Government Schemes for Home Buyers

The UK government offers several schemes designed to help people get onto the property ladder or move up it. These programmes target first-time buyers, key workers, and existing social housing tenants. Each scheme has different eligibility criteria, benefits, and limitations. This guide covers the main schemes currently available in England, helping you understand which ones you may be able to take advantage of.

It is worth noting that the Help to Buy Equity Loan scheme, which was one of the most popular government homebuying programmes, closed to new applications in October 2022 and completed its final transactions in March 2023. The schemes described below are the current alternatives available to buyers.

The Lifetime ISA is a savings account that offers a 25% government bonus on contributions of up to £4,000 per tax year, giving you a maximum annual bonus of £1,000. You can open a LISA if you are aged 18 to 39, and you can continue contributing until you turn 50. The funds can be used towards the purchase of your first home (worth up to £450,000) or for retirement after age 60.

The bonus is paid monthly (for cash LISAs) or when you sell investments (for stocks and shares LISAs). To use the funds for a home purchase, the account must have been open for at least 12 months. You can hold both a cash LISA and a Help to Save account, and the LISA can be used alongside other schemes such as shared ownership.

If you withdraw money from a LISA for any purpose other than buying your first home or retirement after 60, you will incur a 25% withdrawal penalty. This effectively means you lose your government bonus and pay a penalty on top, so the LISA should be treated as a dedicated home-buying or retirement savings vehicle.

First Homes is a scheme that offers new-build properties to first-time buyers at a discount of at least 30% (and sometimes 40% or 50%) compared to the market value. The discount is passed on to future buyers when you sell, ensuring the property remains affordable in perpetuity. After the discount, the price must not exceed £250,000 (£420,000 in London).

To be eligible, you must be a first-time buyer, aged 18 or over, with a household income of no more than £80,000 (£90,000 in London). You must be able to secure a mortgage for at least 50% of the discounted price. Local councils may set additional criteria, such as prioritising key workers, people who live or work in the area, or those on lower incomes.

When you sell a First Home, the same percentage discount is applied to the market value at the time of sale. For example, if you bought at a 30% discount and the property is worth £300,000 when you sell, the buyer would pay £210,000. This restriction is secured by a legal covenant on the property.

Shared ownership allows you to buy a share of a property (between 25% and 75%) and pay rent on the remainder. This significantly reduces the deposit and mortgage you need. Over time, you can buy additional shares ("staircase") up to full ownership.

Eligibility requires a household income of £80,000 or less (£90,000 in London), and you must be a first-time buyer or an existing shared owner. The scheme is available on new- build properties and some resale shared ownership homes through housing associations.

The new model shared ownership lease (from April 2021) includes a 10-year initial repair period during which the housing association covers repairs up to £500 per year, and allows staircasing in 1% increments for the first 15 years. For a full breakdown of how shared ownership works, see our dedicated shared ownership guide.

Right to Buy allows eligible council tenants in England to purchase their council home at a discount. The discount depends on the type of property, how long you have been a tenant, and the property value. For houses, the maximum discount is £102,400 (£136,400 in London boroughs). For flats, the maximum discount is the same but calculated differently as a percentage of the property value.

To be eligible, you must be a secure tenant of a council or local authority property, your home must be self-contained, and it must be your only or main home. You usually need to have been a public sector tenant for at least three years (not necessarily in the same property or with the same landlord).

Housing association tenants may qualify for the Right to Acquire scheme instead, which offers a smaller discount (ranging from £9,000 to £16,000 depending on the region). The Preserved Right to Buy applies to former council tenants whose properties were transferred to a housing association.

Help to Save is a government-backed savings scheme for people on low incomes. If you receive Working Tax Credit or Universal Credit (with minimum earnings), you can save between £1 and £50 per month for four years. After two years, you receive a 50% bonus on the highest balance achieved (up to £600). After four years, you receive another 50% bonus on the increase in the highest balance since the two-year point (up to a further £600). The maximum total bonus is £1,200.

While Help to Save is not specifically a homebuying scheme, the savings and bonus can be used towards a deposit. It can be held alongside a Lifetime ISA, allowing you to benefit from both the LISA bonus and the Help to Save bonus simultaneously.

The Mortgage Guarantee Scheme encourages lenders to offer 95% loan-to-value (LTV) mortgages by providing a government guarantee on the portion of the mortgage above 80% LTV. This means you only need a 5% deposit, making homeownership more accessible.

The scheme is available to all buyers (not just first-time buyers) purchasing properties worth up to £600,000. It is available on repayment mortgages only (not interest-only) and cannot be used for buy-to-let or second homes. Many major lenders participate in the scheme, and products are available through standard mortgage channels.