Selling a First Homes Property: The 2026 UK Seller's Guide

By Lisa Hayes · 11 September 2026

You can sell a First Homes property, but you are not selling it the way you would sell any other house. The discount you bought at is locked to the property in perpetuity by a Section 106 agreement, so you must sell at the same percentage discount, to a buyer the council certifies as eligible, and — in most agreements — to someone funding at least half the price with a mortgage. That last rule is the one nobody warns you about, because it quietly rules out every cash buyer in the country.

This guide walks through what your Section 106 actually obliges you to do, the six-month escape route if no eligible buyer turns up, and the 30% payment the council can take if you use it. It is written for the person who bought a First Home in 2022 or 2023 and now needs to move.

What is a First Home, and how is it different from shared ownership?

A First Home is a new-build house or flat sold to a first-time buyer at a discount of at least 30% off its open market value, with that discount secured forever by a planning agreement under Section 106 of the Town and Country Planning Act 1990. You own 100% of it. There is no rent, no landlord, no staircasing.

That is the crucial difference from shared ownership, where you own a slice and pay rent on the rest, and from the Help to Buy equity loan, where the government owns a stake it wants repaid. With a First Home, nobody has a share and nobody is owed money. What exists instead is a covenant that follows the bricks: this property must always be sold cheap, to someone who needs it cheap.

People muddle these three schemes constantly, including some estate agents. If an agent tells you they will "sort the staircasing" on your First Home, find another agent.

How do I know for certain that my home is a First Home?

Pull your title register from HM Land Registry. A First Home carries a restriction entered under Rule 91 of the Land Registration Rules 2003, and the wording in the national template is blunt:

No disposition of the registered estate (other than a charge) by the proprietor of the registered estate … is to be registered without a certificate signed by [the council] … that the provisions of clause XX (the First Homes provision) of the Transfer … have been complied with or that they do not apply to the disposition.

In plain terms: the Land Registry will refuse to register your buyer as the new owner until the council signs a piece of paper. Your solicitor cannot argue around it and your buyer's lender will not complete without it.

Three other places to look:

• Your TR1 or transfer deed. The First Homes provisions are usually annexed to it in full. That annexure is the document that governs your sale — not the council's website summary, not this article.
• The Section 106 agreement itself. Ask the council's planning department for a copy, or search its planning portal against the site reference. It is public.
• Your original reservation paperwork. Developers were required to spell out the discount percentage. Find the figure, because the percentage — not the pounds — is what you must replicate.

If you are still unsure after all that, treat it as restricted and take advice. Discovering the restriction three weeks before an intended exchange is a far more expensive way to find out.

What are the three rules I have to satisfy to sell?

Almost every First Homes Section 106 in England is a local adaptation of the model provisions published by government on 14 December 2021. That model imposes three conditions on every sale — the developer's first sale and every resale after it.

Get all three right and the council issues a Compliance Certificate. The model gives it 28 days from receiving sufficient evidence. In reality, some housing teams are quick and some are one part-time officer with a backlog, so build the delay into your chain expectations rather than your optimism.

Why can't I sell my First Home to a cash buyer?

This catches people out badly, and it is worth being direct about why. If your circumstances change — a job move, a separation, a baby, a bad month — the instinct is to look for speed. You search for a quick house sale, you find a cash house buyer offering to complete in 14 days, and on any ordinary property that would be a real option with a real trade-off. On a First Home it is not an option at all. The restriction on your title makes it unregistrable.

Some quick-sale companies will still make you an offer, because the person doing the buying does not read Section 106 schedules. You will lose four to six weeks finding that out. Say the words "First Homes Section 106 with a title restriction" on the first call and see whether they know what you mean.

The honest position is this: a First Home is one of the hardest properties in Britain to sell in a hurry. Not impossible — but the route to speed is not a cash buyer. It is a well-priced, well-marketed sale to an eligible buyer with a mortgage in principle already in hand, plus a council housing team you have contacted before you list.

