First-time buyer schemes UK

Quick answer

Five UK first-time buyer schemes are active in 2026: Lifetime ISA, Mortgage Guarantee Scheme (5% deposit), Shared Ownership, First Homes, and Right to Buy (council tenants only).

Help to Buy equity loans closed to new English applications in October 2022 but the Welsh equivalent continues until at least March 2026.

Most under-40 first-time buyers should at minimum set up a Lifetime ISA.Beyond that, the right scheme depends on your income, target area, timeline, and whether you’re looking at new-builds or existing stock. The decision matrix below maps common buyer profiles to the schemes most likely to help.

UK first-time buyer schemes — scheme by scheme

Each scheme’s eligibility, benefit, drawback, current status, and the buyer profile it fits.

• Lifetime ISA (LISA)

  Eligibility

  UK first-time buyers aged 18-39 at opening. Used toward homes up to £450,000. Can be combined with most other schemes.

  Status

  Active — open to new applications

  Benefit

  25% government bonus on contributions up to £4,000/year — up to £1,000 free per tax year. Lifetime max bonus around £33,000.

  Drawback

  Money locked in for first-home or after age 60. 25% withdrawal penalty for anything else (worse than it sounds — costs ~6.25% of your own capital).

  Best for

  Almost every UK first-time buyer under 40. The single highest-return move available unless you've already hit retirement income limits.

• Mortgage Guarantee Scheme (5% deposit)

  Eligibility

  First-time buyers (and home movers) buying their main residence. Property must be £600,000 or less. Standard income / credit / affordability checks apply.

  Status

  Active — extended in March 2025 until at least June 2025; government has signalled further extension

  Benefit

  Lets you buy with just a 5% deposit — government partially guarantees the lender's loss, so they're more willing to offer 95% LTV products.

  Drawback

  Rates at 95% LTV are typically 0.5–1.0% higher than at 75-90% LTV. Not all lenders participate. Doesn't reduce the property price — just lets you buy with less upfront cash.

  Best for

  Buyers ready now whose timeline can't wait for a 10%+ deposit, particularly in lower-priced regions where rate impact is smaller.

• Shared Ownership

  Eligibility

  Household income under £80,000 (£90,000 in London). Property bought from a housing association. Some local authorities prioritise residents or key workers.

  Status

  Active — ongoing scheme

  Benefit

  Buy a 10-75% share (often 25-50%) of a property and pay rent on the rest. Lower deposit and lower monthly mortgage payment than full ownership for the same property.

  Drawback

  Service charges, ground rent (sometimes), the cost and complexity of buying additional shares ("staircasing"), and resale restrictions. Total housing cost (mortgage + rent) often only slightly cheaper than renting outright in expensive areas.

  Best for

  Buyers in expensive areas (especially London / SE) who otherwise wouldn't get onto the ladder. Less compelling in lower-priced regions where outright ownership is achievable.

• First Homes

  Eligibility

  First-time buyers (and key workers in some areas) aged 18+. Household income under £80,000 (£90,000 in London). Property must be a designated First Homes new-build.

  Status

  Active but limited stock

  Benefit

  30-50% discount off the market price of qualifying new-build homes. Discount stays with the property at resale, benefiting future buyers too.

  Drawback

  Limited stock — only available in specific developments. Resale restrictions: you can only sell to another first-time buyer who also meets the income cap, and the discount must be passed on.

  Best for

  Buyers in areas where new-build supply matches the scheme AND who are happy with the resale restrictions. Worth checking your local council's First Homes register.

• Right to Buy

  Eligibility

  Council or some housing association tenants who've been a tenant for at least 3 years. Some HAs have voluntary Right to Buy through Right to Acquire instead.

  Status

  Active — but discounts reduced significantly in 2024-2025

  Benefit

  Discount of up to 70% (capped in cash terms — current cap varies by region, typically £16,000-£87,000) off the market value of your current rental home.

  Drawback

  Only available to existing council/HA tenants. The discount cap has been reduced significantly since 2024 in some regions, narrowing the benefit. Repayment of the discount required if you sell within 5 years.

  Best for

  Long-term council tenants in stable areas who plan to keep the home long-term. Less attractive than it was 2-3 years ago.

• Help to Buy equity loan (England)

  Eligibility

  N/A — closed to new applications in October 2022.

  Status

  CLOSED — no new applications. Existing loans continue under their terms.

  Benefit

  N/A historically — was a government equity loan (typically 20%) repayable after 5 interest-free years.

  Drawback

  Many buyers who took the loan are now hitting the interest-payable phase, with rising rates. Some Help to Buy homes also struggle on resale due to inflated new-build pricing at purchase time.

