First-Time Buyer Schemes in the UK
Help to Buy Equity Loan ended in March 2023, but several other government-backed schemes remain that can help first-time buyers. Some save you money on deposit; others save you on mortgage rates; others make ownership affordable at a lower share.
This guide covers every active scheme in 2026: Lifetime ISA, First Homes, Shared Ownership, Right to Buy, the Mortgage Guarantee Scheme, and the Armed Forces scheme — who qualifies, how to use them, and which combinations work together.
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Lifetime ISA (LISA)
A government-boosted savings account specifically for first-time buyers or retirement.
How it works
- Anyone aged 18-39 can open a LISA
- Save up to £4,000 per tax year
- Government adds 25% on top — up to £1,000 per year free money
- Continue saving and receiving the bonus until age 50
- Use toward a first home up to £450,000, or keep for retirement (accessible from 60)
Key rules
- Property price cap — £450,000 (this hasn't moved since launch in 2017, which increasingly constrains it in London/South East)
- Must be a first-time buyer — never previously owned a UK or foreign property
- Must be buying with a mortgage — not cash
- Account must be open 12+ months before you can use the funds for a home
- 25% withdrawal penalty if you use the money for anything other than a first home or retirement
Worked example
- Save £4,000 per year for 5 years = £20,000
- Government adds £5,000 over those 5 years = £25,000 total
- That's a £5,000 genuine bonus toward your deposit, tax-free
Couples can both have LISAs — £10,000 per year combined contributions, £2,500 per year combined bonus.
When a LISA might not suit
- You expect to buy a property over £450,000 (the withdrawal penalty eats more than the bonus)
- You need access to the savings before 60 for non-housing reasons
- You're likely to buy within 12 months of opening (too soon)
- You're 40+ (can't open a new one)
LISA + a gifted deposit + a standard mortgage
These stack. Your LISA bonus goes into your deposit, parents' gift supplements it, and you take a standard FTB mortgage. No scheme conflicts.
First Homes Scheme
A discount on new-build properties specifically for first-time buyers, administered by local councils.
How it works
- New-build properties sold at a 30–50% discount to open-market price
- The discount stays with the property forever — when you sell, the next buyer also gets the discount from the new price
- Helps first-time buyers get onto the ladder at below-market prices
- Priority often given to local buyers, key workers, or those with local family ties
Key rules
- Property must be on a participating development
- Household income must be below £80,000 (or £90,000 in London)
- Must be a first-time buyer
- Property price after discount capped at £250,000 (£420,000 in London)
- Mortgage must cover at least 50% of the discounted price
Worked example
- Market-value new build: £400,000
- First Homes discount: 30% = £120,000 off
- You pay: £280,000
- You own 100% of the property
- When you sell, next buyer gets 30% off the future market value (so the discount is locked in forever)
Where to find First Homes properties
- Your local council's planning department (each council has a First Homes allocation)
- Developers marketing schemes in participating areas
- Government portal at gov.uk (search "First Homes")
When First Homes might not suit
- You're looking outside new-build developments
- Your preferred area has no active First Homes allocation
- You're above the £80k income cap
- You want flexibility on resale (you'll have a harder time selling at full market rate)
Shared Ownership
Buy a share of a property (typically 25-75%) and pay rent on the portion you don't own.
