionally.
Your equity is the difference between the discounted sale price and your outstanding mortgage.
The important thing to understand is that you capture 100% of the growth in the discounted value — you are not capped at a fixed sale price.
A 10% rise in the open market value translates to a 10% rise in your discounted sale price too.
What you do not capture is the uplift from buying at below market value. An open-market buyer who paid £300,000 for a property now worth £420,000 gains £120,000.
You paid £210,000 for the same property and can now sell for £294,000 — a gain of £84,000. The discount has cost you £36,000 in potential equity — but saved you £90,000 on purchase price.
Over the long term the scheme still represents a substantial financial benefit for most buyers.
Source: DLUHC — First Homes Local Authority Guidance Version 2
20. Can I rent out my First Homes property?
You can take in a lodger — a single person renting a room in the property while you continue to live there as your main residence. This has no time restriction.
You cannot rent out the entire property — making yourself a landlord — for more than two years in total during your ownership. “The property must remain your main residence. If you need to move temporarily for work, you may apply to your local council for permission to let the property for a defined period.”
If you need to move temporarily for work, you may apply to your local council for permission to let the property for a defined period.
Renting the property out in full without council permission is a breach of the First Homes covenant and can result in legal action from the local authority.
Source: Medway Council — First Homes eligibility criteria
21. What happens to the discount if the property market falls?
The discount percentage is fixed — but it is always applied to the current market value at the time of sale, whether that value is higher or lower than when you purchased.
If the market falls and your property’s open-market value drops below your original purchase price, your discounted sale price falls too.
In extreme cases this could mean selling for less than your remaining mortgage balance — creating negative equity.
This risk is not unique to First Homes buyers — any homeowner faces negative equity risk in a falling market.
However, First Homes buyers have a smaller buffer because their purchase price was already discounted, meaning a market fall hits their discounted value relatively quickly.
This is why First Homes is generally best suited to buyers who plan to own for at least five to seven years — long enough to benefit from market recovery cycles.
Source: Share to Buy — First Homes long-term ownership considerations
Finding and buying a First Homes Scheme property
22. Can I buy any new-build property using the First Homes Scheme?
No. Only specific properties where the local planning authority has attached a First Homes planning condition — typically through a Section 106 agreement — are eligible.
Not every new-build development includes First Homes properties.
The developer cannot choose to offer the First Homes discount voluntarily on a standard plot.
The condition must be written into the planning permission for that specific development. This is why availability varies enormously by location — some areas have many First Homes developments, others have very few.
To find First Homes properties in your area, search directly on developer websites, register with Homes England, use the Share to Buy search tool, or contact your local planning authority for a list of developments with First Homes conditions attached.
Source: GOV.UK — First Homes Scheme: how to apply
23. What is the reservation fee and is it refundable?
When you agree to purchase a First Homes property, the developer will ask for a reservation fee — typically between £500 and £2,000.
This takes the property off the market while you arrange your mortgage and instructed solicitors.
Whether the fee is refundable depends entirely on the developer’s terms and the circumstances of withdrawal.
Most developers will refund the reservation fee if the developer is unable to proceed — for example, if there are issues with planning permission or build delays beyond contracted timescales.
If you choose to withdraw, most developers will not refund the fee. Always read the reservation agreement carefully before paying — and have a solicitor review it if there is anything unclear.
Source: Which? — New-build reservation fees
24. How does Stamp Duty work on a First Homes property?
Stamp Duty Land Tax is calculated on your discounted purchase price — not on the full market value of the property. This is one of the most financially significant advantages of the scheme.
Because First Homes buyers purchase at a minimum 30% discount, many purchases fall below the £300,000 first-time buyer nil-rate threshold — meaning a large proportion of First Homes buyers pay zero Stamp Duty.
| Full market value | Discount | Purchase price | Stamp Duty |
|---|---|---|---|
| £350,000 | 30% | £245,000 | £0 |
| £400,000 | 30% | £280,000 | £0 |
| £450,000 | 30% | £315,000 | £750 |
| £500,000 | 40% | £300,000 | £0 |
| £600,000 | 50% | £300,000 | £0 |
→ Read our full guide: Do first-time buyers pay Stamp Duty in 2026? — complete guide with real £ examples for every price band. https://firsthomesscheme.com/first-time-buyer-stamp-duty/
Source: GOV.UK — SDLT residential property rates
25. What happens if the developer goes into administration before I complete?
This is a genuine risk on any new-build purchase — not unique to First Homes. If a developer enters administration before your property is completed, the outcome depends on several factors.
If the property is covered by the NHBC Buildmark warranty or a similar structural warranty, the warranty provider may step in to complete or compensate buyers in certain circumstances.
This protection applies during the build phase.
Your reservation fee is unlikely to be recoverable as an unsecured creditor in administration proceedings.
This is another reason to ensure any reservation fee paid is as small as possible and that you have read the reservation agreement carefully.
Your conveyancing solicitor should check the developer’s financial standing as part of their due diligence.
Asking for evidence of structural warranty cover and stage payment protections before exchanging contracts is strongly advisable.
