Heron Financial arranged a £119,000 mortgage at 59.5% LTV for a solo first-time buyer in Kent, purchasing a purpose-built flat at a discounted price of £200,000 through the First Homes Scheme. The £60,000 scheme discount sat alongside £21,000 of personal savings to make up the deposit position, with the lender calculating LTV against the discounted purchase price rather than the open market value. Heron Financial placed the case with Halifax on a fixed rate at 4.00%, and the mortgage completed in December 2025.
The client
The client was a solo first-time buyer working as a senior marketing executive, buying their first home in Kent. They had £21,000 in personal savings and had reserved a flat through the First Homes Scheme, the government scheme that offers eligible first-time buyers a discount of at least 30% off the open market value of qualifying new-build (and selected resale) properties.
The original market value of the flat was £200,000 plus the discounted equivalent, but under the scheme, the client purchased it at £200,000 with a 30% discount baked in, meaning the actual open market value sat materially higher. The client’s job was to find a lender who would lend cleanly against the discounted price, treat the scheme correctly, and offer a sensible rate at the LTV the structure produced.
The case at a glance
- Buyer: Solo first-time buyer, employed
- Nationality: British
- Occupation: Marketing Executive
- Property type: Purpose-built flat
- Location: Kent
- Purchase price (discounted): £200,000
- Deposit: £81,000 total, £21,000 personal savings plus a £60,000 First Homes Scheme discount
- Loan amount: £119,000
- LTV (against discounted purchase price): 59.5%
- Lender: Halifax Intermediaries
- Product: Fixed Rate at 4.00%
- Repayment method: Capital and interest
- Scheme: First Homes Scheme (minimum 30% discount on open market value)
- Completion:December 2025
The challenge
The First Homes Scheme looks straightforward on the sales brochure. The mortgage side has more moving parts than buyers expect.
Not every lender supports the First Homes Scheme. A significant chunk of the high street either doesn’t lend on First Homes Scheme properties at all, or has tight conditions around the size of the discount, the property type, or the local authority’s section 106 wording. The eligible lender list is narrower than the standard new-build market.
LTV is calculated against the discounted price, not the market value. Even though the property has a higher open market value, lenders calculate LTV against the price the buyer is actually paying. That means the deposit on the discounted price still needs to satisfy the lender’s minimum (typically 5–10%). In this case, the £21,000 of personal savings comfortably exceeded that.
Section 106 restrictions stay on the property. The First Homes Scheme discount is preserved on the property in perpetuity through a section 106 planning agreement. When the client comes to sell, they must sell at the same percentage discount off the then-current market value to another eligible buyer. Lenders know this, and price the case accordingly, but the buyer needs to understand it too.
Eligibility for the buyer. First Homes Scheme buyers must be 18+, first-time buyers, have household income under £80,000 (£90,000 in London), and intend to live in the property as their main home. The case has to fit all of those before mortgage criteria even comes into play.
Solo affordability on the loan. A £119,000 loan on a senior marketing salary is well within typical income multiples, but the lender still needs to be comfortable with the property structure on top of the income.
How Heron Financial approached the recommendation
The Heron adviser focused on lender fit first, because the eligible lender list is the choke point on First Homes Scheme cases.
Mapping the eligible lender panel. Heron Financial narrowed down to lenders genuinely comfortable with First Homes Scheme purchases, with workable criteria for the size of discount (30%+), the property type (purpose-built flat), and the local section 106 agreement.
Lender choice. Halifax was the right home for this case. They’re one of the established First Homes Scheme lenders, with clear policy on the scheme, comfortable treatment of the discounted price for LTV purposes, and competitive pricing at the 60% LTV band the case landed in.
LTV positioning. At 59.5% LTV against the discounted price, the case sat just inside the 60% LTV pricing band, typically the sharpest tier on the high street. The £21,000 of personal savings was the lever that put the case there.
Product choice. A fixed rate at 4.00% gave the client a strong high-street rate on what could easily have been a more limited product set.
The scheme-related paperwork, the eligibility approval from the local authority, the section 106 confirmation, the discounted price documentation, was handled cleanly alongside the mortgage application so nothing held up the underwriting timeline.
The outcome
The mortgage completed in December 2025. The client moved into their first home with:
A £119,000 mortgage at 59.5% LTV (against the discounted purchase price)
A fixed rate at 4.00% on capital and interest repayment
A clean First Homes Scheme purchase, with the section 106 discount preserved for the next eligible buyer
A sharp high-street rate on a scheme that some lenders won’t touch
What this means for buyers in a similar position
If you’re eligible for the First Homes Scheme, it’s one of the most genuinely useful first-time buyer routes on the market, a 30%+ discount that goes towards your deposit, not a loan, not a shared equity stake. The catch: not every lender supports it, and the section 106 restriction means you’ll need to sell at the same percentage discount when you move on. A broker who actively works with First Homes Scheme lenders can place the case cleanly and explain the long-term implications, so you go in with eyes open.
FAQs
How does the First Homes Scheme work?
The First Homes Scheme is a UK government scheme that lets eligible first-time buyers purchase qualifying new-build (and some resale) properties at a discount of at least 30% off the open market value. The discount is preserved on the property by a section 106 planning agreement, so when the buyer comes to sell, they must sell at the same percentage discount to another eligible buyer.
Who is eligible for the First Homes Scheme?
Buyers must be 18 or over, first-time buyers, intend to live in the property as their main home, and have a household income of no more than £80,000 (£90,000 in London). Local authorities can also apply local connection or key worker priority criteria. The scheme is England-only.
Do all mortgage lenders accept the First Homes Scheme?
No. A meaningful portion of the high street doesn’t lend on First Homes Scheme properties, or has restrictive criteria around the size of the discount and the property type. Lenders that do support the scheme include Halifax, among others. A broker can narrow down which lenders work for your specific case.
How is LTV calculated on a First Homes Scheme mortgage?
LTV is calculated against the discounted purchase price you’re actually paying, not the open market value. Your deposit needs to satisfy the lender’s minimum deposit requirement on the discounted price, typically 5% or 10%. The 30%+ scheme discount counts towards the equity in the property, not towards the deposit you need to put down.
What happens when I sell a First Homes Scheme property?
You must sell at the same percentage discount (at least 30%) off the open market value at the time of sale, to another eligible First Homes Scheme buyer. The section 106 agreement preserves the discount on the property in perpetuity. This means you benefit from any house price growth on the discounted price, not the full market price.
