First-Time Buyer Schemes Explained

Published 24 September 2026

The below article has information contained within that was correct at the time of publication but is subject to change. This is for information purposes only and does not constitute advice.

First-Time Buyer Schemes Explained

Written by Doug Miller, Director at Lansdown Financial Services.

Doug Miller is a mortgage broker and co-founder of Lansdown Financial Services, based in Bath, quoted in 30+ news articles including the Guardian, Sky News, This is Money and the Sun.

Buying your first home can feel like a significant financial challenge, particularly when you’re trying to save a deposit while managing everyday living costs.

The good news is that several first-time buyer schemes and mortgage options could make getting onto the property ladder more achievable.

From Shared Ownership and First Homes to Lifetime ISAs and mortgages requiring just a 5% deposit, there are different ways to approach your first purchase.

However, not every scheme will be suitable for everyone, and you don’t necessarily need to use a government scheme to buy your first home.

Understanding your borrowing potential, deposit requirements and the options available is the best place to start.

Key Points: The Short Version

Don’t have time to read the full article? Here are the six key things you need to know.

• First Homes offers discounted properties: Eligible first-time buyers in England can purchase qualifying homes at a discount of 30% to 50% below market value.
• Shared Ownership allows you to buy a share: You purchase part of a property and pay rent on the remaining share, potentially reducing the initial deposit required.
• Lifetime ISAs can boost your deposit: Eligible savers can receive a 25% government bonus on contributions of up to £4,000 each tax year.
• You may only need a 5% deposit: Some lenders offer 95% mortgages, allowing eligible buyers to purchase without saving a 10% or 15% deposit.
• The Mortgage Guarantee Scheme supports low-deposit lending: The government-backed scheme helps participating lenders offer eligible mortgages at 91% to 95% loan-to-value.
• First-time buyers may pay less Stamp Duty: In England and Northern Ireland, qualifying buyers pay no Stamp Duty on the first £300,000 of a property costing £500,000 or less.

The bottom line: There isn’t one first-time buyer scheme that’s best for everybody. The right approach depends on your income, deposit, property budget and where you’re looking to buy. In some cases, a conventional mortgage may be simpler and more cost-effective than using a government-backed scheme.

The Full Guide: First-Time Buyer Schemes and Mortgage Options

Want to understand the detail? Below, we explain the main schemes available to first-time buyers, who qualifies, how much deposit you might need and what to consider before applying.

This guide focuses primarily on schemes in England. Different arrangements and eligibility rules can apply in Scotland, Wales and Northern Ireland.

In This Guide

• What first-time buyer schemes are available
• How the First Homes scheme works
• Shared Ownership explained
• Lifetime ISAs and deposit bonuses
• Buying with a 5% deposit
• The Mortgage Guarantee Scheme
• First-time buyer Stamp Duty relief
• Choosing the right option
• Frequently asked questions

What First-Time Buyer Schemes Are Available?

There are several routes into home ownership, but they work in different ways.

Some schemes help you purchase a property at a discounted price, others reduce the amount you need to buy initially, and some provide financial support towards your deposit.

It’s also possible to buy with a relatively small deposit through a conventional mortgage.

Scheme or option	How it helps	Key consideration
First Homes	Offers eligible properties at a 30% to 50% discount.	Limited property availability and eligibility requirements.
Shared Ownership	Allows you to purchase a share of a property.	You pay rent on the remaining share alongside mortgage and other costs.
Lifetime ISA	Provides a 25% government savings bonus.	Property price and withdrawal restrictions apply.
95% mortgage	Allows eligible buyers to purchase with a 5% deposit.	Affordability, lender criteria and potentially higher rates.
Mortgage Guarantee Scheme	Supports lenders offering low-deposit mortgages.	The guarantee protects the lender, not the borrower.
First-time buyer Stamp Duty relief	Reduces purchase tax for qualifying buyers.	Property price limits and eligibility requirements apply.

The first thing we’d normally establish is how much you could afford with a conventional mortgage.

We can then compare that with schemes that might give you additional options.

What Is the First Homes Scheme?

The First Homes scheme is a government initiative in England that allows eligible first-time buyers to purchase certain properties at a discount of 30% to 50% below their market value.