Source: NHBC — Buildmark warranty
Key facts summary — everything in one place
| Question | Answer |
|---|---|
| Minimum discount | 30% off market value |
| Income cap England | Under £80,000 previous tax year |
| Income cap London | Under £90,000 previous tax year |
| Price cap England | £250,000 after discount |
| Price cap London | £420,000 after discount |
| Minimum deposit | 5% of discounted price |
| Mortgage minimum | 50% of discounted price |
| Cash purchase | Not allowed |
| LISA compatible | Yes — if discounted price under £450,000 |
| Key worker priority | Yes — 3-month window typically |
| Armed forces exemption | Yes — local criteria do not apply |
| Resale restriction | Same % discount passed on — forever |
| Can you remortgage | Yes — with some lender restrictions |
| Can you let it out | No — maximum 2 years total in full |
| Can you take a lodger | Yes — no restriction |
| Stamp Duty | Calculated on discounted price |
| Available in Scotland | No — England only |
| Available in Wales | No — England only |
Source: GOV.UK — First Homes Scheme https://www.gov.uk/first-homes-scheme
Related guides
→ First Homes Scheme UK — complete 2026 guide (core topic — start here) → Who qualifies for the First Homes Scheme? — full eligibility checklist 2026 → First Homes Scheme resale restrictions — what to know before buying → Do first-time buyers pay Stamp Duty in 2026? — exact amounts for every price band → Shared Ownership vs First Homes Scheme — which is better for you? →
Sources and references
All facts, eligibility rules, resale terms, mortgage requirements, and scheme details in this article are verified against official government publications and established housing organisations. All links confirmed April 2026.
[1] GOV.UK — First Homes Scheme: first-time buyer’s guide Publisher: HM Government · Last updated: October 2024 https://www.gov.uk/first-homes-scheme Used for: income caps · property price caps · first-time buyer definition · key worker priority · armed forces exemption · England-only rule · mortgage requirement · 3-month local criteria window
[2] GOV.UK — First Homes Scheme: how to apply Publisher: HM Government · Last updated: October 2024 https://www.gov.uk/first-homes-scheme/how-to-apply Used for: Section 106 planning condition requirement · how to find First Homes properties · solicitor requirement at application
[3] DLUHC — First Homes Local Authority Guidance Version 2 Publisher: Department for Levelling Up Housing and Communities · February 2024 https://assets.publishing.service.gov.uk/media/65cdda7a1d939500129466c9/First_Homes_Local_Authority_Guidance_V.2_-_February_2024.pdf Used for: resale covenant in perpetuity · local authority income cap powers · equity growth calculations · discount percentage fixed at point of purchase · eligibility criteria at resale
[4] Malvern Hills District Council — First Homes eligibility criteria Publisher: Malvern Hills District Council · Verified April 2026 https://www.malvernhills.gov.uk/housing/housing-advice/affordable-housing/first-homes-scheme Used for: Finance Act 2003 Schedule 6ZA legal definition · inherited property counts as prior ownership · income cap uses previous tax year · 50% mortgage minimum confirmed
[5] Hull City Council — First Homes eligibility Publisher: Hull City Council · Verified April 2026 https://www.hull.gov.uk/regeneration-1/first-homes-scheme/2 Used for: joint buyers — both must be first-time buyers · never owned in UK or abroad confirmation
[6] Bury Council — First Homes Scheme Publisher: Bury Council · Verified April 2026 https://www.bury.gov.uk/housing/buying-a-home/affordable-housing-types/first-homes-scheme Used for: cash purchase not allowed · Islamic home purchase plan accepted · 50% mortgage minimum · resale to eligible buyer at same discount · maximum 2-year full letting period
[7] Medway Council — First Homes eligibility criteria Publisher: Medway Council · Verified April 2026 https://www.medway.gov.uk/info/200585/first_homes_scheme/1548/eligibility_criteria_for_first_homes Used for: income cap does not apply after purchase · lodger permission with no time limit · 2-year maximum full letting restriction · income increase after purchase does not trigger resale
[8] MoneyHelper — Government schemes for first-time home buyers Publisher: MoneyHelper — Money and Pensions Service · Last updated: February 2026 https://www.moneyhelper.org.uk/en/homes/buying-a-home/government-schemes-for-first-time-home-buyers-and-existing-homeowners Used for: LISA 25% bonus · LISA £450,000 property cap · LISA 12-month minimum holding period · LISA withdrawal penalty
[9] GOV.UK — Stamp Duty Land Tax: residential property rates Publisher: HM Government and HMRC · Last updated: October 2024 https://www.gov.uk/stamp-duty-land-tax/residential-property-rates Used for: Stamp Duty calculated on discounted price · first-time buyer nil-rate threshold £300,000 · all SDLT rate bands
[10] Miller Rose — What’s available for first-time buyers in 2026 Publisher: Miller Rose · Last updated: December 2026 https://millerrose.co.uk/news/whats-available-for-first-time-buyers/ Used for: remortgaging First Homes properties — lender caution around covenant · discounted value used for LTV calculations · staircasing costs
[11] NHBC — Buildmark warranty Publisher: National House Building Council · Verified April 2026 https://www.nhbc.co.uk/builders/products-and-services/buildmark/ Used for: developer administration risk · Buildmark warranty coverage during build phase · structural warranty protections
[12] Which? — First-time buyer schemes UK Publisher: Which? · Last updated: March 2026 https://www.which.co.uk/money/mortgages-and-property/first-time-buyers/first-time-buyer-schemes-aIfM21c2glM4 Used for: mortgage lender eligibility for First Homes · reservation fee terms · developer in-house adviser limitations
[13] The Mortgage Dog — SDLT and JBSP guidance Publisher: The Mortgage Dog · Verified April 2026 https://themortgagedog.com/stampdutycalculator Used for: Joint Borrower Sole Proprietor — parent on mortgage not title deeds does not affect first-time buyer eligibility