How it works
- Purchase 25-75% share of a property from a housing association
- Pay a mortgage on the share you own
- Pay rent on the share you don't own (typically 2.75% of the unowned value per year)
- Over time, buy more shares (called "staircasing") until you own 100% or a cap of 80% on some schemes
Key rules
- Household income typically capped at £80,000 (£90,000 in London)
- First-time buyer or can't afford to buy on open market
- Available on new-builds and some resale shared ownership properties
- Typically 2-5% deposit on the share you're buying (not the full property)
The deposit benefit for lower-deposit buyers
Because you're only buying a share, your deposit goes further as a percentage of that share. Detailed in our new build guide →, but the headline:
- £15,000 deposit on a £300,000 property = 5% deposit (95% LTV)
- £15,000 deposit on a 40% share (£120,000) = 12.5% deposit (87.5% LTV) — better rates
Downsides
- You don't own the whole property
- Ongoing rent on the unowned share (plus service charges on leasehold flats)
- Staircasing requires a new valuation and legal work each time
- Selling can be slower — housing association usually has first right to sell
When Shared Ownership suits
- Deposit is the constraint, not income
- You're comfortable with the rent-plus-mortgage structure
- You want to get onto the ladder in an expensive area where full ownership is unaffordable
- You intend to staircase to 100% over time
Right to Buy (RTB)
Long-term council tenants can buy their home at a discount.
How it works
- Council tenants of 3+ years can apply
- Discount ranges from 35-70% of market value depending on length of tenancy, up to a regional maximum
- Maximum discount: £87,200 outside London, £116,200 in London (2026 figures — check current caps)
- You take a mortgage for the discounted price
Key rules
- Must be a secure council tenant for 3+ years (5 years for max discount)
- Discount scales with years of tenancy
- If you sell within 5 years, some of the discount must be repaid
- Housing associations may offer Preserved Right to Buy to tenants who were previously council
Worked example
- Council property value: £200,000
- 10 years' tenancy → 35% discount = £70,000 off
- You pay: £130,000
- Mortgage on £130,000, not £200,000 — much easier to qualify
When RTB is a strong option
- You've been in council housing 3+ years and plan to stay in the property long-term
- Market rates are stable or rising (the discount locks in immediate equity)
- You can afford a small mortgage
Watchouts
- RTB properties often need modernisation
- Some councils restrict onward sale or include covenants
- Leasehold RTB flats may have management charges that eat into savings
Mortgage Guarantee Scheme
A government-backed scheme that lets lenders offer 95% LTV mortgages with reduced risk.
How it works
- First-time buyers and movers can get a mortgage with just a 5% deposit
- The government guarantees part of the mortgage for the lender
- Lenders participating offer standard 95% LTV products under the scheme
Key rules
- Up to 95% LTV
- Property value up to £600,000
- For residential purchases only (not BTL or second homes)
- Available on main residence only
- Repayment mortgage only (no interest-only)
Which lenders participate?
Major lenders including Halifax, Lloyds, Nationwide, NatWest, Santander, Barclays, HSBC, and Virgin Money. Each offers their own 95% LTV products under the guarantee scheme.
Is this scheme useful?
It's more of a market-stability tool than a discount. The scheme doesn't give you cheaper rates directly — it encourages lenders to offer 95% LTV products in conditions when they might otherwise pull them. In normal markets, many lenders offer 95% LTV products without the scheme.
Armed Forces Help to Buy
Not to be confused with the general Help to Buy equity loan (ended 2023). This is for serving armed forces personnel.
How it works
- Interest-free loan of up to 50% of salary, capped at £25,000
- Use toward a deposit on a first or second home (unusually, second home is permitted for relocating personnel)
- Repaid from salary over 10 years
Who qualifies
- Serving armed forces personnel who've completed the necessary qualifying service period
- Available to assist with home purchases linked to posting moves
Stacking with other schemes
Compatible with LISA, First Homes, Shared Ownership, and the Mortgage Guarantee Scheme. Can be a powerful boost for service personnel combined with a LISA.
Stacking Schemes — What Works Together
Common combinations
LISA + Standard mortgage — straightforward, widely used. LISA bonus goes into deposit.
LISA + First Homes — yes, these stack. Use LISA savings (with bonus) toward deposit on a First Homes property. Provided property price after discount is under the LISA £450k cap.
LISA + Shared Ownership — yes. Use LISA bonus for the deposit on the share you're buying. Shared ownership properties typically cheaper than £450k cap.
