Buying your first home in the UK has never been straightforward, and the landscape of government support schemes keeps shifting. Help to Buy Equity Loans closed in 2023, stamp duty thresholds changed in April 2025, and a new permanent Mortgage Guarantee Scheme launched in July 2025.
The good news is that several valuable schemes remain open to first-time buyers in 2026. This guide covers every current option, from the Lifetime ISA to Shared Ownership, with real eligibility criteria, income caps, and practical tips on combining schemes to maximise your savings.
Key Takeaway
In 2026, UK first-time buyers can access five main government-backed schemes: Shared Ownership (buy a 10-75% share with a smaller deposit), First Homes (30-50% discount on new builds), Lifetime ISAs (25% bonus worth up to 1,000 pounds per year), the permanent Mortgage Guarantee Scheme (buy with just a 5% deposit), and stamp duty relief (zero tax on the first 300,000 pounds). Household income caps of 80,000 pounds (90,000 pounds in London) apply to most schemes.
Quick Comparison: All Schemes at a Glance
Before diving into the detail, here is how the five main schemes compare on the points that matter most: how they reduce your costs, who qualifies, and what types of property are eligible.
| Scheme | How It Helps | Income Cap | Property Types |
|---|---|---|---|
| Shared Ownership | Buy 10-75% share, rent the rest | 80,000 (90,000 London) | New builds and resales |
| First Homes | 30-50% discount on market value | 80,000 (90,000 London) | New builds (England only) |
| Lifetime ISA | 25% bonus on savings (up to 1,000/year) | None (age 18-39 to open) | Any property up to 450,000 |
| Mortgage Guarantee | Buy with 5% deposit | None | Any property up to 600,000 |
| Stamp Duty Relief | 0% on first 300,000 | None | Any property up to 500,000 |
Sources: GOV.UK Shared Ownership, GOV.UK First Homes, GOV.UK Mortgage Guarantee, HMRC SDLT Rates
First Homes Scheme: 30-50% Discount on New Builds
The First Homes scheme gives first-time buyers and key workers a minimum 30% discount on new-build homes in England. Unlike Shared Ownership, you own 100% of the property and pay no rent on any portion. The discount stays with the property permanently and must be passed on to the next eligible buyer when you sell.
Eligibility Criteria
- Must be a first-time buyer (never owned property anywhere in the world)
- Household income under 80,000 pounds (90,000 pounds in London)
- Must get a mortgage for at least 50% of the discounted price
- Aged 18 or over
- Discounted price must not exceed 250,000 pounds (420,000 pounds in London)
- Must be your main residence (no buy-to-let)
How the Discount Works
Local authorities can increase the minimum 30% discount to 40% or even 50% in their area. Key workers (NHS staff, teachers, police, emergency services) and people with local connections often get priority access.
| Market Value | 30% Discount Price | 40% Discount Price | 50% Discount Price |
|---|---|---|---|
| 200,000 | 140,000 | 120,000 | 100,000 |
| 250,000 | 175,000 | 150,000 | 125,000 |
| 300,000 | 210,000 | 180,000 | 150,000 |
| 350,000 | 245,000 | 210,000 | 175,000 |
Source: GOV.UK First Homes Scheme
Important: First Homes availability is limited and varies by area. Not all new-build developments participate. Check your local authority housing team or search developer websites for participating schemes near you.
Lifetime ISA (LISA): 25% Government Bonus on Your Savings
The Lifetime ISA remains one of the most generous savings tools for first-time buyers. For every 4 pounds you save, the government adds 1 pound on top, up to a maximum bonus of 1,000 pounds per year. If you save the maximum 4,000 pounds each year from age 18 to 50, you could accumulate 32,000 pounds in government bonuses alone.
How It Works
- Open between ages 18-39 (you can keep contributing until 50)
- Save up to 4,000 pounds per tax year
- 25% government bonus added monthly (paid in the month following your contribution)
- Property must cost 450,000 pounds or less
- LISA must be open for at least 12 months before you use it to buy
- Choose cash or stocks and shares LISA (cash is safer for short-term buyers)
Important: Withdrawing LISA funds for anything other than your first home or retirement incurs a 25% penalty. This means you lose your government bonus plus 6.25% of your own contributions. Only use a LISA if you are confident you will buy within the 450,000 pound limit.
For a detailed comparison with the older Help to Buy ISA, read our Help to Buy ISA vs Lifetime ISA guide.
Mortgage Guarantee Scheme: Buy with a 5% Deposit
The government launched a new, permanent Mortgage Guarantee Scheme in July 2025, replacing the previous temporary version. It provides participating lenders with a government-backed guarantee, encouraging them to offer 95% loan-to-value mortgages to buyers with a deposit as small as 5%.
According to GOV.UK, the previous temporary scheme helped over 44,000 households get on the property ladder since 2021. The permanent version removes the stop-start uncertainty that came with temporary extensions.
Key Details
- Not limited to first-time buyers (home movers can use it too)
- Property value up to 600,000 pounds
- Available through participating lenders (not all offer it)
- You still need to pass standard affordability checks
- A good credit score is important since 95% mortgages carry higher risk for lenders
According to HomeOwners Alliance, many lenders now offer 5% deposit mortgages without using the scheme, so availability of low-deposit products is at its highest level in nearly 20 years. According to Comfort Estates, the average first-time buyer deposit in 2024 was 61,090 pounds (roughly 20%), but 5-10% deposit products are now widely accessible.
Use our mortgage calculator to see what you could borrow with a 5% deposit.
