If you've been searching for the Starter Homes scheme, here's the short answer: it never launched. It was announced in 2015, promised homes at 20% below market value for buyers under 40, and was written into law in 2016 — but the rules needed to make it work were never brought into force, and no one was ever able to buy one. GOV.UK no longer lists it among the government's home ownership schemes.
That is frustrating if you have been reading about it elsewhere, because plenty of websites still describe it as though you can apply. You cannot.
The good news is that the thing Starter Homes was meant to do — get first-time buyers into a home at below market value — is being done by schemes that do exist. This guide explains what is actually available to you now.
First Homes is the closest thing to what Starter Homes was meant to be, and it goes further: the discount is at least 30%, not 20%, and it is permanent. When you sell, you pass the same percentage discount on to the next buyer, so the home stays affordable rather than the subsidy disappearing after one sale.
Developers sell designated new-build homes to first-time buyers with at least 30% taken off the market value. Every home is valued by an independent RICS surveyor, so the discount comes off a real valuation rather than the developer’s asking price.
Take a home with a market value of £300,000. A 30% discount takes £90,000 off, and you pay £210,000. You own 100% of the property, and unlike Shared Ownership there is no rent to pay on the part you did not pay for. The discount is not a loan either — there is nothing to repay while you live there, and no interest building up.
The home can be a new build from a developer, or a First Home someone else is reselling.
Local rules matter, and they are where Sheffield buyers should pay attention. Councils can set their own criteria for the first three months a property is on sale — commonly prioritising key workers, people who already live in the area, or those on lower incomes. If you qualify locally, that three-month window is your advantage. After it closes, the property opens up to any eligible buyer.
There are exemptions for members of the armed forces, veterans who left in the last five years, and the bereaved or divorced spouses and civil partners of service personnel — they do not need to meet key worker or local residency criteria.
This is the part that is easy to miss, and it is genuinely useful: the discount comes off the price, but the property is still worth its full market value. That makes your deposit work considerably harder.
Say the market value is £250,000 and you get a 30% discount — £75,000 off, so you buy at £175,000. A 10% deposit on that purchase price is £17,500, leaving a mortgage of £157,500. That is 90% of what you paid, but only around 63% of what the home is actually worth.
Lenders do not all treat First Homes the same way, and the terms you are offered depend on how the lender views that gap between price and value. It is worth asking before you reserve a plot rather than after.
You can usually only sell to someone else who is eligible to buy a First Home, and you must give them the same percentage discount you received, based on the market value at the time you sell. A RICS surveyor values the property, the discount comes off that figure, and that is your ceiling — you can sell for less, but not for more.
If your 30%-discounted home is valued at £300,000 when you sell, you can sell for up to £210,000. If the market has fallen and it is valued at £200,000, you can sell for up to £140,000. The percentage is fixed, so you take the same share of a rise or a fall as any other owner — what you do not get is the discount itself as profit.
If you genuinely cannot sell it as a First Home, there is a release valve. After six months of trying without success — or if selling as a First Home would cause you severe difficulty, such as bankruptcy — you can ask the council for permission to sell on the open market. The council can agree, offer to buy the home itself at the discounted price, or ask you to keep trying for a further six months, after which it must let you sell openly. If it does agree to an open-market sale, you return the same percentage of the sale price to the council: sell for £300,000 having had a 30% discount, and £90,000 goes back.
Letting is restricted as well. You can normally let the whole property for no more than two years in total while you own it, and you need to tell the council and check with your lender first. Renting out a room is fine for as long as you like, provided the home is still your main residence and you live there too.
Not the taxpayer, which surprises most people. First Homes are delivered by developers, as part of the planning obligations attached to new sites — the same mechanism that delivers affordable rented homes. That is why they appear on particular developments rather than across the market generally, and why what is available to you depends heavily on what is being built near you.
The discount stays with the property, not with you. You get in at well below market value, but you never own that 30% and you will not keep it when you sell. In a rising market over a long period, that is a real cost compared with buying on the open market. Set against it is the fact that without the discount, many buyers would not get in at all. There are the practical restrictions too: a smaller pool of buyers when you sell, limits on letting, and the council involved in the process.
Whether that trade is worth making depends on your deposit, what you could borrow without the scheme, and how long you expect to stay. It is a conversation worth having before you reserve a plot.
On 26 September 2026 the government announced Your First Home, an equity loan scheme for England to be confirmed at the Budget on 28 October 2026. On what has been announced so far, it is expected to support:
There will be a household income cap and local property price caps, and the detail comes at the Budget. If you are saving now and buying next year, this is worth knowing about before you commit to anything — the difference between a 2.5% deposit and a 5% deposit is months or years of saving.
We will update this page when the Budget sets out the detail. If you want to talk it through before then, we are happy to, and we will tell you plainly what is confirmed and what is still an announcement. Our full guide to the Your First Home scheme sets out what has been announced and what has not.
Plenty of people searching for “starter homes” are not looking for a government scheme at all — they mean a first home they can actually afford. In Sheffield that is a real conversation, and the answer depends far more on what you can borrow and what deposit you have than on any scheme.
Our borrowing calculator gives you a rough figure in a couple of minutes. An adviser will give you an accurate one, including which of the schemes above you qualify for. Our first-time buyer page walks through the whole process.
We are an independent, whole-of-market mortgage broker at Beehive Works in Sheffield, authorised and regulated by the Financial Conduct Authority (FRN 650114). First-time buyers are a large part of what we do, and you can read more about our Sheffield mortgage advice.
We will tell you honestly which schemes you qualify for and which are not worth your time, work out what you can realistically borrow, and put your application to the lender most likely to accept it. Your initial consultations and discussions are free, and our fees are set out in full before you commit to anything.
Call 0114 303 1031, email info@friendscapital.co.uk, or get in touch through the website.
