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Hot Topic Highlight – First Homes Scheme

Updated: Oct 30, 2023

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What is today's blog about?

In this week’s blog, we look at the Government’s First Homes scheme.

This is essential reading for any candidates with Planning or Purchase & Sale as a technical competency, as well as any candidates who are involved with affordable housing or the wider residential property market.

When was the scheme launched?

The scheme was launched in England in June 2021 to help first time buyers purchase their first home by reducing the amount of deposit and mortgage funding required.

The scheme sits alongside Help to Buy equity loans, shared ownership properties and the Government’s 95% mortgage guarantee scheme.

What is a First Home?

A First Home is a type of discounted market sale housing, meeting the following requirements:

  • It must be new build

  • It must be discounted by a minimum of 30% against Market Value

  • It must be sold to a person or persons meeting the First Homes eligibility criteria

  • On first sale, a restriction must be registered on the Title Register to ensure that the discount to Market Value and other certain restrictions are transferred at future sale

  • After the discount has been applied, the first sale must be at no more than £250,000 (or £420,000 in Greater London). Subsequent sales are not subject to this cap

How are First Homes considered under planning policy?

A First Home meets the definition of affordable housing for planning purposes.

They are the ‘Government’s preferred discounted market tenure and should account for at least 25% of all affordable housing units delivered by developers through planning obligations’ (, 2021).

Developers should enter into a S106 agreement relating to the First Homes restrictions on use and sale, which are recorded on the Title Register.

What are the eligibility requirements to purchase a First Home?

Paragraph 6 of Schedule 6ZA of the Finance Act 2003 defines who is a first time buyer. This relates to the definition for Stamp Duty Land Tax relief purposes.

First time buyers (an individual, couple or group of purchasers) should have:

  • A combined annual household income below £80,000, or £90,000 in Greater London

  • A mortgage or home purchase plan (under Islamic law) to fund a minimum of 50% of the discounted purchase price

First time buyers must not have owned a property previously. If purchasing together or in a group, both or all parties must be classed as first time buyers.

The property must be bought as a main residence and not a buy to let investment.

What are the issues facing the scheme?

The scheme only relates to new build homes, which typically sell at a premium to second hand properties in the market. This is known as a new build premium. You can read more in our blog article on the relevant RICS guidance.

When the property is sold for the first time, it must then be sold again to a first time buyer and with the First Home discount applied.

How can we help?

Stay tuned for our next blog post to help build a better you.

N.b. Nothing in this article constitutes legal, professional or financial advice.


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