Stamp Duty Relief for First-Time Buyers (2026 Rates)
First-time buyers in England and Northern Ireland benefit from reduced stamp duty rates. From April 2025, the thresholds reverted to lower levels after the temporary pandemic-era increases expired.
| Purchase Price Band | SDLT Rate | Tax on 350,000 Property |
|---|---|---|
| Up to 300,000 | 0% | 0 |
| 300,001 to 500,000 | 5% | 2,500 |
| Over 500,000 | Standard rates apply (no FTB relief) | N/A |
Source: HMRC Stamp Duty Land Tax Rates (current as of March 2026)
A first-time buyer purchasing at 350,000 pounds pays just 2,500 pounds in stamp duty (5% on the 50,000 above the 300,000 threshold). Before April 2025, that same purchase attracted zero stamp duty. Use our stamp duty calculator to check your exact liability.
Tip: According to Nationwide, a 10% deposit on a typical UK first-time buyer property is around 23,000 pounds, but this varies dramatically by region, from 13,100 pounds in the North East to 44,800 pounds in London.
Combining Schemes Together
Several schemes can be used together, which is where the real savings stack up. Here are the most common combinations:
- Lifetime ISA + Stamp Duty Relief: Use your LISA bonus towards your deposit and save on stamp duty. This combination works with any property under 450,000 pounds.
- Shared Ownership + Lifetime ISA: Your LISA funds can go towards the deposit on your share. Since your share value is lower than the full property price, the 450,000 pound LISA limit is rarely an issue.
- First Homes + Lifetime ISA: Use your LISA savings towards the deposit on a First Homes property. The discounted price makes this combination particularly powerful.
- Mortgage Guarantee + Stamp Duty Relief: Buy with a 5% deposit under the scheme and benefit from stamp duty relief on properties under 500,000 pounds.
Important: You cannot use Shared Ownership and First Homes together on the same property. These are separate ownership models. You also cannot use a Help to Buy ISA and a Lifetime ISA together for the same purchase (though the Help to Buy ISA is now closed to new applicants).
Which Scheme Is Right for You?
The best scheme depends on your deposit savings, income, and where you want to buy. Here is a quick decision guide:
- Small deposit, moderate income: Start with a Lifetime ISA now and target the Mortgage Guarantee Scheme when you are ready to buy. Stamp duty relief applies automatically.
- Very low deposit, below income cap: Shared Ownership offers the lowest entry point, with deposits from 5% of a 10-25% share.
- Key worker or local connection: Check First Homes availability in your area first. The 30-50% discount is the most generous scheme available.
- Buying above 450,000 pounds: The LISA cannot be used, but the Mortgage Guarantee Scheme covers properties up to 600,000 pounds. Stamp duty relief applies up to 500,000 pounds.
For a broader overview of the entire buying journey, see our complete guide to buying your first home in the UK.
Key Terms Explained
- Shared Ownership
- A government-backed scheme where you buy a share of a home (typically 25-75%) and pay rent on the remaining portion to a housing association. You can increase your share over time through staircasing.
- Staircasing
- The process of buying additional shares in a Shared Ownership property. Each time you staircase, you own a larger percentage and pay less rent. Once you reach 100%, you own the home outright.
- Lifetime ISA (LISA)
- A tax-free savings account for people aged 18-39, offering a 25% government bonus on contributions up to 4,000 pounds per year. Can be used towards a first home purchase (up to 450,000 pounds) or retirement.
- Loan-to-Value (LTV)
- The ratio between the mortgage amount and the property value, expressed as a percentage. A 95% LTV mortgage means you borrow 95% of the property value and put down a 5% deposit.
- Stamp Duty Land Tax (SDLT)
- A tax paid on property purchases in England and Northern Ireland. First-time buyers receive relief, paying 0% on the first 300,000 pounds and 5% on the portion between 300,001 and 500,000 pounds.
See our full Property Glossary for 60+ UK property terms explained.
Sources
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Explore Our CalculatorsFrequently Asked Questions
What government schemes are available for first-time buyers in the UK in 2026?
In 2026, UK first-time buyers can access Shared Ownership (buy 10-75% of a home), the First Homes scheme (30-50% discount on new builds), Lifetime ISAs (25% government bonus up to 1,000 pounds per year), the permanent Mortgage Guarantee Scheme (5% deposit mortgages), and stamp duty relief (zero tax on the first 300,000 pounds).
Can I use a Lifetime ISA to buy my first home?
Yes. If you are aged 18-39, you can open a Lifetime ISA, save up to 4,000 pounds per year, and receive a 25% government bonus (up to 1,000 pounds annually). The property must cost 450,000 pounds or less, and the LISA must be open for at least 12 months before you use it to buy.
What is the First Homes scheme and how much discount do you get?
The First Homes scheme offers first-time buyers a minimum 30% discount on new-build homes in England. Local authorities can increase this to 40% or 50%. The discounted price must not exceed 250,000 pounds (420,000 pounds in London). You own 100% of the property and pay no rent.
How does Shared Ownership work in 2026?
With Shared Ownership, you buy a share of a home (typically 25-75%) and pay subsidised rent on the rest. Your deposit is based only on your share, making it significantly smaller. Over time, you can buy more shares (called staircasing) until you own the property outright. Household income must be 80,000 pounds or less (90,000 pounds in London).
Do first-time buyers pay stamp duty in 2026?
First-time buyers in England and Northern Ireland pay zero stamp duty on the first 300,000 pounds of a property purchase. You pay 5% on the portion between 300,001 and 500,000 pounds. If the property costs more than 500,000 pounds, first-time buyer relief does not apply and standard rates are charged instead.