For example, imagine a property has a market value of £300,000 and is available through First Homes with a 30% discount.

Property details	Amount
Full market value	£300,000
First Homes discount	30%
Discount amount	£90,000
Purchase price	£210,000

Illustrative example of a property qualifying for a 30% First Homes discount.

This could significantly reduce both the deposit and mortgage required.

Unlike Shared Ownership, you purchase the qualifying property rather than a percentage share, so you don’t pay rent on a share retained by a housing provider.

However, the discount remains attached to the property.

When you eventually sell, you’ll normally need to pass the same percentage discount on to another eligible buyer.

Who Qualifies for the First Homes Scheme?

To qualify under the national rules, you must generally:

• Be at least 18 years old and a first-time buyer.
• Purchase the property as your only or main residence.
• Have household income of no more than £80,000 before tax, or £90,000 in London.
• Be able to obtain a mortgage covering at least 50% of the discounted purchase price.
• Meet any additional local eligibility requirements.

If you’re buying jointly, everyone purchasing must normally be a first-time buyer.

Local authorities can also introduce requirements or prioritise buyers with particular connections to the area.

For new-build First Homes, the discounted purchase price is generally capped at £250,000 outside London or £420,000 in London, although local authorities can impose lower limits.

Are First Homes Available Everywhere?

No, and this is one of the scheme’s main limitations.

You can’t choose any property on the open market and simply apply for a 30% discount.

The property must be available through the First Homes scheme, either as a qualifying new-build home or a resale of a property previously purchased through the scheme.

Availability therefore depends on where you’re hoping to buy.

If you find an eligible property, it’s worth checking your mortgage options and eligibility before paying a reservation fee or making a commitment.

What Is Shared Ownership?

Shared Ownership allows eligible buyers to purchase a percentage of a property while paying rent to a housing provider on the remaining share.

In England, the share available under the scheme can range from 10% to 75% of the property’s full market value, depending on the property and scheme arrangements.

For example, imagine you’re buying a 25% share in a home worth £300,000.

Property details	Amount
Full property value	£300,000
Share purchased	25%
Cost of your share	£75,000
Example 5% deposit on your share	£3,750
Mortgage required on your share	£71,250

Illustrative figures excluding rent, service charges, legal fees and other purchase costs.

You would arrange a Shared Ownership mortgage for your share, while paying rent on the remaining 75% owned by the housing provider.

This can make buying more achievable for someone who cannot afford a suitable property outright.

How Much Deposit Do You Need for Shared Ownership?

Shared Ownership deposits are often around 5% to 10% of the share you’re purchasing, although requirements depend on the lender and property.

This can be considerably less than the deposit required to buy the entire property.

However, it’s important not to focus solely on the initial deposit.

Your monthly commitments may include:

• Mortgage repayments on your purchased share.
• Rent on the share you don’t own.
• Service charges and applicable management costs.
• Insurance and ongoing property expenses.

We’d want to understand the total monthly cost before recommending Shared Ownership over a conventional mortgage.

Who Is Eligible for Shared Ownership?

In England, your household income generally needs to be £80,000 a year or less, or £90,000 or less in London.

You must also be unable to afford the deposit and mortgage payments required to buy a suitable property outright.

The scheme isn’t exclusively for first-time buyers.

Some previous homeowners, people forming new households and existing Shared Ownership buyers may also qualify.

Individual developments can have additional eligibility requirements.

Can You Buy More of the Property Later?

Usually, yes.

This is called staircasing.

Staircasing allows you to purchase additional shares in your home over time, reducing the proportion owned by the housing provider and generally reducing the rent payable.

Depending on the lease and scheme, you may eventually be able to purchase 100% of the property.

However, there can be restrictions, and additional shares may need to be purchased at the property’s value at the time.

Legal, valuation and administration costs may also apply.

It’s worth understanding these conditions before purchasing rather than assuming you can automatically increase your ownership whenever you wish.

What Is a Lifetime ISA?

A Lifetime ISA (LISA) isn’t a mortgage scheme, but it can be a useful way to save towards your first home.

Eligible savers can contribute up to £4,000 each tax year and receive a 25% government bonus.

