Everything you need to know about first time buyer schemes uk 2026 in the UK.
The UK government and various housing bodies offer a range of schemes designed to help first-time buyers get onto the property ladder. With average house prices far outstripping average earnings in most parts of the country, saving a deposit large enough to buy a home can take years. These schemes aim to bridge the gap by reducing the deposit requirement, offering financial incentives or providing alternative routes to home ownership.
Understanding which schemes you are eligible for, and which best suit your circumstances, is essential for making the most of the support available. This guide covers the main schemes available in England as of 2025/26.
The Lifetime ISA is one of the most valuable savings vehicles for first-time buyers. If you are aged between 18 and 39, you can open a LISA and save up to £4,000 per year. The government adds a 25% bonus on top of your contributions—that is up to £1,000 of free money every year. The bonus is paid monthly, so your money starts working for you straight away.
You can use the LISA funds (including the bonus) towards the purchase of your first home, provided the property costs no more than £450,000. If you withdraw the money for any purpose other than buying a first home or retirement (after age 60), a 25% withdrawal penalty applies, which means you actually get back less than you put in.
💡 You can hold a LISA alongside a regular ISA. The £4,000 LISA allowance counts towards your overall £20,000 ISA allowance. If you are several years away from buying, a stocks and shares LISA may deliver higher returns than a cash LISA, though the value can go down as well as up.
Shared Ownership lets you buy a share of a property (between 25% and 75%) and pay rent on the remaining share to a housing association. You need a mortgage to cover your share and a deposit of typically 5% to 10% of your share’s value—not the full property price. This makes the upfront costs much more manageable.
Over time, you can buy additional shares in the property through a process called staircasing, eventually reaching full ownership if you wish. Shared Ownership is available on new-build properties and some resale properties through housing associations.
To be eligible, your household income must be no more than £80,000 per year (or £90,000 in London), and you must be a first-time buyer or a previous homeowner who cannot afford to buy now. You should be aware that you are responsible for 100% of the maintenance and repairs, even though you only own a share.
The First Homes scheme offers selected new-build properties to first-time buyers at a discount of at least 30% compared to the market price. The discount is passed on to future buyers when the property is sold, creating a permanent pool of affordable housing. The maximum price after discount is £250,000 (or £420,000 in London).
Eligibility criteria include a household income cap of £80,000 (or £90,000 in London) and being a first-time buyer. Local councils may add additional criteria, such as a connection to the local area or a lower income cap. The discount is locked to the property in perpetuity through a restriction on the title.
The Mortgage Guarantee Scheme encourages lenders to offer 95% loan-to-value mortgages by providing a government-backed guarantee on the portion of the loan above 80% LTV. This means first-time buyers (and home movers) can purchase a property with just a 5% deposit.
The scheme is available on properties worth up to £600,000 and is not limited to first-time buyers, although they are the primary beneficiaries. Several major lenders participate, including Lloyds, NatWest, HSBC, Barclays and Santander. You apply for a 95% mortgage directly through a participating lender—there is no separate application for the scheme itself.
⚠️ While a 5% deposit gets you onto the ladder, remember that a higher LTV means a higher interest rate and larger monthly payments. You will also have very little equity buffer if property prices fall. Where possible, saving a larger deposit (10% or more) will give you access to significantly better mortgage rates.
Right to Buy allows council tenants in England to buy their home at a discount of up to £96,000 (or £127,900 in London), depending on how long they have been a tenant. Right to Acquire is a similar scheme for housing association tenants, offering discounts of between £9,000 and £16,000 depending on the region.
To qualify for Right to Buy, you must have been a public-sector tenant for at least three years. The discount increases with length of tenancy. These schemes can provide an excellent route to ownership for eligible tenants, as the discount effectively acts as a deposit.
While not a government scheme, financial help from family members is one of the most common ways first-time buyers fund their deposit. Parents can gift money for a deposit, act as guarantors on a mortgage, or use savings as security through a family offset or family springboard mortgage. If parents gift money, the mortgage lender will require a gifted-deposit letter confirming the money is a gift and does not need to be repaid.
For inheritance tax purposes, cash gifts from parents are potentially exempt transfers—there is no IHT liability provided the donor survives for seven years. Annual exemptions of £3,000 per parent and gifts on marriage (up to £5,000 per parent) can also be used.
Navigating the various first-time buyer schemes can be confusing, and eligibility criteria change frequently. A mortgage broker experienced in first-time buyer purchases can help you understand which schemes you qualify for and find the most suitable mortgage product. Find a mortgage broker through Nesto to get expert guidance on your path to home ownership.
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