First Homes Scheme for Teachers Explained

What the First Homes scheme actually is

First Homes is a government-backed discount scheme for first-time buyers in England, delivered through planning conditions attached to new housing developments. Housebuilders are required, as a condition of planning permission on qualifying sites, to sell a proportion of new homes at a discount to eligible first-time buyers rather than at full open-market price. The discount is a minimum of 30% off the property's full market value, and individual local authorities have the power to set a larger discount for their area — up to a maximum of 50% — if local housing affordability pressures justify it.

The scheme was designed with a specific problem in mind: in large parts of England, ordinary first-time buyers on typical local salaries — including teachers, but also many other professions — have been priced out of homeownership entirely by the gap between local earnings and local house prices, particularly in and around major cities and in the South East. Rather than a cash grant or a loan, First Homes works by permanently reducing the purchase price of specific homes, which in turn reduces both the deposit and the mortgage a buyer needs to raise.

It's worth being precise about what First Homes is not. It is not a mortgage product, it doesn't come with its own interest rate or repayment terms, and it isn't administered by a single national body you apply to directly. Instead, you apply through the housebuilder or their appointed sales agent for a specific First Homes plot on a specific development, your eligibility is checked against the national criteria (and any additional local criteria), and — if approved — you then arrange a standard mortgage against the discounted price in the normal way, just as you would for any other house purchase.

Do teachers get special priority under First Homes?

This is the single most misunderstood part of First Homes among teachers researching the scheme, so it's worth stating plainly: there is no national rule that gives teachers, as a profession, automatic priority for First Homes properties. The scheme's headline eligibility criteria — first-time buyer status, an income cap, and (for at least the first three months of marketing) a local connection to the area — apply to everyone equally, regardless of occupation.

Where things genuinely differ is at local authority level. Councils that adopt First Homes for their area have some discretion to add local criteria on top of the national baseline, and a number of local authorities have chosen to give priority to specific key worker groups — which can include teachers, along with NHS staff, police, firefighters and social care workers — either through a dedicated priority marketing window, a reserved proportion of homes on a development, or additional points in a local allocation policy. Other local authorities run First Homes with no occupation-based priority whatsoever, treating all eligible first-time buyers identically regardless of their job.

In practical terms, this means your experience of First Homes as a teacher can look very different depending on where you're buying. A teacher looking at a development in a local authority that has adopted key-worker priority might get an earlier look at available plots, or access to a small number of homes reserved specifically for local key workers before they're released to the general first-time buyer pool. A teacher looking at a development one county over, in an authority that hasn't adopted any such priority, will be competing for First Homes plots on exactly the same footing as every other eligible first-time buyer in that area — which, on a popular development, can still mean genuine competition and a need to move quickly once a plot is released.

Eligibility rules explained

Setting aside any local key-worker priority, the national eligibility rules that every First Homes applicant must meet are fairly tightly defined. You must be a first-time buyer as legally defined — meaning you (and anyone you're buying with) must never have owned a home, or a share of one, anywhere in the world. Your household income, combining you and anyone buying with you, must not exceed £80,000 a year outside London or £90,000 a year within London, based on gross income for the relevant tax year. You must also be able to obtain a mortgage or home purchase plan for at least 50% of the discounted purchase price — First Homes is not designed for cash buyers or for buyers seeking an unusually small mortgage relative to the price.

Many First Homes developments also apply a local connection test for an initial marketing period, typically three months, during which homes are only offered to buyers who live or work in the local authority area (or in some cases a wider defined region). If no eligible local buyer comes forward within that window, the home is then opened up to first-time buyers more widely. For a teacher who works in the local authority area where they're hoping to buy but doesn't currently live there, this local connection test is usually satisfied through employment rather than residence — but the exact definition varies by scheme, so it's worth confirming directly rather than assuming your school counts automatically.

• ✓ You (and anyone buying with you) have never owned a home or a share of one, anywhere in the world
• ✓ Combined household income is £80,000 a year or less outside London, or £90,000 or less in London
• ✓ You can obtain a mortgage or home purchase plan for at least 50% of the discounted price
• ✓ You meet any local connection requirement during the initial marketing window (often satisfied by working, not just living, in the area)
• ✓ You intend to use the home as your only or main residence, not as a buy-to-let or second home

It's also worth knowing that First Homes eligibility is assessed at the point of purchase, using your circumstances at that time — it isn't retrospectively affected by, say, a pay rise the following year once you're already the owner. Once you own a First Homes property, the ongoing restrictions relate to how you sell it in future (covered below), not to your income continuing to sit under the cap indefinitely.

How the discount works, in real numbers

The easiest way to understand the discount is through a worked example. Suppose a new-build two-bedroom house on a qualifying development has a full open-market value of £280,000, and the local authority for that area has set the First Homes discount at the national minimum of 30%. As a First Homes buyer, you would pay £196,000 — £280,000 minus 30% — rather than the full £280,000 an open-market buyer would pay for an equivalent, non-discounted plot on the same site.

If that same local authority had instead set the maximum permitted discount of 50%, the price would drop to £140,000 — a £140,000 saving. The percentage genuinely varies by local authority area, which means the real cash benefit of First Homes for a teacher can differ enormously depending purely on where they're buying, even before considering that regional house prices themselves vary hugely across England.

The discount reduces the price you need to mortgage and deposit against, which has a compounding effect on affordability. Using a common lending multiple of around 4.5 times income as a rough guide, a single first-time buyer teacher earning £32,000 a year might be able to borrow in the region of £144,000 — comfortably enough for the discounted £196,000 home in the example above with a reasonable deposit, but well short of what would be needed to buy the same home at its full £280,000 market value without the discount.

