Heron Financial arranged a £119,000 mortgage with Halifax Intermediaries at an initial fixed rate of 4.00% on a 2-year fix for a solo first-time buyer purchasing a home in Kent through the First Homes Scheme. The scheme discount of £60,000 sat alongside £21,000 of personal savings to make up the deposit, placing the loan at approximately 60% LTV against the £200,000 discounted purchase price. The case completed in December 2025.
The client
The client was a solo British first-time buyer in a PAYE employed role with a £34,000 annual salary. They were buying through the First Homes Scheme, a UK government scheme that offers eligible first-time buyers a discount of at least 30% on the market price of new build homes in England. With personal savings of £21,000 and the scheme discount providing the rest of the equity position, they were ready to buy at the £200,000 discounted purchase price.
The case at glance
- Buyer: Solo first-time buyer, British national, employed (PAYE)
- Income: £34,000 annual salary
- Property type: House
- Location: Kent
- Scheme used: First Homes Scheme
- Purchase price (discounted): £200,000
- Deposit: £81,000 total (£21,000 personal savings + £60,000 First Homes Scheme discount)
- Loan amount: £119,000
- LTV: Approximately 60% against the discounted purchase price
- Lender: Halifax Intermediaries
- Product: 2-Year Fixed Rate
- Initial fixed rate: 4.00%
- Repayment method: Capital and interest
The challenge
Two features shaped this case
1. First Homes Scheme purchase. The First Homes Scheme is a UK government scheme launched in 2021 that requires eligible new build developments to sell a proportion of homes to first-time buyers at a discount of at least 30% (and sometimes 50%) below market value. The discount is held against the property in perpetuity, when the buyer eventually sells, the property must be sold to another eligible first-time buyer at the same discount percentage. The buyer benefits from the lower purchase price; the property remains within the scheme.
Not every mortgage lender accepts First Homes Scheme purchases. Those that do typically calculate LTV against the discounted purchase price rather than the open market value, which means the buyer’s actual cash deposit is smaller as a proportion of the open market value than it appears on the lender’s calculations. The right lender choice depends on which providers accept the scheme and on what terms.
In this case, the £60,000 scheme discount was recorded as part of the deposit picture against the £200,000 discounted purchase price. The borrower’s actual cash contribution was £21,000 in personal savings. The lender’s loan of £119,000 represented approximately 60% of the discounted purchase price.
2. FTB affordability at a modest income. With a £34,000 salary, the £119,000 loan was placed within standard mainstream affordability rules for a solo first-time buyer. The First Homes Scheme structure is particularly valuable for FTBs on more modest incomes, since the discount effectively reduces the size of the mortgage they need to qualify for. Without the scheme, the same property at full market value would have required either a much larger deposit, a higher income or a different property choice.
The 60% LTV positioning placed the loan inside the cheapest mainstream pricing tier, which was reflected in the competitive 4.00% rate from Halifax.
How Heron Financial approached the recommendation
The Heron adviser confirmed the client’s eligibility for the First Homes Scheme, worked through affordability against the £34,000 salary, and matched the case to a lender that accepts First Homes Scheme purchases and was pricing competitively at the time of application. Halifax Intermediaries, the broker channel of Halifax (part of Lloyds Banking Group), accepted the scheme structure and offered a 2-year fixed rate at 4.00%.
Heron Financial managed the application through underwriting, completion of the scheme-related documentation and the lender’s standard new build process.
The outcome
The case completed in December 2025. The client moved into their new home in Kent with a fixed monthly payment locked in for the next two years and a clear point in the calendar to review their mortgage with Heron Financial ahead of the product end.
What this means for buyers in a similar position
The First Homes Scheme is one of the most valuable government schemes currently available to UK first-time buyers, particularly those on more modest incomes. A few practical points worth knowing.
The discount stays with the property. First Homes Scheme properties carry the discount in perpetuity. When the buyer eventually sells, the property must be sold to another eligible first-time buyer at the same discount percentage from market value. This means the discount benefits future generations of FTBs, not just the current buyer.
Eligibility criteria apply. Buyers must be first-time buyers, meet income caps (typically £80,000, or £90,000 in London), and use the property as their main residence. Some local authorities apply additional criteria including local connection or key worker priority.
Not every lender accepts First Homes. Lender appetite for First Homes Scheme purchases varies. Some major mainstream lenders accept the scheme; others don’t. Specialist lenders are sometimes used for cases that mainstream lenders won’t write. The right placement depends on the lender market at the time.
LTV is calculated against the discounted price. Most lenders that accept the scheme calculate LTV against the discounted purchase price rather than the open market value. This generally produces a comfortable LTV for the borrower and access to competitive pricing tiers.
Cash deposit is smaller as a proportion of market value. Because the scheme discount represents equity in the property at acquisition, the borrower’s actual cash deposit is a smaller proportion of the open market value than the headline LTV suggests. This is the financial benefit the scheme is designed to deliver.
For FTBs eligible for the scheme, the practical question is which lender accepts the scheme structure and prices the case best. Working with a broker who tracks lender appetite for the scheme is what makes the difference between a clean placement and weeks lost to a lender that won’t write the case.
FAQs
What is the First Homes Scheme?
The First Homes Scheme is a UK government scheme launched in 2021 that requires eligible new build developments to sell a proportion of homes to first-time buyers at a discount of at least 30% below market value. The discount stays with the property in perpetuity, passing to the next first-time buyer at resale. In this Heron Financial case, the scheme provided a £60,000 discount on a home with a discounted purchase price of £200,000.
Which lenders accept First Homes Scheme purchases?
Lender appetite for First Homes Scheme purchases varies. Several major mainstream lenders accept the scheme, including Halifax (as in this case). Some lenders don’t accept it at all. The lender shortlist for First Homes Scheme cases is narrower than for standard FTB purchases, and broker advice is particularly valuable.
How is the First Homes Scheme discount treated in a mortgage application?
Most lenders that accept the scheme calculate LTV against the discounted purchase price rather than the open market value. The scheme discount represents equity in the property at acquisition, with the borrower’s cash deposit making up the additional contribution required. In this Heron Financial case, the LTV was approximately 60% against the £200,000 discounted price.
Am I eligible for the First Homes Scheme?
The standard eligibility criteria include being a first-time buyer, meeting income caps (typically £80,000 nationally or £90,000 in London) and using the property as your main residence. Some local authorities apply additional criteria including local connection or key worker priority. Eligibility should be confirmed with the local authority and the developer before proceeding.
Is Halifax good for First Homes Scheme mortgages?
Halifax Intermediaries is the broker channel of Halifax, one of the major UK mainstream lenders, and accepts First Homes Scheme purchases within its lending criteria. Heron Financial assesses every case on its merits and selects a lender based on affordability, product pricing, criteria fit and service standards at the time of application.
