Getting on the property ladder in the UK has never been easy. House prices continue to outpace wages in most regions, and saving a deposit is a huge challenge. The good news is that several government schemes exist to help first-time buyers. This guide explains each one, how they work, and which might suit you best.
Help to Buy ISA
The Help to Buy ISA was a popular savings account that gave first-time buyers a 25% government bonus when they used the funds to buy their first home. It is now closed to new applicants, but if you already have one, you can keep saving into it.
How It Works
- You save up to £200 per month (with an initial deposit of up to £1,200)
- The government adds a 25% bonus when you complete on your first home
- Bonus is capped at £3,000 (on savings of £12,000)
- Property must cost £250,000 or less (£450,000 in London)
- You must be 16 or over
- You can only use it for one property
Key Details
| Feature | Detail |
|---|---|
| Monthly saving limit | £200 |
| Maximum bonus | £3,000 |
| Minimum savings for bonus | £1,600 |
| Property price limit | £250,000 (£450,000 in London) |
| Availability | Closed to new applicants |
Pros and Cons
Pros:
- Free money from the government
- Simple to set up and manage
- Encourages regular saving
Cons:
- Closed to new applicants
- Lower property price cap than Lifetime ISA
- Monthly saving limit is low
- Bonus takes time to build up
Lifetime ISA (LISA)
The Lifetime ISA replaced the Help to Buy ISA for new applicants. It offers a bigger bonus and more flexibility, and is currently the most popular government scheme for first-time buyers.
How It Works
- You can save up to £4,000 per tax year
- The government adds a 25% bonus (up to £1,000 per year)
- You must be aged 18 to 39 to open one
- You can use it to buy your first home (up to £450,000) or save for retirement
- Withdrawals for any other purpose incur a 25% penalty (with some exceptions)
Key Details
| Feature | Detail |
|---|---|
| Annual saving limit | £4,000 |
| Maximum bonus per year | £1,000 |
| Property price limit | £450,000 |
| Age to open | 18-39 |
| Age to use for home | 12 months after opening |
| Available as | Cash LISA or Stocks & Shares LISA |
Pros and Cons
Pros:
- Higher annual bonus than Help to Buy ISA
- Can invest for potentially higher returns
- Can be used for retirement if you do not buy a home
- No monthly saving limit — contribute when you can
Cons:
- 25% penalty for unauthorised withdrawals
- Property price cap of £450,000 may be too low in expensive areas
- Must be open for 12 months before you can use it
- Counts towards your ISA allowance
Shared Ownership
Shared Ownership lets you buy a share of a property and pay rent on the rest. Over time, you can buy more shares until you own the whole property — a process called staircasing.
How It Works
- You buy between 25% and 75% of a property
- You pay rent on the remaining share to a housing association
- You can buy more shares over time (usually in 10% increments)
- When you own 100%, you stop paying rent
- You typically need a mortgage for your share (or buy with savings)
Key Details
| Feature | Detail |
|---|---|
| Minimum share | 25% |
| Maximum share | 75% |
| Who owns the rest | Housing association |
| Rent on remaining share | Usually 2.75% of the unsold share per year |
| Eligibility | Household income under £80,000 (£90,000 in London) |
| Property type | New-build or resale (via housing association) |
Pros and Cons
Pros:
- Smaller deposit needed (based on your share, not full price)
- Get on the ladder sooner
- Can staircase to full ownership over time
- Some schemes offer no rent or subsidised rent
Cons:
- You pay rent on the share you do not own
- Staircasing can be expensive (revaluation costs, legal fees)
- Harder to sell (housing association may have a buyer list)
- Your share may not increase in value as much as the full property
First Homes Scheme
The First Homes scheme offers new-build homes at a discount of at least 30% compared to market value. It is designed to help local first-time buyers stay in the communities where they live and work.
How It Works
- You buy a new-build home at 30% below market value (can be higher in some areas)
- The discount is locked in and applies when you resell
- You need a mortgage or savings for the discounted price
- Priority is given to first-time buyers with a local connection
Key Details
| Feature | Detail |
|---|---|
| Minimum discount | 30% |
| Maximum property price | Set locally (varies by area) |
| Income limit | £80,000 (£90,000 in London) |
| Local connection | Required (live or work in the area) |
| Available to | First-time buyers only |
Pros and Cons
Pros:
- No deposit assistance needed — the discount reduces the price directly
- Lower mortgage needed
- Property is yours outright (no rent, no shared ownership)
- Discount stays with the property when you resell
Cons:
- Limited availability (depends on local council and developer)
- New-build only — not available for existing homes
- Local connection requirement may restrict options
- Income limits apply
Comparison Table
| Feature | Help to Buy ISA | Lifetime ISA | Shared Ownership | First Homes |
|---|---|---|---|---|
| Deposit help | 25% bonus (max £3,000) | 25% bonus (max £1,000/year) | Smaller deposit needed | 30%+ discount on price |
| Property limit | £250,000 (£450k London) | £450,000 | Varies by area | Varies by area |
| Age limit | 16+ | 18-39 to open | 18+ | 18+ |
| Income limit | None | None | £80,000 (£90k London) | £80,000 (£90k London) |
| Monthly cost | Up to £200 | Up to £333/month | Rent on unsold share | Mortgage only |
| Availability | Closed to new applicants | Open | Open | Open (limited areas) |
| Can you own 100%? | Yes | Yes | Yes (via staircasing) | Yes |
Which Scheme Is Right for You?
Use a Lifetime If:
- You are aged 18-39 and buying your first home
- The property costs under £450,000
- You want the biggest government bonus available
- You want flexibility to save for retirement if you do not buy
Use Shared Ownership If:
- You cannot afford the full deposit for a property
- You want to get on the ladder now but cannot afford to buy outright
- You are happy to pay rent on the share you do not own
- You plan to staircase to full ownership over time
Use First Homes If:
- You want a straightforward discount with no rent
- You have a local connection to the area
- The property is a new-build
- Your household income is under £80,000 (£90,000 in London)
How to Apply
Lifetime ISA
- Open a Cash LISA or Stocks & Shares LISA with a provider (Moneybox, Skipton, AJ Bell)
- Save up to £4,000 per tax year
- The bonus is added automatically each month
- Use the funds when you complete on your first home
Shared Ownership
- Check eligibility with your local housing association
- Register on your local council’s housing list
- Apply for a shared ownership property when one becomes available
- Get a mortgage for your share (or use savings)
- Complete the purchase
First Homes
- Check availability in your area (contact your local council)
- Register your interest with the housing association or developer
- Apply when a First Homes property is released
- Get a mortgage for the discounted price
- Complete the purchase
Tips for First-Time Buyers
- Check all schemes before choosing — you may qualify for more than one
- Save into a LISA early — the 12-month waiting period means you need to plan ahead
- Use a mortgage broker — they can help you find deals that work with government schemes
- Budget for extra costs — stamp duty, solicitor fees, surveys, and moving costs add up
- Do not overstretch — just because you can borrow a certain amount does not mean you should
- Get your credit score in order — check your report 6 months before applying
- Consider future resale — some schemes make it harder to sell (Shared Ownership)
Summary
The UK government offers several schemes to help first-time buyers get on the property ladder. The Lifetime ISA is the most accessible, offering a 25% bonus on savings up to £4,000 per year. Shared Ownership helps those who cannot afford a full deposit, while First Homes provides a direct discount for local buyers. Each scheme has its own rules and limitations, so check your eligibility carefully and choose the one that fits your situation best.