  Best for

  Not available to new buyers. If you have an existing HtB loan and are nearing the interest-payable phase, get specialist mortgage advice about your options.

• Help to Buy Wales

  Eligibility

  First-time buyers and home movers in Wales. Property must be a qualifying new-build under £300,000.

  Status

  Active in Wales until March 2026 (subject to review)

  Benefit

  Government equity loan of up to 20% of the property price. Interest-free for first 5 years.

  Drawback

  Same long-term drawbacks as the English scheme — interest kicks in from year 6 and the loan amount tracks property price (you repay 20% of the SOLD value, not the original loan amount). Limited to qualifying new-builds.

  Best for

  Welsh first-time buyers with limited deposit who are happy to buy a qualifying new-build and have a strategy for repaying or refinancing the loan before interest kicks in.

Combining schemes — what actually stacks

Most UK first-time buyer schemes can be combined. Four common combinations that work well.

• LISA + Mortgage Guarantee Scheme

  Most common combination. Use LISA savings (plus bonus) toward the 5% deposit, then buy via a 95% LTV product backed by the Mortgage Guarantee Scheme. Lets you save quickly and buy with minimum cash.

• LISA + Shared Ownership

  LISA bonus can be used toward the deposit on a Shared Ownership purchase. Lower property cost (only paying for your share) means LISA savings go further.

• LISA + First Homes

  First Homes properties are typically below the £450K LISA cap, making the combo viable. The 30-50% First Homes discount plus LISA's 25% bonus on deposit savings is a powerful combination where both schemes are available.

• Gifted deposit + LISA

  Family gifts the bulk of the deposit; you use the LISA bonus to top it up or cover stamp duty + buying costs. Most lenders accept this combination without issue.

Which scheme suits which buyer?

Six common buyer profiles and the scheme most likely to help. Use as a starting point, then verify against your specific situation.

Worked examples

Three illustrative scenarios showing how schemes work in practice for different UK first-time buyers.

• Profile

  Single buyer, £35K income, £8K saved, 3 years from buying

  Plan

  LISA — maximum bonus collection. Open a Cash LISA. Contribute £4K/year for 3 years = £12K saved + £3K bonus + ~£900 interest = ~£15.9K. Combined with £8K existing savings, you've got ~£24K — enough for a 10% deposit on a £240K home in most UK regions outside London.

• Profile

  Joint buyers, £55K combined, £6K saved, want to buy this year

  Plan

  5% deposit Mortgage Guarantee Scheme + small LISA buffer. Buy this year via a 95% LTV product. £6K covers stamp duty + buying costs. Borrowing capacity at 4.5x = £247K mortgage. Property around £260K accessible with 5% deposit (~£13K — savings + a few months of LISA contributions).

• Profile

  London buyer, £45K income, £15K saved

  Plan

  Shared Ownership + LISA. Buy a 40% share of a £400K London property (£160K share, £16K deposit, £144K mortgage). Pay rent on the remaining 60%. Total monthly cost typically £1,800-£2,200 — comparable to renting outright but building equity in the share. LISA bonus accelerates the deposit.

Illustrative only. Specific scheme rules, eligibility criteria, available properties and lender terms vary. Always verify against current sources and your own circumstances before relying on a scheme.

Common mistakes with UK first-time buyer schemes

Five things UK first-time buyers most often get wrong about the schemes available to them.

• Assuming Help to Buy is still available in England

  Help to Buy equity loans closed to new English applications in October 2022. Older guides and articles still recommend it but it's gone for new buyers. Don't build a plan around it.

• Treating LISA + £450K cap as fixed forever

  The £450K LISA cap hasn't changed since the scheme launched in 2017 despite significant house-price growth. Plan against the current cap but be aware London and South-East buyers run into it routinely — if your target is above, the LISA bonus is lost on withdrawal.

• Overlooking First Homes due to limited stock

  First Homes properties don't appear on all listing sites and many councils have small registers. Always check your local council's housing strategy page directly — you might find qualifying properties no high-street agent has mentioned.

• Treating Shared Ownership as a fast route to full ownership

  Staircasing (buying additional shares) is expensive, slow and re-triggers stamp duty thresholds. Many shared owners stay at their original percentage long-term. Plan against that reality, not the optimistic staircasing path.

• Forgetting Mortgage Guarantee Scheme rates are higher

  5% deposit mortgages under the scheme typically cost 0.5-1.0% more per month than 90% LTV products. Over 5 years that's £3K-£6K more on a typical first-home mortgage. Compare against waiting 6-12 months for a bigger deposit before committing.

Related guides

Other guides that pair well with scheme selection.