For example:

Your savings	Government bonus	Total
£1,000	£250	£1,250
£2,000	£500	£2,500
£4,000	£1,000	£5,000
£8,000 over two tax years	£2,000	£10,000

Illustrative figures excluding interest, investment returns and charges.

If you’re buying with a partner and you both qualify as first-time buyers with your own Lifetime ISAs, you can potentially use both accounts towards the purchase.

What Are the Lifetime ISA Rules?

You generally need to be aged between 18 and 39 to open a Lifetime ISA.

You can continue contributing until age 50, subject to the account rules.

To use a Lifetime ISA towards your first home without triggering the normal withdrawal charge:

• The property must cost £450,000 or less.
• At least 12 months must have passed since your first contribution.
• You must be buying with a qualifying mortgage.
• The property must be intended as your main residence.
• The funds must be withdrawn through your conveyancer.

If you withdraw money for a reason that doesn’t qualify, a 25% withdrawal charge will normally apply to the amount withdrawn.

This can mean receiving back less than you originally contributed.

The important point is to understand the rules before opening or relying on a Lifetime ISA for your deposit, especially if you may buy a property above the £450,000 limit.

Can You Buy Your First Home with a 5% Deposit?

Yes, potentially.

You don’t necessarily need to use Shared Ownership or another affordable housing scheme simply because you have a relatively small deposit.

Some mortgage lenders offer 95% loan-to-value mortgages, allowing eligible buyers to purchase a property with a 5% deposit.

For example:

Property purchase price	5% deposit	Mortgage required
£200,000	£10,000	£190,000
£250,000	£12,500	£237,500
£300,000	£15,000	£285,000
£400,000	£20,000	£380,000

Illustrative examples. Mortgage availability depends on affordability, credit history, property eligibility and lender criteria.

A 95% mortgage could allow you to buy sooner rather than waiting several additional years to build a larger deposit.

However, there are trade-offs.

Mortgage rates can be higher than those available to borrowers with larger deposits, and lender choice may be more limited.

You’ll also need enough income to support the mortgage repayments.

For some buyers, purchasing with a 5% deposit makes sense.

For others, saving a little more could provide access to more competitive mortgage products.

We’d compare the options rather than automatically recommending one approach.

What Is the Mortgage Guarantee Scheme?

The Mortgage Guarantee Scheme is a government-backed initiative designed to support the availability of mortgages at 91% to 95% loan-to-value.

The current permanent scheme was introduced in July 2025, helping participating lenders offer eligible borrowers mortgages requiring deposits as small as 5%.

However, it’s important to understand who the government guarantee actually protects.

The guarantee is provided to participating mortgage lenders against a portion of their potential losses.

It doesn’t mean the government guarantees your application will be approved or that it will make your mortgage repayments.

You still need to meet the lender’s normal affordability, credit and property requirements.

It’s also possible to obtain a 95% mortgage outside the government-backed scheme.

From a buyer’s perspective, the most important question is whether the mortgage offers suitable terms and an affordable overall cost.

Do First-Time Buyers Pay Stamp Duty?

First-time buyers purchasing in England or Northern Ireland may qualify for Stamp Duty Land Tax relief.

Under the current rules, eligible first-time buyers pay:

• 0% Stamp Duty on the first £300,000 of the purchase price.
• 5% on the portion between £300,001 and £500,000.
• No first-time buyer relief if the total purchase price exceeds £500,000.

For example:

Property price	Stamp Duty with first-time buyer relief
£250,000	£0
£300,000	£0
£350,000	£2,500
£400,000	£5,000
£500,000	£10,000

Illustrative SDLT calculations for qualifying first-time buyers in England or Northern Ireland. Different property taxes apply in Scotland and Wales.

To qualify, you and anyone else purchasing with you must meet the first-time buyer conditions, and the property must be intended as your main residence.

Shared Ownership and other affordable housing arrangements can involve additional Stamp Duty considerations, so it’s worth confirming the specific calculation with your solicitor.

Which First-Time Buyer Scheme Is Best?

There isn’t one scheme that’s right for everybody.

Someone with a modest deposit but sufficient income may be able to purchase a property outright with a 95% mortgage.

