First time buyer schemes 2026: every government scheme compared

The UK government runs several schemes to help first time buyers get onto the property ladder. Each one works differently, so the right choice depends on your savings, income and the type of property you want to buy.

Here is a summary of the main schemes still open in 2026:

• Lifetime ISA: save up to 4,000 per year and receive a 25% government bonus. You can use the funds towards a property worth up to 450,000.
• Shared ownership: buy a share of a property (between 25% and 75%) and pay subsidised rent on the remainder. You can staircase to full ownership over time.
• First Homes: new-build homes sold at a minimum 30% discount to local first time buyers and key workers, with a price cap of 250,000 after the discount (420,000 in London).
• Mortgage guarantee scheme: the government underwrites part of the lender's risk on 95% LTV mortgages, making it easier to buy with just a 5% deposit.

Help to Buy equity loans closed to new applications in March 2023. If you already have a Help to Buy equity loan, you will need to repay it when you sell or remortgage.

The Lifetime ISA (LISA) lets you save up to 4,000 each tax year towards your first home. The government adds a 25% bonus, meaning you receive up to 1,000 in free money every year. You must be aged 18 to 39 to open an account, and the property you buy must cost 450,000 or less.

You need to have held the account for at least 12 months before you can use it to buy. This is a crucial point: if you are planning to buy within the next year, open a LISA as soon as possible, even with a small initial deposit.

If you withdraw funds for any purpose other than buying your first home or retirement after age 60, you will face a 25% government withdrawal penalty. This means you would get back less than you paid in.

A LISA can be used alongside other first time buyer schemes. For example, you could combine your LISA savings with a 95% mortgage to reduce the amount you need to borrow. Many buyers also pair it with shared ownership, using the bonus to cover part of their deposit on a smaller property share.

Shared ownership lets you buy a share of a property, typically between 25% and 75%, and pay rent on the part you do not own. The remaining share is held by a housing association. You only need a mortgage and deposit for your share, which makes the upfront cost significantly lower than buying outright.

For example, if a property is valued at 300,000 and you buy a 40% share, your mortgage and deposit cover 120,000. You would pay rent to the housing association on the remaining 180,000 at a subsidised rate, typically around 2.75% of the unsold share per year.

Over time, you can buy additional shares through a process called staircasing. Each time you staircase, the property is revalued, so you may pay more or less than you expect depending on how prices have moved. Once you own 100%, you stop paying rent entirely and own the property outright.

To qualify, your household income must be 80,000 or less (90,000 in London). You must be a first time buyer, a previous homeowner who cannot afford to buy now, or an existing shared owner. Properties are available through housing associations and some developers.

First Homes is a government scheme that offers new-build properties to first time buyers and key workers at a discount of at least 30% below market value. Some local authorities offer discounts of 40% or 50% depending on the area.

After the discount, the property must cost no more than 250,000 (or 420,000 in London). Your household income must be below 80,000, or 90,000 in London. You need a mortgage for at least 50% of the discounted purchase price.

The discount stays with the property permanently. When you sell, the next buyer must also be a first time buyer or key worker, and the same percentage discount applies at the new market value. This means First Homes do not offer the same potential for capital growth as buying on the open market.

Availability is limited because properties must be offered to local buyers and key workers first. Your local council manages applications, and demand often exceeds supply. If you are interested, register with your council and check regularly for new developments in your area. You can also combine First Homes with a mortgage affordability calculator to check how much you could borrow against the discounted price.

The mortgage guarantee scheme encourages lenders to offer mortgages at up to 95% loan-to-value (LTV) by having the government guarantee a portion of the loan. This means you can buy a home with just a 5% deposit. The scheme runs until June 2025, but many lenders now offer 95% mortgages outside the scheme as well.

The scheme is available to all buyers, not just first time buyers, on properties worth up to 600,000. You cannot use it for buy-to-let purchases or second homes. Interest-only mortgages are also excluded.

While the scheme makes it possible to buy with a small deposit, keep in mind that borrowing at 95% LTV means higher interest rates compared to buyers who put down 10% or more. You will also have very little equity in the early years, which could be a risk if property prices fall.

If you are considering a 5% deposit mortgage, it is worth getting advice on whether this is the right time to buy or whether saving a larger first time buyer deposit could save you money over the long term. A whole-of-market broker can compare rates across all lenders offering 95% deals.

The right scheme depends on your financial situation, where you want to live and how quickly you need to buy. Here are some practical questions to help you decide:

• How much deposit do you have? If you have 5% or less, the mortgage guarantee scheme or shared ownership are likely your best options. If you have time to save, a Lifetime ISA gives you a free 25% bonus.
• Where do you want to buy? First Homes and shared ownership availability varies by area. In London and the South East, shared ownership is more widely available than First Homes.
• Do you want to own 100% from day one? If full ownership matters to you, shared ownership may not suit you because you start by owning a share and staircasing can take years.
• Are you a key worker? You may get priority access to First Homes in your local area, with discounts of up to 50%.

You can use more than one scheme at the same time. A common combination is using Lifetime ISA savings as your deposit on a shared ownership property, or pairing LISA savings with a 95% mortgage for a higher-value home.

Speaking to a mortgage advisor can help you understand which schemes you qualify for and which combination gives you the best outcome. Get matched with an advisor who specialises in first time buyer mortgages to compare your options.