First-Time Buyer Schemes in the UK Explained

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Key takeaways

Schemes differ by nation and change often, so check the official source
A Lifetime ISA bonus can help with a first home but has penalties for other withdrawals
Shared ownership lowers the upfront cost but adds rent and lease obligations
Compare the total cost of any scheme, not only the deposit
Official schemes are free to apply for, so avoid paying for access

Buying your first home can feel out of reach, but there are schemes across the UK designed to help. They change often, and each has eligibility rules, price limits and trade-offs. This guide explains the main types of help, how they work in principle and how to check what is currently available. Always confirm the current rules on GOV.UK or with the scheme provider before relying on any scheme.

Types of help

Savings help

Lifetime ISA (LISA): if you are aged 18 to 39 you can open one and save up to an annual limit. The government adds a bonus on what you pay in. You can use the money towards a first home within a price cap, or for retirement from age 60. Withdrawing for any other reason normally incurs a charge, which can mean getting back less than you paid in. Check the current rules on GOV.UK.
Regular savings and cash ISAs: useful for building a deposit; see how to save money each month and ISAs explained.

Mortgage help

Mortgage guarantee schemes: in some periods, the government has backed lenders offering mortgages with smaller deposits, such as 5%, by guaranteeing part of the loan. Whether such a scheme is running, and which lenders take part, changes, so check the government's current position.
Lender products for small deposits: several lenders offer 95% mortgages, with or without government support.
Family-assisted mortgages: a relative's savings or property can be used as security, so you can borrow with a smaller deposit. These carry risks for the family member, so get independent advice.

Shared ownership

You buy a share of a home, commonly between 10% and 75%, and pay rent on the rest to a housing association. Over time you can buy more shares, called staircasing. It can lower the deposit and mortgage you need, but you pay rent as well as the mortgage, and you are responsible for repairs. It is important to understand lease terms, service charges and what happens when you sell.

Discounts and other schemes

First Homes and similar discount schemes in England offered new homes at a discount for local first-time buyers, where available.
Right to Buy and Right to Acquire: secure tenants of councils and some housing associations may qualify to buy their home at a discount. The rules and discounts vary by nation.
Rent to buy: you rent a property, often at a reduced rent, with an option to buy it later.
Self-build and custom-build schemes, offered by some local authorities.

Help in Scotland, Wales and Northern Ireland

Each nation has its own housing policies and support. For example, there are shared equity schemes, help to buy and affordable housing options run by the Scottish, Welsh and Northern Ireland governments, and these differ from England's. Check the relevant government website for the current position.

Stamp duty relief for first-time buyers

In England and Northern Ireland, first-time buyers may pay less Stamp Duty Land Tax, or none, up to certain price limits. Scotland and Wales have their own rules for Land and Buildings Transaction Tax and Land Transaction Tax, and relief and thresholds vary and are reviewed. Use the official calculators on GOV.UK, Revenue Scotland and the Welsh Revenue Authority. See the costs of buying a home.

How to decide

Ask these questions about any scheme.

Am I eligible? Check age, income, location, property type and price limits.
What does it cost in total? Look at rent, fees, service charges and interest as well as the deposit.
What are the restrictions? Some schemes limit who you can sell to or how much you can sell for.
What happens in the future? Consider how easy it will be to move, remortgage or buy more of the property.
Is the mortgage affordable if rates rise? Use our mortgage repayment calculator and see fixed vs tracker mortgages.

Getting advice

Speak to an authorised mortgage adviser familiar with the scheme you are considering. For shared ownership, ask for independent legal advice about the lease. MoneyHelper offers free guidance. Be wary of anyone who charges a fee to "find" you a government scheme: official schemes are free to apply for.

Avoid these mistakes

Assuming a scheme is available without checking
Overstretching to buy the most expensive property you qualify for
Forgetting extra costs like moving, legal fees and furniture
Using money from your emergency fund for the deposit
Ignoring the lease terms on a shared ownership or leasehold home

A worked comparison

Imagine a home priced at £200,000. Buying outright with a mortgage and a 5% deposit means borrowing £190,000 and paying all the costs of ownership. Under a shared ownership arrangement you might buy a 40% share for £80,000, put down a deposit of 5% of that share, borrow about £76,000 and pay rent on the remaining 60%. The mortgage payment is smaller, but you add rent and service charges, and you own only part of the equity. Whether it is cheaper overall depends on the rent, the fees and how fast you buy more shares. Always request an illustration showing the total monthly cost and compare it with a standard mortgage.

Preparing before you apply

Check your credit report; see how to check your credit report
Register to vote at your address
Keep your bank statements tidy, because lenders look at spending patterns
Avoid taking on new credit before applying
Build a budget including the new costs; see how to make a budget
Get an agreement in principle before house hunting so you know your price range

Frequently asked questions

What counts as a first-time buyer?

Usually someone who has never owned a residential property anywhere in the world. Definitions vary by scheme, so check the rules.

Can I use a Lifetime ISA for any home?

No. There is a price cap and the property must be in the UK, and you must buy with a mortgage and use a conveyancer. Check the current terms.

Is shared ownership a good idea?

It can be a route onto the ladder, but you should understand the rent, fees, repair responsibilities and how selling works before you commit.

Where can I find out which schemes I qualify for?

Start with GOV.UK and MoneyHelper, or the housing agency for your nation.

Sources and further reading

Affordable home ownership schemes — GOV.UK
Lifetime ISA — GOV.UK
Buying a home — MoneyHelper
Stamp Duty Land Tax for first-time buyers — GOV.UK

This page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.

Written by

MoneyBrink Editorial Team — Editorial team

The MoneyBrink Editorial Team researches, writes and reviews every guide on this site. We work from official UK sources such as GOV.UK, the Financial Conduct Authority, MoneyHelper and the Money and Pensions Service, explain things in plain English, and update articles when the rules change. We do not sell financial products and we do not give personal advice.

Read how we research and check our guides in our editorial policy.

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