Another buyer may find that Shared Ownership makes buying in their preferred area achievable.

Someone eligible for a First Homes property could benefit substantially from the discounted purchase price.

And someone planning to buy in the future might benefit from building their deposit through a Lifetime ISA.

The right approach depends on your circumstances.

Which Option Might Suit Your Situation?

Your circumstances	Options worth exploring
You’ve saved a 5% deposit	Conventional 95% mortgages and participating Mortgage Guarantee Scheme lenders.
You can’t afford a suitable property outright	Shared Ownership, subject to eligibility.
You’ve found a qualifying discounted property	First Homes, subject to eligibility and lender criteria.
You’re still saving for your first home	Lifetime ISA, subject to its rules and suitability.
You have a larger deposit	Conventional mortgages, which may offer a wider choice of products.

Before recommending a particular scheme, we’d normally assess your income, deposit, financial commitments and likely borrowing capacity.

You may discover that a conventional mortgage is more achievable than you expected.

Equally, an affordable home ownership scheme may genuinely provide a route to buying that wouldn’t otherwise be available.

Should You Speak to a Mortgage Adviser Before Applying?

We’d recommend understanding your mortgage options before committing to a property or paying a reservation fee.

Not every mortgage lender supports every affordable home ownership scheme.

Shared Ownership mortgages, for example, involve additional considerations because you’re purchasing a share in a leasehold property while paying rent on the remaining share.

First Homes properties also have specific eligibility requirements and restrictions.

A mortgage adviser can help you understand which lenders support the relevant scheme, how much you may be able to borrow and whether the overall costs are affordable.

This is particularly useful if you’re comparing Shared Ownership with purchasing outright or deciding whether buying with a 5% deposit is realistic.

Frequently Asked Questions About First-Time Buyer Schemes

Is the Help to Buy Equity Loan Scheme Still Available?

No. The Help to Buy Equity Loan scheme in England closed to new applications in 2022.

If you’ve read older guides discussing Help to Buy equity loans, it’s important to check whether the scheme is still operating rather than assuming it’s available for new purchases.

Other schemes and low-deposit mortgage options may still be relevant.

Do You Need to Be a First-Time Buyer to Use Shared Ownership?

Not always.

Some previous homeowners and people whose circumstances mean they cannot afford a suitable property outright may also qualify, subject to the relevant eligibility requirements.

Can You Use a Lifetime ISA with Shared Ownership?

Potentially, yes.

Eligible first-time buyers can use Lifetime ISA savings towards qualifying Shared Ownership purchases, subject to the normal rules.

It’s important to check how the property price limit applies to the full market value of the property and the purchase arrangement.

Can You Get a Mortgage with No Deposit?

Most conventional mortgage products require a deposit, although some lenders offer specialist arrangements that may allow borrowing without a traditional cash deposit, subject to strict criteria.

These can include products involving family support or other security.

Such arrangements are different from government-backed first-time buyer schemes and need careful consideration.

How Lansdown Financial Services Can Help

Buying your first home is a major financial commitment, and understanding the different schemes and mortgage options can sometimes feel unnecessarily complicated.

At Lansdown Financial Services, we take the time to understand your circumstances, your deposit and the type of property you’re hoping to buy.

Whether you’re considering Shared Ownership, First Homes, a 95% mortgage or a conventional first-time buyer mortgage, our award-winning mortgage advisers can help you understand your borrowing options and compare suitable lenders.

We’ll assess your affordability, explain the different products available and guide you through the mortgage process, from your initial Mortgage in Principle through to your formal mortgage offer.

As a free, whole-of-market mortgage adviser with access to more than 70 lenders, we provide straightforward, personalised advice without the jargon.

Looking to buy your first home but unsure which mortgage or scheme might be right for you?

Contact Lansdown Financial Services or call 01225 459515 to speak to one of our award-winning mortgage advisers for free, expert mortgage advice.

Your home may be repossessed if you do not keep up repayments on your mortgage.

About the Author

Written by Doug Miller, Director at Lansdown Financial Services.

Doug Miller is a mortgage broker and co-founder of Lansdown Financial Services, based in Bath, quoted in 30+ news articles including the Guardian, Sky News, This is Money and the Sun.