Lifetime ISA (LISA)
The Lifetime ISA is the most widely useful scheme for first-time buyers under 40. You can put in up to £4,000 per year, and the government adds a 25% bonus, up to £1,000 per year. The money grows tax-free and can be used as part of your deposit when you buy a property worth up to £450,000.
You must be between 18 and 39 to open one. You can keep contributing until you are 50. Both of you can have a LISA if you are buying as a couple, so two buyers could receive up to £2,000 in bonuses per year between them.
The significant drawback: if you withdraw the money for anything other than buying your first home, terminal illness, or retirement, you pay a 25% penalty on the full withdrawal amount. Because the penalty applies to the whole sum including the bonus, you effectively lose some of your own savings too, not just the government top-up. Keep this money ringfenced until you complete.
The property must cost no more than £450,000. In London and high-cost areas this rules out a large proportion of properties. Check whether properties in your target area fall within this limit before opening one.
First Homes scheme
First Homes provides new build properties at a minimum 30% discount to eligible first-time buyers. Some local authorities offer 40% or 50% discounts. The discount is funded by developers, required as a planning condition on new developments.
To qualify you need to be a first-time buyer, earn no more than £80,000 per year as a household (£90,000 in London), and in some areas meet a local connection requirement. The property price after discount must not exceed £250,000 (£420,000 in London).
The discount is permanent and travels with the property. When you sell, you must sell at the same percentage discount to another eligible buyer. This limits your future buyer pool but also means the discount is locked in for future owners, not just you.
Availability is limited and patchy. You can only buy through this scheme if a local developer has properties allocated to it. Check with developers in your area and ask estate agents whether any properties are First Homes allocations.
Shared Ownership
Shared Ownership lets you buy between 10% and 75% of a property and pay rent on the remaining share to a housing association. You only need a deposit on the share you buy, which makes the upfront cost significantly lower than buying outright.
You can buy additional shares over time in a process called staircasing. In most cases you can eventually reach 100% ownership, at which point rent stops.
The catch is the ongoing cost. You pay a mortgage on the share you own plus rent on the rest. The total monthly outgoing is often comparable to buying outright, sometimes higher. The rent can also increase annually. Run the numbers carefully before assuming Shared Ownership is cheaper than buying on the open market.
Shared Ownership properties are always leasehold. Some also have service charges. Read the lease carefully before committing.
Mortgage Guarantee Scheme
The Mortgage Guarantee Scheme allows lenders to offer 95% LTV mortgages with a government guarantee backing part of the loan. It is designed to encourage lenders to lend at 95% LTV who might otherwise not offer it.
From a buyer's perspective, you apply for the mortgage in the normal way. The scheme operates in the background between the lender and the government. You do not apply for the guarantee directly. Participating lenders include most of the major high street banks.
Rates at 95% LTV are higher than at lower LTV ratios. The scheme makes 95% mortgages available, not cheap.
Module 9 covers first-time buyer schemes in detail alongside seven common mortgage myths worth knowing before you speak to a broker.
Read module 9Which scheme is right for you?
Most first-time buyers in 2026 are best served by opening a Lifetime ISA as early as possible and maximising the government bonus while saving. If you are searching in London or the South East where the £450,000 cap is a problem, it is less useful.
First Homes is worth asking about if you are open to a new build and your household income is under the cap. Shared Ownership works for some buyers in high-cost areas but requires careful calculation of the total monthly cost.
None of these schemes are compulsory. Many first-time buyers buy on the open market with a conventional mortgage and a saved deposit. The schemes exist to help in specific situations, not as the only route to ownership.