How much can I actually sell it for?

You sell at the same percentage discount you received, applied to today's open market value. The pound figure moves with the market; the percentage never does.

Take a home with an open market value of £200,000 at the time you bought, sold to you at a 30% discount for £140,000. Four years on, a RICS valuer puts open market value at £230,000.

You keep the growth on the discounted value, which is 70% of the growth on the full value. That is the bargain: cheaper entry, proportionally smaller gain. Nobody claws back the original discount as long as you sell it on as a First Home.

Two things sellers regularly get wrong here. First, the price caps — £250,000, or £420,000 in London — bite only on the first sale from the developer. They do not cap your resale. If the discounted figure now comes out at £268,000, that is your price. Second, your valuer must be a RICS Registered Valuer acting independently, not the estate agent who wants the instruction. An agent's appraisal will not satisfy the council, and an optimistic one wastes months. If you want a sense of the number before you commission the formal valuation, start with a rough view of what your house is worth and then take 30% off.

Who is allowed to buy it?

Your buyer must meet the national eligibility criteria: a first-time buyer, with gross household income no higher than £80,000 (£90,000 inside a London borough). On a joint purchase, every purchaser must be a first-time buyer and the incomes are added together.

Many councils layer local criteria on top — a local connection by residence or close family, key worker status, armed forces service, sometimes a lower local income cap. Those local criteria are the ones that shrink your buyer pool to a village.

Here is the relief valve, and it is genuinely useful: under the model agreement, once a First Home has been actively marketed for three months without finding a willing purchaser who meets the local criteria, the local criteria fall away. National criteria only from then on. The clock only runs on real marketing, so keep the portal listing live, keep the agent's records, and keep dated evidence of every enquiry. You will be asked for it.

• 30%minimum discount, fixed for life
• 3 monthsuntil local criteria drop away
• 6 monthsbefore you can ask to be released
• 28 daysfor the council to respond

What if no eligible buyer comes forward at all?

The model agreement has an exit, and it is worth understanding properly before you need it.

1. Market it for six months. Actively, with all reasonable endeavours, as a First Home at the correct discounted price. Weak marketing is the most common reason applications fail — a listing at the wrong price is not evidence that no eligible buyer exists, it is evidence that you priced it wrong.
2. Apply in writing to the council for permission to sell other than as a First Home.
3. The council may buy it itself at the discounted price. It has the right, though not the obligation. Many authorities have no budget to exercise it.
4. If satisfied, the council confirms within 28 days that you may sell on the open market, and the First Homes obligations stop binding the property.
5. If not satisfied, it must tell you within 28 days what further steps it wants and set a timescale of no more than six months. Do those steps, still fail to sell, reapply — and this time the council must confirm within 28 days.

So the worst realistic case is roughly six months of marketing, a refusal, up to another six months of prescribed steps, and then release. Slow, but bounded. Note the second application is not discretionary in the model: the council must issue the confirmation.

The catch: the Additional First Homes Contribution

Selling on the open market does not hand you the discount. Where a First Home is released and sold unrestricted, you must pay the council what the model calls the Additional First Homes Contribution — the lower of:

• 30% of the proceeds of sale (adjusted upwards where you bought at a deeper discount); or
• the proceeds of sale minus everything outstanding to your lender — principal, interest and reasonable costs.

In each case it is calculated after deducting any Stamp Duty Land Tax you owe as a result of the disposal. The council applies the money to other affordable housing, and only on receipt does it complete the application to remove the restriction from your title.

That second limb matters more than it looks. If you sell at £230,000 with £195,000 outstanding on the mortgage, the two figures are £69,000 and £35,000 — and you pay the lower, £35,000. The contribution cannot push you into a shortfall you have to fund from savings. If there is nothing left after redeeming the mortgage, there is nothing to pay. That is a deliberately humane piece of drafting and very few people know it is there.

What if I'm in negative equity or facing repossession?