How to check your local scheme

Because so much of First Homes depends on local policy — the discount percentage, whether key-worker priority applies, and the exact local connection definition — the single most useful thing a teacher can do before getting attached to a specific development is check that local authority's own published First Homes or affordable housing policy. Most councils publish this on their housing or planning pages, sometimes under "affordable housing" rather than "First Homes" specifically, so it's worth searching both terms alongside your council's name.

Beyond the council's own policy, the housebuilder's sales team on a specific development is usually able to confirm, plot by plot, whether a home is being marketed as First Homes, what discount percentage applies, and whether any local connection or key-worker priority window is currently in effect. It's worth asking these questions directly and in writing (an email you can refer back to) rather than relying on a verbal answer from a sales office, since these details matter enormously to your long-term position as the owner.

• ✓ Search '[your council name] First Homes policy' and '[your council name] affordable housing policy' separately
• ✓ Ask the housebuilder's sales team, in writing, what discount percentage applies to the specific plot you're interested in
• ✓ Ask directly whether any key-worker or local-connection priority window currently applies to that development
• ✓ Confirm whether your employment (rather than residence) in the area satisfies any local connection test
• ✓ Check the national First Homes eligibility calculator on GOV.UK as a starting sense-check before contacting a developer

Getting a mortgage on a First Homes property

A First Homes purchase uses a standard residential mortgage, sized against the discounted price rather than the full market value — there's no dedicated "First Homes mortgage" product with its own rate or eligibility rules. That said, not every mainstream lender is set up to lend against First Homes properties, because the resale restrictions attached to the title affect how a lender values their security if they ever needed to repossess and sell the property. In practice, a meaningful number of high street lenders do participate, but coverage isn't universal, so it's worth confirming a specific lender's stance before falling in love with a particular plot.

A mortgage broker with recent experience of First Homes completions is genuinely useful here, since they'll already know which lenders are comfortable with the scheme's title restrictions and can often point you towards the most competitive rate among that narrower pool, rather than you discovering lender-by-lender which ones decline First Homes applications after you've already had an offer accepted on a specific plot.

Your mortgage affordability assessment itself works exactly as it would for any other purchase — the lender looks at your income, existing debt and outgoings, and lends a multiple of income (commonly in the region of 4 to 4.5 times, though this varies by lender and circumstances) against the discounted purchase price. If you're a supply or agency teacher rather than a permanent employee, the same harder affordability assessment that applies to any mortgage application applies here too — see our key worker mortgage myth vs reality guide for the full detail on that specific challenge.

The catches and resale restrictions

First Homes is a genuinely valuable scheme for many teachers, but it isn't a discount with no strings attached, and it's worth going in with clear eyes about the long-term trade-offs rather than focusing only on the headline saving at purchase.

Because First Homes is delivered almost entirely through new-build developments, buyers should also budget for the ordinary considerations that come with any new-build purchase — service charges on the wider estate, potential snagging issues in the first year, and the fact that a new development's amenities (shops, transport links, school places locally) may still be under construction or not yet fully established when you move in. None of this is specific to First Homes, but it's easy to focus so heavily on the discount that these ordinary new-build considerations get overlooked.

It's also worth understanding that First Homes reduces the price of a specific home, not your general borrowing power — if the discounted price is still above what your income and deposit can support, the discount alone won't close that gap, and you may still need to consider a smaller property, a different area, or combining First Homes eligibility with other sources of deposit (savings, a Lifetime ISA, or a family gift) to make the sums work.

First Homes vs Shared Ownership

Teachers researching affordability schemes often come across First Homes and Shared Ownership side by side, and it's worth being clear that they work in fundamentally different ways rather than being two flavours of the same thing. First Homes permanently discounts the purchase price of a home you buy outright (subject to your mortgage). Shared Ownership instead lets you buy a smaller share of a home — commonly between 10% and 75% — paying a mortgage on your share and rent on the remainder to a housing association, with the option to buy further shares over time through a process called staircasing.

For a full breakdown of how Shared Ownership works, including the staircasing process step by step and the ongoing costs to budget for, see our dedicated Shared Ownership for teachers guide. In broad terms, First Homes tends to suit a teacher who can already stretch to a full mortgage on a discounted price and wants outright ownership from day one, while Shared Ownership tends to suit a teacher in a higher-cost area who needs a smaller initial financial commitment and is comfortable building up full ownership gradually.

Step-by-step: applying for a First Homes property

While the exact process varies slightly by developer and local authority, most First Homes applications follow a broadly similar sequence from initial interest through to completion.

1. Find a qualifying development. Not every new-build site includes First Homes plots — search housebuilder websites for developments that explicitly list First Homes availability, or check your local authority's list of current affordable housing developments.
2. Register your interest and confirm eligibility. The developer or their sales agent will check your first-time buyer status, household income against the cap, and any local connection requirement before reserving a plot for you.
3. Arrange your mortgage in principle. Get an agreement in principle from a lender that's confirmed it lends on First Homes properties, sized against the discounted price — ideally with a broker who already knows which lenders participate.
4. Instruct a solicitor familiar with First Homes. The title restrictions need to be explained to you clearly and reflected correctly in the legal paperwork — use a conveyancing solicitor with genuine First Homes experience rather than assuming any residential conveyancer will handle it identically to a normal purchase.
5. Exchange and complete. As with any purchase, you exchange contracts once mortgage offer and searches are in place, then complete on the agreed date, at which point the discount and its resale restriction are formally registered against the property's title.

Throughout this process, keep a written record of every eligibility confirmation, discount percentage, and any local connection or key-worker priority statement you receive from the developer or local authority — if a query arises later, having this in writing rather than relying on memory of a phone conversation will make resolving it far more straightforward.