LISA + Armed Forces Help to Buy — yes. Combine the LISA bonus with the AFHTB loan for a larger deposit.
First Homes + Shared Ownership — usually not simultaneously on the same property. Different schemes, different developers typically.
Mortgage Guarantee Scheme + LISA — yes. The guarantee scheme just enables the 95% LTV product; LISA funds the 5% deposit.
What doesn't work
- You can only use LISA for one property purchase
- First Homes properties are specifically new-build; you can't use the discount on a resale
- Shared Ownership shares have their own resale restrictions
Which Scheme Is Right for You?
If you're under 40 and saving toward a first home: open a LISA immediately, even with just £100 to start the 12-month clock. Free 25% on savings is the single best deal in UK personal finance.
If you're looking at new-builds and income is under £80k: check whether your local council has First Homes allocations. 30% discount locked in forever is a big deal.
If property prices in your area are out of reach: Shared Ownership lets you get onto the ladder at a fraction of full purchase cost. Review the rent structure carefully before committing.
If you're a long-term council tenant: Right to Buy is usually the biggest savings opportunity. Apply when you've hit 3 years' tenancy.
If you have only a 5% deposit: 95% LTV products are widely available (including via the Mortgage Guarantee Scheme). Focus on rate and lender flexibility rather than the scheme itself.
If you're armed forces: combine AFHTB with a LISA for maximum boost.
Frequently Asked Questions
Is Help to Buy still available?
The Help to Buy Equity Loan scheme in England ended on 31 March 2023 and isn't available for new purchases. The name "Help to Buy" still applies to a Lifetime ISA variant and the Armed Forces scheme, but the main equity loan is closed. First Homes and Shared Ownership have largely replaced it as the main FTB discount routes.
Can I use a Lifetime ISA on a £500,000 property?
No. The LISA property price cap is £450,000 and hasn't increased since 2017. If the property price is above £450,000, you can still buy it but you'd have to withdraw LISA funds outside the scheme, which triggers the 25% withdrawal penalty — wiping out the government bonus.
What's the difference between First Homes and Shared Ownership?
First Homes: you buy 100% of a new-build at a 30-50% discount to market value. The discount stays with the property forever. Shared Ownership: you buy a percentage share (25-75%), pay a mortgage on your share, and pay rent on the unowned portion.
Can two people both use their LISA on the same purchase?
Yes. Both can use their LISA toward the same first home, both receive the government bonus, and both continue to qualify as first-time buyers. Combined, two LISAs can add £2,000/year of government bonus toward a joint purchase.
Does Shared Ownership save money long-term?
It depends. In the short term, yes — lower deposit and lower mortgage. In the long term, you pay rent on the unowned share AND mortgage on the owned share, which in rising markets can exceed what a full mortgage would have cost. Staircasing closes that gap over time but involves legal and valuation costs each time.
Can I get a mortgage on a Shared Ownership property?
Yes. Most major UK lenders (Halifax, Nationwide, Santander, Barclays, Leeds BS, Skipton BS, Lloyds) offer Shared Ownership mortgages. Deposit requirements are typically 5-10% of the share you're buying, not of the full property value.
Is Right to Buy being phased out?
No, Right to Buy still operates in England. Scotland abolished its version. Some English councils have restricted aspects (discount caps, onward sale restrictions), but the scheme remains available for qualifying council tenants.
What's the Mortgage Guarantee Scheme?
A government guarantee that allows lenders to offer 95% LTV mortgages with reduced risk to themselves. It doesn't give you cheaper rates directly — it encourages lenders to offer 95% LTV products. In strong markets, many 95% LTV products exist outside the scheme anyway.
Related Guides
- The Full Buying Journey →
- Getting Mortgage Ready →
- First-Time Buyer Affordability →
- How Deposit Size Affects Borrowing →
- Gifted Deposits Complete Guide →
Written by a CeMAP qualified mortgage advisor
Last updated: April 2026