The mortgagee exclusion in paragraph 8 of the model is the safety net that makes First Homes lendable in the first place. If your lender repossesses, it gives the council written notice and is then free to sell the property at full open market value, free of the discount. Any surplus above the debt goes to the council as the Additional Contribution, and the council issues the paperwork to clear the restriction for the new owner.

Practically: the restriction does not trap your lender, so it should not be the thing that stops you refinancing. But do not use repossession as a sale strategy. You lose control of the price, you carry the arrears and costs, and the credit damage outlasts the move. If arrears are building, read our guides on selling in negative equity and selling after a possession order, and speak to your lender before you speak to anyone else. The hardship route below is almost always the better door.

Can I use the undue hardship route instead of waiting six months?

Yes — and it is under-used. The model lets you apply to sell unrestricted on the alternative ground that requiring six months of active marketing first would be likely to cause you undue hardship. There is no statutory definition, which cuts both ways: no tick-box to fail, but no entitlement either.

What tends to persuade a housing team is documented, time-critical hardship rather than inconvenience. Serious illness or a care need. A relationship breakdown with a court timetable. Redundancy with mortgage arrears already accruing. A job relocation with a fixed start date and a tenancy you cannot afford alongside the mortgage.

Apply in writing, be specific, attach evidence, and ask the housing officer what their committee or delegated decision process needs. Councils answer reasoned applications far better than angry ones, and the same 28-day response period applies. Remember the contribution is still payable if you are released this way.

Can I rent it out rather than sell?

To a limited extent. A First Home must be your main residence, and the model permits letting only within tight bounds:

• Up to two years in total across your whole period of ownership, on a fixed term of no more than two years, with written notice to the council before the tenant moves in.
• Longer, with the council's written consent — and consent must not be unreasonably withheld. The model expressly bars refusal where you must live elsewhere for work, where you are an active armed services member being deployed, where you need to move to escape a risk of harm, after a relationship breakdown, after redundancy, or where you need to live elsewhere to care for someone.
• A lodger is fine, as is letting the property as temporary sleeping accommodation, provided it genuinely remains your main residence.

Any letting must be by written lease of the whole property, expressly prohibiting further sub-letting. Do not quietly let a First Home and hope nobody checks. The council holds a registered restriction and a covenant that binds you personally, and an unauthorised letting discovered mid-sale is a very awkward conversation to have with a buyer's solicitor.

What happens on death, divorce or bankruptcy?

Certain transfers are carved out of the restriction entirely. Under the model these exempt disposals are:

• a transfer to your spouse or civil partner on your death;
• a transfer to a named beneficiary under your will, or under the rules of intestacy;
• a transfer to a former spouse or civil partner under a court order, divorce settlement or similar order on divorce, annulment, dissolution, nullity, separation or presumption of death;
• a transfer to a trustee in bankruptcy — though the eventual sale by the trustee is still caught by the release-and-contribution machinery.

In the first three cases the person receiving the property takes it on the same terms and must comply with the occupation rules. So a divorce transfer works, but the remaining owner inherits the restriction along with the house. If you are untangling a property in a separation, our guide to selling a house during divorce covers the wider mechanics; the First Homes layer sits on top of it.

How long does selling a First Home realistically take?

Longer than a normal sale, and the delay is front-loaded. A sensible planning assumption:

• Week 1–2: pull the title, read the Section 106 schedule, email the council's housing team to ask for their First Homes resale procedure and their current eligibility criteria.
• Week 2–4: commission a RICS Registered Valuer, get the open market value, apply the discount.
• Month 1–3: marketing under local criteria, if your agreement has them.
• Month 4–6: marketing under national criteria only. Realistically your best window.
• Offer to certificate: allow four to eight weeks for the buyer to produce a mortgage offer and income evidence and for the council to issue the Compliance Certificate.

