A first-time buyer scheme is an initiative designed to help new buyers overcome affordability challenges and access the property ladder. Current schemes include Shared Ownership, First Homes, Rent to Buy, and the Mortgage Guarantee Scheme, each operating differently depending on your financial situation and location.

Current UK First-Time Buyer Schemes in 2025

1. First Homes Scheme

The First Homes Scheme represents one of the most generous government initiatives for local buyers and key workers.

How It Works: The scheme offers 30% to 50% discounts on new-build homes in England. What makes this particularly attractive is that the discount remains with the property permanently—when you sell, the next eligible buyer receives the same percentage reduction.

Eligibility Criteria: You must be a first-time buyer earning no more than £80,000 annually before tax (£90,000 in London). The property must cost no more than £250,000 after the discount is applied, or £420,000 in London. You must also secure a mortgage covering at least half the property’s price and demonstrate a local connection to the area.

Regional Nuances: The scheme operates exclusively in England. Local councils may prioritize key workers, existing residents, or those on lower incomes, with exemptions available for armed forces personnel and their families.

Pros:

• Substantial upfront savings with permanent discounts
• Full ownership from day one
• Lower mortgage payments due to reduced purchase price
• Smaller deposit requirements

Cons:

• Availability is very limited, with no centrally held database of properties
• New-build properties only
• Must pass discount onto future buyers, potentially limiting resale value
• Strict income and price caps may exclude some buyers

How to Apply: Search for First Homes properties through local housing associations and developers. Applications typically go through the selling developer, who will verify your eligibility against local authority criteria.

2. Shared Ownership

Shared Ownership offers a middle ground between renting and buying, allowing you to step onto the property ladder with a smaller initial investment.

How It Works: You purchase a share between 10% and 75% of the home’s market value, paying rent on the remaining portion owned by a housing association. Over time, you can buy additional shares through “staircasing” until you own the property outright.

Eligibility Criteria: You must earn less than £80,000 per year as a household (£90,000 in London) and typically be one of the following: a first-time buyer, someone who previously owned but can no longer afford a home, an existing shared owner wanting to move, or someone forming a new household.

Regional Variations:

• England: Standard scheme with 10-75% initial shares
• Scotland: Two schemes—New Supply Shared Equity and Open Market Shared Equity
• Wales: Shared Ownership Wales requires buyers to have a combined household income of £60,000 or less
• Northern Ireland: Co-Ownership scheme operates similarly

Pros:

• Lower deposit requirements as you only need a deposit on your share rather than the full market value
• More accessible mortgages with lower income requirements
• Often exempt from stamp duty if the share purchased is below the threshold
• Can increase ownership gradually as finances improve
• Typical rent charged is around 2.75% on the housing association’s share

Cons:

• Rent and service charges can rise over time
• Paying both rent and mortgage simultaneously
• Selling involves paying marketing fees to the housing association and may require finding a buyer who meets eligibility criteria
• Fewer mortgage lenders offer Shared Ownership products
• Leasehold properties with associated service charges
• Some shared owners have faced paying 100% of remediation works despite only owning a fraction of their properties in cases involving building safety issues

How to Apply: Register with local housing associations or use the government’s Help to Buy agent locator. You’ll need to provide proof of income, undergo affordability assessments, and meet specific criteria set by the housing association.

3. Mortgage Guarantee Scheme

The permanent Mortgage Guarantee Scheme launched in July 2025, replacing the previous temporary scheme to help buyers purchase with just a 5% deposit.

How It Works: The government provides backing to lenders, encouraging them to offer 95% loan-to-value mortgages. This reduces lender risk and makes high-LTV borrowing more accessible.

Eligibility Criteria: The property must cost £600,000 or less and be for residential use as your main residence. Unlike many schemes, this isn’t limited to first-time buyers—existing homeowners moving home can also benefit.

Pros:

• Only 5% deposit required
• Available to both first-time buyers and home movers
• No restrictions on property type (new-build or resale)
• More than 53,000 mortgages have been completed with help from the scheme

Cons:

• Doesn’t reduce property prices or monthly payments—just increases access
• Interest rates on 95% mortgages tend to be higher
• Requires strong affordability checks
• Standard mortgage requirements still apply

How to Apply: Approach participating lenders directly or work with a mortgage broker. You’ll need to meet standard mortgage criteria and demonstrate affordability for a 95% LTV mortgage.

4. Lifetime ISA (LISA)

The Lifetime ISA is a savings account designed specifically for first-time buyers and retirement planning.

How It Works: You can save up to £4,000 per year, and the government adds a 25% bonus—up to £1,000 annually. This means every £4 you save becomes £5.

Eligibility Criteria: You must be between 18 and 39 to open a LISA, but can continue contributing until age 50. The property must cost £450,000 or less.

Pros:

• 25% government bonus significantly boosts savings
• Can be used alongside partner’s LISA for the same property
• Flexibility to save for retirement if homeownership plans change

Cons:

• 25% penalty for withdrawals not used for first home or retirement after age 60
• £450,000 property cap hasn’t increased since launch
• Takes time to build substantial savings

How to Apply: Open a Lifetime ISA through banks, building societies, or investment platforms. Start contributing as early as possible to maximize the government bonus.

5. Right to Buy Mortgages

Right to Buy allows council tenants to purchase the home they’re renting at a substantial discount.

How It Works: The scheme provides large discounts for council tenants to buy their rented homes, available in England only. Maximum discounts are £96,000 across England and £127,900 in London, with amounts depending on tenancy length.

Eligibility Criteria: You must be 18 or over, have been a public sector tenant for at least three years (not necessarily consecutively), and the property must be your main home. The property cannot be sheltered housing or scheduled for demolition.

Regional Availability:

• England: Fully operational
• Scotland: Abolished in 2016
• Wales: Abolished in 2019
• Northern Ireland: Similar scheme for Housing Executive tenants

Pros:

• Some lenders now offer zero deposit mortgages for Right to Buy, using the discount in place of a direct deposit
• Substantial discounts reduce overall cost
• No moving expenses as you’re already living in the property
• Immediate homeownership

Cons:

• Must repay some or all of the discount if selling within five years of purchase
• Must offer property back to previous landlord first if selling within 10 years
• Not all lenders offer Right to Buy mortgages
• Some properties excluded (rural areas, specific property types)
• Additional costs for maintenance, insurance, and repairs previously covered by landlord

How to Apply: Complete the Right to Buy application form and send it to your landlord. If approved, you’ll receive an offer outlining the purchase price and terms. Then approach specialist Right to Buy mortgage lenders or work with a broker.

6. Rent to Buy

Rent to Buy allows you to rent a property at approximately 20% below market rent, with the intention of buying after a set period.

How It Works: The rent reduction helps you save for a deposit while living in the property you intend to purchase. After typically 5 years, you have the option to buy.

Pros:

• Below-market rent aids deposit saving
• Opportunity to “try before you buy”
• Already familiar with the property and area when purchasing

Cons:

• Limited availability
• No guarantee of being able to purchase at the end
• Property values may increase during rental period
• May lose savings if unable to complete purchase