Every First-Time Buyer Scheme Still Available in 2026 — and Which One Fits Your Situation

The Lifetime ISA remains the single best tool for first-time buyers under 40. Save up to £4,000 per year and the government adds a 25% bonus — that's £1,000 free money annually, up to £32,000 over the account's lifetime.

The catch: the property must cost £450,000 or less, and you must have held the LISA for at least 12 months before using it. Withdraw for any other purpose (except retirement at 60) and you'll face a 25% withdrawal penalty — which actually means you lose 6.25% of your own money, not just the bonus.

Who it suits: Anyone under 40 buying a property under £450,000. Start one now even if you're not buying for 3-5 years — the clock starts ticking on the 12-month rule, and the annual £1,000 bonus compounds. A couple both saving £4,000/year for 4 years accumulates £40,000 in contributions plus £10,000 in government bonuses.

Who should avoid it: Buyers targeting properties above £450,000 (much of London and the South East). The penalty for withdrawal makes it actively harmful if you end up exceeding the limit.

For more on maximising your ISA allowance before the deadline, see our ISA splitting guide and the ISA hub for all ISA types compared.

Shared Ownership lets you buy 25-75% of a property and pay rent on the remainder to a housing association. Your deposit is 5% of your share — so on a £250,000 home, buying a 25% share (£62,500) requires just a £3,125 deposit.

The maths looks appealing until you factor in the rent. At a typical 2.75% of the housing association's retained share, you'd pay roughly £430/month in rent on top of your mortgage. You're paying a mortgage AND rent simultaneously.

Shared Ownership is cheaper monthly, but you own less, pay rent on the rest, and face restrictions on modifications and selling. Staircasing (buying additional shares) costs valuation fees each time and isn't guaranteed to be affordable.

Who it suits: Buyers in expensive areas who genuinely cannot afford a full purchase. Key workers in London where a £500,000 property is entry-level. People who want to stop renting entirely and build some equity, even if partial.

Who should avoid it: Anyone who can stretch to a 95% LTV mortgage through Freedom to Buy. Full ownership is almost always better than partial ownership plus rent.

The government's Mortgage Guarantee Scheme, made permanent in July 2025 as "Freedom to Buy," enables 95% LTV mortgages by underwriting the portion above 80% LTV. Translation: you need just a 5% deposit.

On a £250,000 home, that's £12,500. Achievable for many first-time buyers within 2-3 years of focused saving — especially if you're using a LISA to add the government bonus.

The trade-off is cost. 95% LTV mortgage rates sit roughly 0.5-1% above 90% LTV rates, and 1-1.5% above 75% LTV rates. On a £237,500 mortgage at 4.8% versus 4.0% (90% LTV), you'd pay roughly £45 more per month — or £2,700 over a 5-year fix.

But here's the thing: house prices in England rose 4.6% in 2025. Waiting another year to save a 10% deposit might cost you more in price appreciation than the higher interest rate. The maths favours buying sooner with 5% rather than waiting for 10% in a rising market.

Who it suits: First-time buyers who can afford monthly payments but struggle with the deposit. Those in areas where property prices are rising faster than they can save.

Who should avoid it: Buyers in falling markets where negative equity risk is real at 95% LTV. Anyone whose monthly budget is already stretched — the higher rate adds stress.

The First Homes scheme offers new-build properties at a minimum 30% discount to market value, locked in perpetuity. A £300,000 new build becomes £210,000. The discount passes to future buyers, so it's permanently affordable housing.

Eligibility: first-time buyer, household income under £80,000 (£90,000 in London), and the discounted price must be £250,000 or less (£420,000 in London). Local connections and key worker status get priority.

The discount is extraordinary — 30% off is worth more than any other scheme for eligible buyers. But availability is limited to specific new-build developments, and the perpetual discount means you can't benefit from full market price appreciation when selling.

Who it suits: First-time buyers in areas with active First Homes developments, particularly key workers (NHS, teaching, emergency services, armed forces) who get priority. The 30% discount makes this the most financially generous scheme available.

Who should avoid it: Those who view property primarily as an investment. The locked-in discount means your home can never be sold at full market value. If you're buying for 5-10 years and hoping for capital growth, other routes offer more upside.

Beyond government schemes, developers offer their own programmes to shift stock:

Own New Rate Reducer redirects the builder's incentive budget (typically 3-5% of the purchase price) to buy down your mortgage rate. Instead of a free kitchen upgrade or stamp duty contribution, the developer effectively subsidises your interest rate for the first 2-5 years. Some buyers have secured rates below 2% through this scheme.

New Build Boost combines a traditional mortgage with an interest-free equity loan, letting buyers access 80% LTV rates with a smaller deposit. Similar in structure to Help to Buy, but developer-funded rather than government-backed.

Both schemes apply only to new-build properties from participating developers. The developer absorbs the cost as a sales incentive — so the "discount" is often already priced into a higher new-build premium. Check the per-square-foot price against comparable existing properties before assuming you're getting a deal.

Who they suit: Buyers set on new builds who want to reduce their mortgage rate or access better LTV bands. Compare the total cost (including the new-build premium) against an equivalent existing property with a standard mortgage.

Wales still offers Help to Buy Wales equity loans until September 2026 — the only nation where HTB remains available.

The right scheme depends on three variables: your deposit, your income, and where you're buying.

Under £10,000 deposit: Shared Ownership (25% share needs only £3,125 deposit on a £250,000 property) or Freedom to Buy (5% = £12,500 on £250,000). If you're under 40, start a LISA immediately to boost your deposit by 25%.

£10,000-£25,000 deposit: Freedom to Buy at 95% LTV, combined with a LISA bonus. This is the sweet spot for most first-time buyers in England outside London.

Buying in an area with First Homes developments: Apply. The 30% discount outweighs every other scheme's benefits. A £300,000 property for £210,000 is unbeatable.

Household income under £80,000 buying a new build: Check First Homes first, then Own New Rate Reducer, then Freedom to Buy.

London buyer: First Homes (£90,000 income cap, £420,000 price cap after discount), Shared Ownership (realistic for expensive areas), or LISA (works up to £450,000). Freedom to Buy also works if you can find a property under £500,000.

For more on stamp duty relief for first-time buyers, use our calculator — first-time buyers pay no stamp duty on properties up to £425,000.

This article is for informational purposes only and does not constitute financial advice. You should seek independent financial advice before making any investment decisions.