As of the 28 June 2021, national policy in England prioritises the delivery of First Homes as part of developer contributions, as well as on ‘exception sites’.

A key strand of the new First Homes policy is ensuring that more new homes are available at a discount to local people who would otherwise struggle to buy a home on the open market.

The initiative is a feature of the government’s “levelling up” agenda.

Over the last 23 years, the average house price in the UK has increased from £58,854 in August 1996 to £235,298 in November 2019, quadrupling the deposit needed to buy. With new homes priced beyond the means of many people, communities have little incentive to support new housing developments in their areas.

Yet by contrast, when the benefits to local first-time buyers are clear, local support for development is high: almost 3 in 4 (73%) of people in England support the building of more affordable homes in their local area.

The Ministry of Housing, Communities and Local Government aims to sell at least 10,000 homes at a discount through the First Homes scheme in years to come if there is enough demand.

What is a First Home?

A First Home is:

  • discounted in perpetuity by a minimum of 30% against the market value, with Council’s able to set 40% or 50% in perpetuity discounts where need is evidenced, and developers permitted to offer higher in perpetuity discounts
  • after the discount has been applied, the first sale price of the home must be no higher than £420,000 in Greater London or £250,000 elsewhere in England with Council’s able to set lower price caps
  • sold with a mortgage or home purchase plan for at least 50% of the discounted purchase value to a person meeting the First Homes eligibility criteria
  • a primary residence, not used for investment or commercial gain, albeit it may be let for up to two years

Who is eligible?

First Homes are to be “prioritised” for first time buyers (as defined in legislation already for the purpose of stamp duty relief).

Councils will be able to prioritise key workers and people with a local connection when deciding who is eligible for the scheme.

If no local tests are set, the purchaser must be a first-time buyer purchasing borrowing at least 50% of the discounted purchase value. The purchaser (or purchasers) should not have a combined annual household income greater than £80,000 (or £90,000 in Greater London) in the tax year immediately preceding the year of purchase.

First Homes exception site policy

The First Homes exception site policy could create new opportunities for land which would not normally be supported for development.

First Home exception sites can come forward on unallocated land outside of a Local Plan (albeit not in the Green Belt, National Parks, a limited number of designated ‘rural areas’, or Areas of Outstanding Natural Beauty).

Exception sites have to deliver primarily First Homes - but not exclusively. Schemes on these exception sites can include a proportion of market homes. The policy says that “First Homes exception sites can deliver a small proportion of market housing, provided that it can be demonstrated that this is necessary in order to ensure the overall viability of the site”. Exception sites also should be adjacent to existing settlements and proportionate in size to them and need to comply with any local design policies and standards.

Local Planning Authorities are told to support the development of these exception sites unless the need for such homes is already being met within the local authority’s area.

As a specialist land promoter Catesby Estates has studied the First Homes policy in detail and can advise landowners on situations where it could be utilised as part of a promotion strategy.

Could your land have development potential?

Find out more about land promotion at

Ed Barrett – Associate Director, Planning

01926 836910 /