Government schemes for first time buyers

It’s an exciting time in life when you’re ready to purchase a first home. Whether you’re living at home and ready to flee the nest or have been renting and want the stability homeownership offers, there are government schemes available to first-time buyers designed to make joining the property ladder easier.

What government schemes are available to first-time buyers?

There are several government schemes available to first-time buyers. There’s no simple answer as to which one is best, as they all suit a different purpose. So, read more as we teach you a little more about some of the government schemes on offer…

Help to Buy

First-time buyers will likely be aware that the almost decade-long Help to Buy scheme will be ending in October 2023.

Since its introduction in 2013, the equity loan scheme has been used to purchase 339,947 homes. In 2015, a Help to Buy ISA was introduced. Over 435,798 homes have been purchased using the ISA, it has been unavailable to new account holders since November 2019.

If you’re wanting to use the scheme, the time to act is now! Search for Help-to-Buy properties and consult an independent mortgage adviser to secure the best available mortgage deal.

Lifetime Individual Savings Account (LISA)

A Lifetime ISA lets you save up to £4,000 each tax year towards a first home or withdraw at retirement age. The state adds a 25% bonus on top of what you save. For example, if you were to save a maximum of £4,000 in one year, the government would contribute a hefty £1,000, FOR FREE. As well to this benefit, you’ll be earning interest on your savings AND it’s totally tax-free.

Shared Ownership

If you cannot afford to buy 100% of your first home, first-time buyers might be eligible to take advantage of a Shared Ownership property. The name explains is pretty self-explanatory! The property buyer will own a share of the property and rent the remaining share from a landlord. A landlord in this case means a housing association, a local council or a different organisation.

You will only require a mortgage on the share you own. The available owned share generally ranges from around 10% to 75%. You are welcome to purchase more shares in your home if your financial circumstances change. This process is known as staircasing and can be done in small or large increments to obtain 100% ownership. It’s not a mandatory feature of purchasing a Shared Ownership property. Speak to a mortgage adviser to learn if Shared Ownership is the right scheme for you.

First Homes

The First Homes scheme is a new initiative to help local first-time buyers and keyworkers get onto the property ladder. The homes available from the scheme are discounted by 30% compared to the market price. In some areas of the UK, the discount could be as high as 50%.

It works very similarly to the Help to Buy scheme in the sense that buyers will only require a 5% deposit, however, this is dependent on the mortgage eligibility of participating mortgage lenders.

Learn more about government schemes for first-time buyers

It’s worth noting that each of these schemes has different eligibility criteria. Speak to an experienced mortgage adviser to discuss your options.

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