First Homes Scheme & Government Grants: How First-Time Buyers Can Get Help in 2026

Purchasing your first home represents a significant milestone, but the financial barriers can seem daunting. The United Kingdom government continues to offer targeted support for first-time buyers through various schemes and grants designed to reduce upfront costs and make homeownership accessible. Understanding these options and how they work together can help you plan your property purchase more effectively.

What is the First Homes Scheme?

The First Homes Scheme is a government initiative that offers newly built homes to first-time buyers at a discount of at least 30% compared to market value. In some areas, local authorities may increase this discount to 40% or 50%, depending on regional affordability challenges. The scheme aims to help local people, key workers, and those with strong connections to specific areas get onto the property ladder.

Homes purchased through this scheme remain discounted for future eligible buyers, ensuring long-term affordability. The discount is secured through a legal covenant on the property, which means when you eventually sell, the same percentage discount must be passed on to the next first-time buyer. Properties are typically sold through local estate agents and developers participating in the programme.

The scheme applies to homes with a maximum purchase price of £250,000 nationally, or £420,000 in London. Buyers must secure a mortgage covering at least half of the discounted purchase price, making it essential to have some savings or access to deposit assistance.

Eligibility Criteria for First-Time Buyers in 2026

To qualify for the First Homes Scheme, you must meet specific requirements. First and foremost, you must be a first-time buyer, meaning you have never owned a home anywhere in the world, whether independently or jointly. This includes inherited properties.

You must be aged 18 or over and intend to occupy the property as your only residence. The scheme is designed for owner-occupiers, not investors or those seeking second homes. Your household income must not exceed £80,000 annually, or £90,000 in London. This figure includes the combined income of all buyers if purchasing jointly.

Local connection requirements may apply in certain areas, prioritising residents who have lived or worked in the region for a specified period, typically three years. Key workers, including NHS staff, teachers, police officers, and armed forces personnel, may receive priority in some local authority areas.

You must secure a mortgage for at least 50% of the discounted purchase price. Lenders participating in the scheme understand the discount structure and offer suitable mortgage products. It is advisable to obtain a mortgage agreement in principle before beginning your property search.

How Government Grants Support Your Deposit

Beyond the First Homes discount, several government-backed initiatives can help with deposit requirements. While specific grant programmes evolve, understanding available support mechanisms remains crucial for planning your purchase.

Lifetime ISAs allow first-time buyers under 40 to save up to £4,000 annually, with the government adding a 25% bonus. This means for every £4,000 saved, you receive an additional £1,000 towards your deposit. Funds can be used for properties up to £450,000, and the account must be open for at least 12 months before withdrawal.

Shared Ownership schemes enable buyers to purchase a share of a property, typically between 25% and 75%, while paying rent on the remaining portion. This reduces the deposit needed and makes monthly costs more manageable. You can gradually increase your ownership share through a process called staircasing.

Some local authorities offer deposit loan schemes, providing interest-free or low-interest loans to help bridge the gap between your savings and the required deposit. Eligibility and availability vary by region, so checking with your local council is essential.

Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.

Step-by-Step: Applying for Help in 2026

Navigating the application process requires careful planning and organisation. Start by assessing your financial situation, including savings, income, and credit rating. Use online mortgage calculators to estimate how much you can borrow and what monthly payments would look like.

Next, research available properties through the First Homes Scheme by checking local developer websites and estate agents participating in the programme. Register your interest early, as demand often exceeds supply in popular areas.

Obtain a mortgage agreement in principle from lenders familiar with the First Homes Scheme. This demonstrates to sellers that you are a serious buyer and helps you understand your budget constraints. Compare products from multiple lenders to secure favourable terms.

If eligible for additional support like Lifetime ISAs or local deposit loans, ensure these are in place before making an offer. Coordinate timing carefully, as some funds require advance notice for withdrawal.

Once you identify a suitable property, submit your application through the designated process, which typically involves proving eligibility through income documentation, residency evidence, and first-time buyer status. Legal representatives will handle the conveyancing, ensuring the discount covenant is properly registered.

Finally, complete any required surveys and finalise your mortgage before exchange and completion. Budget for additional costs including legal fees, surveys, and moving expenses, which typically range from £2,000 to £5,000.

Pros and Cons: Making an Informed Decision

The First Homes Scheme and associated grants offer significant advantages but also come with considerations worth evaluating carefully.

Advantages include substantial upfront savings through the minimum 30% discount, making homeownership accessible sooner than through traditional routes. The scheme provides certainty around pricing and eligibility, unlike competitive open market bidding. Government backing offers reassurance about programme legitimacy and structure.

Combining the scheme with other support like Lifetime ISAs maximises your purchasing power and reduces financial strain. Priority access for key workers and local residents ensures those contributing to communities can afford to live where they work.

However, limitations exist. The scheme applies only to new-build properties, restricting choice compared to the broader housing market. Resale restrictions mean you must sell to another eligible first-time buyer at the same discount percentage, potentially limiting your profit when moving.

Income caps may exclude some buyers, particularly couples with two professional salaries in high-cost areas. Mortgage options may be more limited, as not all lenders participate in the scheme. The requirement to use the property as your main residence prevents buy-to-let investment.

Availability varies significantly by region, with some areas offering few properties through the scheme. Demand often outstrips supply, creating competition even among eligible buyers.

Weighing these factors against your personal circumstances, long-term plans, and local market conditions will help determine whether these schemes align with your homeownership goals. Consulting with independent financial advisors and mortgage brokers can provide tailored guidance based on your specific situation.