First Homes Scheme Calculator

The First Homes scheme offers first-time buyers in England a minimum 30% discount on new-build homes, with some local authorities offering up to 50% off. The discount is funded by the developer and set through Section 106 planning agreements. After the discount, the home must cost no more than £250,000 (or £420,000 in London).

Eligibility requirements include being a first-time buyer, a household income below £80,000 (£90,000 in London), and securing a mortgage for at least 50% of the discounted price. Local connection and key worker status may be prioritised. The discount is locked into the property title, meaning future sales must also be at the same percentage discount.

This calculator shows the purchase price after the discount, compares it with the market value, estimates your mortgage payments on the reduced price and calculates the stamp duty (first-time buyer relief usually applies). It also models future equity growth based on assumed house price appreciation.

What is the First Homes scheme? Government-backed scheme launched 2021 — first-time buyers buy newly-built homes at 30-50% discount to open market value. Discount stays with the property forever (passed to next buyer). Income cap: £80,000 household (£90,000 in London). Maximum property values: £250,000 after discount (£420,000 London). Eligibility: first-time buyer, key worker priority in many areas, local connection preferred. Available only on new-build participating developments.

How First Homes pricing works. Sample: open market value £280,000. 30% discount: buy at £196,000. Save £84,000 upfront. Future sale: must sell at 30% discount of NEW market value (e.g. £350,000 → sell at £245,000). Discount permanent. Mortgage: only on discount-price (£196,000), not market value — easier to afford. Deposit: still 5-10% of discounted price typical (£10k-£20k vs £14k-£28k market price).

First Homes vs other government schemes. Help to Buy: replaced by First Homes April 2023 (HTB equity loan ended). Shared Ownership: buy 25-75% share, pay rent on rest; First Homes 100% ownership at discount. Lifetime ISA: £4,000/year + 25% government bonus = £1,000/year toward first home. Stamp Duty: First-time buyer threshold £425,000 (no SDLT below). Mortgage Guarantee Scheme: government underwrites 95% LTV mortgages — separate from First Homes.

Local eligibility criteria. Each council sets local rules. Common requirements: live or work in local authority area 3+ years; key worker (NHS, teacher, police, armed forces); on housing waiting list; First Homes for first 3 months only available to local residents (then opens to wider area). London priority: typically lower income cap, higher discount (40-50%). Rural exceptions: smaller developments in villages (Section 106 housing).

Hidden considerations and risks. First Homes are 'restricted resale' — must always sell at original discount %. Limits future capital gain. Mortgage lenders accepting First Homes: Halifax, Barclays, Nationwide, Skipton — but lender choice narrower than full-price market. Some restrictions on letting (typically must be primary residence). Service charges on flats: same as full-price flats — can be £2-£5k/year. Build quality concerns: research developer (NHBC reviews, Trustpilot). Overall: strong scheme for first-time buyers without family help; less attractive if you expect to move within 5 years (limited capital gain).