The main first-time buyer schemes at a glance
How the key options compare across key metrics.
| Scheme | How it helps | Max property price | Best suited to |
|---|---|---|---|
| Lifetime ISA | 25% bonus on savings, up to £1,000/year | £450,000 | Steady savers with time to build a deposit |
| Shared ownership | Buy a share, pay rent on the rest | Varies by region | Buyers who cannot fund 100% of a home |
| First Homes (England) | 30%+ discount on new-builds, permanent | £250,000 (£420,000 London) | Local first-time buyers within income caps |
| Mortgage Guarantee scheme | Supports 5% deposit mortgages | £600,000 | Buyers with a small deposit and good income |
| First-time buyer stamp duty relief | Reduced or zero SDLT | £625,000 (England) | All first-time buyers within the threshold |
| Shared Equity (Wales) | Interest-free equity loan up to 20% | £300,000 | First-time buyers purchasing in Wales |
| First Home Fund (Scotland) | Equity loan up to £25,000 | Varies | First-time buyers purchasing in Scotland |
Scheme availability and thresholds differ between England, Scotland, Wales and Northern Ireland. Check the rules for the nation where you are buying.
Lifetime ISA: boosting your deposit savings
The Lifetime ISA (LISA) is available to anyone aged 18 to 39. You can save up to £4,000 per tax year and the government adds a 25% bonus of up to £1,000 per year. Over five years of maximum contributions, you could accumulate £25,000 in savings plus £5,000 in bonuses, giving a £30,000 pot to put towards a deposit.
To use the LISA for a home purchase, the property must cost £450,000 or less, the LISA must have been open for at least 12 months, and you must be a first-time buyer buying with a mortgage. The LISA can be held with a bank or investment provider; cash LISAs earn interest on top of the bonus, while stocks-and-shares LISAs offer potential growth alongside the government top-up.
The withdrawal penalty is important to understand. If you withdraw funds for any reason other than buying your first home, reaching age 60, or terminal illness, you pay a 25% government penalty on the whole withdrawal. Because the penalty applies to the total amount (including the bonus), you can end up with less than you paid in. Never use a LISA as a flexible savings account; it works best when you are confident you are saving specifically for a first home.
Shared ownership: buying what you can afford
Shared ownership lets you purchase a share of a new-build or resale home, typically between 10% and 75%, and pay a subsidised rent to a housing association on the portion you do not own. The deposit and mortgage are based only on the share you buy, making it accessible at a much lower income than buying outright.
For example, if a flat is valued at £280,000 and you buy a 25% share for £70,000, you need a 5% to 10% deposit on £70,000 (£3,500 to £7,000) rather than on the full £280,000. You also pay rent on the remaining 75%, usually set at around 2.75% of the unsold share annually, plus any service charges and ground rent.
Over time you can buy additional shares in a process called 'staircasing'. Some properties allow staircasing all the way to 100% ownership; others have a cap. Before purchasing shared ownership, read the lease carefully: lease length, staircasing rights, service charges and resale restrictions all materially affect the long-term value of the investment. Properties with short leases or high service charges can be difficult to sell or mortgage in future.
First Homes scheme: a permanent discount
First Homes (England only) offers eligible first-time buyers a minimum 30% discount off the market value of a designated new-build property, with some councils applying 40% or 50% discounts. A home independently valued at £300,000 would cost a maximum of £210,000 under the 30% discount. The discount is permanent, meaning every future buyer also receives the same percentage reduction, keeping the property affordable in perpetuity.
Eligibility requires a household income of no more than £80,000 (£90,000 in London), first-time buyer status, and the ability to obtain a mortgage for at least 50% of the discounted price. After the discount, the price must not exceed £250,000 outside London or £420,000 in Greater London. Councils may also impose local-connection or key-worker priority criteria.
Unlike shared ownership, you own 100% of the property, so there is no rent to pay alongside your mortgage. However, your home's value tracks the discounted market rather than the open market, which affects the equity you accumulate over time.
Mortgage Guarantee scheme and stamp duty relief
The Mortgage Guarantee scheme is not limited to first-time buyers, but it is especially useful for those with small deposits. The government backs lenders offering 95% loan-to-value mortgages, enabling you to buy with just a 5% deposit on homes up to £600,000. You still need to pass full affordability checks, and the interest rate on a 95% mortgage is usually higher than on deals requiring a larger deposit, so the scheme reduces the deposit barrier without eliminating the cost of a high loan-to-value mortgage.
Stamp duty land tax (SDLT) relief for first-time buyers in England means you pay no SDLT on the first £425,000 of a property's price, and 5% on the portion between £425,001 and £625,000. Above £625,000 no first-time buyer relief applies and standard rates are charged from £1. Scotland charges Land and Buildings Transaction Tax (LBTT), with a first-time buyer relief raising the nil-rate threshold. Wales charges Land Transaction Tax (LTT) with its own first-time buyer thresholds. These reliefs can save thousands of pounds at completion.
How to choose between schemes
- Time horizon: if you are saving over the next two or more years, a Lifetime ISA maximises your deposit through the bonus. If you need to buy sooner, the Mortgage Guarantee scheme or First Homes may be more relevant.
- Deposit size: with a very small deposit (under 10%), the Mortgage Guarantee scheme or shared ownership reduce how much you need upfront. First Homes reduces the price itself, which cuts the deposit proportionally.
- Property type preference: First Homes and shared ownership typically apply to new-builds. The Mortgage Guarantee scheme works on new and existing homes.
- Location: First Homes is England-only and varies by local authority. Wales and Scotland run separate equity loan programmes. Check which schemes are active in your target area.
- Income level: shared ownership and First Homes both have income caps. Higher earners near those caps may find the Mortgage Guarantee scheme or a Lifetime ISA more straightforward.
- Combining schemes: a LISA can fund part of the deposit on a shared-ownership or First Homes purchase, while first-time buyer stamp duty relief applies alongside any of them.
Stack support wherever possible
Many first-time buyers combine multiple sources of help. A typical example: save in a Lifetime ISA for two to three years to build a bonus-boosted deposit, then use that deposit to buy a shared-ownership home while claiming first-time buyer stamp duty relief. Or use the LISA towards a First Homes deposit and take the stamp duty saving on top. A whole-of-market mortgage broker can map out the most efficient combination for your exact income, savings and target area.
Devolved-nation schemes
Scotland, Wales and Northern Ireland each run their own programmes. In Scotland, the Scottish Government's First Home Fund has offered interest-free equity loans to first-time buyers; check current availability with your local council or via mygov.scot. Wales runs the Homebuy scheme (an equity loan) and the Shared Equity scheme for new-builds. Northern Ireland's Co-Ownership scheme, operated by Co-Ownership Housing, lets buyers purchase a share of a home and pay rent on the rest, similar in concept to shared ownership in England.
Stamp duty equivalents also differ: Scotland charges LBTT and Wales charges LTT, each with their own first-time buyer thresholds and rates. If you are buying outside England, always check the rules in the relevant nation rather than assuming English schemes or thresholds apply.