Two practical levers make a real difference. Instruct an agent who has sold a First Home before and can prove it — ask for the address, not the anecdote. And instruct a conveyancer comfortable with Section 106 restrictions, because a solicitor meeting one for the first time will cost you weeks in correspondence. Our guide on choosing an estate agent is worth ten minutes before you sign anything, and the wider Section 106 seller's guide covers the restrictions that apply to other affordable tenures.

What about mortgage availability for my buyer?

Fewer lenders will touch a First Home than a standard property, because the resale restriction limits what they can recover. Leeds Building Society runs a dedicated First Homes and discounted market sale range, and the larger banks have offered products at various points. Lender appetite moves around, so the useful instruction to your agent is simple: qualify every enquiry by asking whether the buyer has spoken to a broker about a Section 106 discounted market sale specifically.

Typical loan-to-values run up to 95% of the discounted price, so the deposit hurdle for your buyer is low — which is precisely the point of the scheme. The hurdle is the lender panel, not the affordability.

One more thing to head off: your buyer's lender will want the Section 106 drafting to match what it recognises. Where a council has adapted the model heavily, that can cause a wobble. Get a copy of the agreement to the buyer's solicitor on day one rather than day thirty.

Does the 2024 planning change affect my property?

No, and it is worth saying plainly because it comes up. The National Planning Policy Framework published on 12 December 2024 removed the requirement for a minimum of 25% of affordable housing to be delivered as First Homes. Councils may still require them where they judge there is local need, but the national mandate has gone, so fewer new First Homes are being built.

Your covenant is unaffected. It sits in a Section 106 agreement that binds the land in perpetuity, and a change in national planning policy does not release it. If anything, a shrinking pipeline of new First Homes slightly helps you: there is less brand-new competition on the same estate, and demand from eligible first-time buyers has not gone anywhere.

You may also see references to Homes England's Section 106 Affordable Housing Clearing Service, which launched in December 2024 and was extended to cover London in January 2026. Useful if you are a housebuilder or a registered provider. It is not a service individual owners can register for, so do not spend an afternoon trying.

Mistakes that cost First Homes sellers money

After the legal machinery, this is where most of the real damage happens.

• Listing at full market value "to see what happens". It voids your marketing evidence, because you have not marketed it as a First Home. Six wasted months.
• Using the agent's appraisal as the valuation. The council wants an independent RICS Registered Valuer. Anything else gets sent back.
• Accepting an offer from a cash buyer. It cannot complete. Check funding before you agree terms, not after.
• Not telling the council you exist until you have a buyer. The housing team controls your timetable. Introduce yourself early and ask for their procedure in writing.
• Assuming the £250,000 cap applies to you. It does not on a resale, and underpricing by tens of thousands is a self-inflicted wound.
• Letting it out without notifying the council. A breach of covenant discovered during conveyancing can stall or kill a sale.
• Treating the six-month release as a shortcut. It is the slow door, and it costs 30% of the proceeds. Selling to an eligible buyer at the discount is nearly always the better outcome.

So is it worth it?

For the right buyer, yes — you got into a home with a deposit you could actually save, and you keep a real, growing share of the market. The cost shows up at the exit, in flexibility rather than in pounds. A First Home is an excellent first home and a poor emergency exit, and that is the trade most people accept without ever seeing it written down.

If you are selling now, the practical advice is short. Read your Section 106 schedule this week. Email the council's housing team this week. Commission a proper valuation before you instruct an agent, not after. And be sceptical of anyone who promises speed on a property the Land Registry will not transfer without a council signature.

What to do next

If your home is restricted, your route is a properly priced sale to an eligible buyer, and your job is to make that as fast and as evidenced as possible. If it turns out your property is not a First Home — plenty of people assume a new-build discount means a restriction when it does not — then the whole market is open to you, including the quick-sale route, and it is worth seeing what the options actually pay before you commit to a four-month estate agency contract.

Either way, start with a clear number. Compare offers and valuations here, take your time over the paperwork, and do not let anyone rush you into a sale that cannot legally complete.