Key Takeaway: Government-backed schemes help UK first-time buyers and those with smaller deposits get on the property ladder. Shared ownership lets you buy a share of a home (typically 25% to 75%) and pay rent on the remainder, while the Lifetime ISA offers a 25% government bonus on savings towards your first home. The original Help to Buy equity loan closed to new applications in 2023, but these alternatives remain available for buyers who need support with affordability.

Introduction

Buying your first home in the UK can feel out of reach when you are facing high property prices and large deposit requirements. Government-backed schemes exist to bridge this gap, particularly for first-time buyers and those on moderate incomes. Shared ownership and Lifetime ISAs are the main routes available today, following the closure of the Help to Buy equity loan scheme. Understanding how these work, who qualifies, and what the costs are can help you decide whether they suit your circumstances.

1. What Shared Ownership Is and How It Works

Shared ownership allows you to buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share owned by a housing association. You take out a mortgage on the share you buy, then pay rent on the rest at a reduced rate (typically 2.75% per year of the housing association’s share).

You can increase your share over time through a process called staircasing, buying additional slices of 10% or more until you own the property outright. The scheme is designed for first-time buyers, existing shared owners moving home, and those who have owned a home before but cannot afford to buy now. According to MoneyHelper, shared ownership homes are sold at a discount compared to full market value, making the initial deposit and mortgage more affordable.

2. What the Lifetime ISA Offers for First-Time Buyers

The Lifetime ISA (LISA) is a tax-free savings account for UK residents aged 18 to 39. You can save up to £4,000 per year, and the government adds a 25% bonus on top (up to £1,000 per year). You can use the money towards buying your first home (worth up to £450,000) or keep it for retirement after age 60.

To use the LISA for a home purchase, you must have held the account for at least 12 months, and your solicitor claims the bonus on completion (GOV.UK, 2026). The property must be purchased with a mortgage, and you must be a first-time buyer. If you withdraw the money for any reason other than buying a first home or retirement, you face a 25% withdrawal charge, which means you lose the bonus and a portion of your own savings.

3. How Help to Buy Worked and What Replaced It

The Help to Buy equity loan scheme closed to new applications on 31 October 2022 in England (it closed earlier in Scotland and Wales, and never launched in Northern Ireland). Under the scheme, the government lent you up to 20% of the property price (40% in London) interest-free for the first five years, reducing the deposit and mortgage you needed.

Buyers who took out a Help to Buy loan before the closure are still repaying it, with interest charged from year six onwards. No direct replacement scheme has launched at the national level as of 2026, but shared ownership and the Lifetime ISA remain the primary government-backed routes for first-time buyers. Some local authorities and housing associations offer their own affordability schemes, so check with your local council if you need support.

4. Who Qualifies for Shared Ownership

To buy a shared ownership home, you must meet specific eligibility criteria. Your household income must be £80,000 or less per year (£90,000 or less in London). You must be a first-time buyer, an existing shared owner looking to move, or someone who used to own a home but cannot afford to buy one now.

Read also: A First-Time Buyer’s Guide to Getting a Mortgage in the UK

Priority is often given to people with a local connection to the area, members of the armed forces, and those in housing need. The property must be your only home and you cannot sublet it. You apply through the local housing association managing the development, and you may need to register on your local council’s housing list. Affordability assessments work the same way as a standard mortgage, so the lender checks your income, credit file, and outgoings before approving your mortgage on the share you buy.

5. The Costs and Fees You Should Expect

Shared ownership comes with several costs beyond the deposit and mortgage. You pay rent on the housing association’s share, service charges (for communal areas and maintenance), and buildings insurance. When you staircase to buy more of the property, you pay valuation and legal fees each time.

Early shared ownership leases sometimes included clauses that increased the rent annually by a high percentage (up to RPI plus 0.5% or more), which caused affordability problems for some buyers. Newer leases cap rent increases more fairly, but read your lease carefully before buying. Stamp duty land tax (SDLT) rules vary: if you buy an initial share worth less than £40,000, you may defer SDLT until you staircase to 80% or more, at which point you pay on the full market value. Alternatively, you can elect to pay SDLT on the market value upfront, which may be cheaper if the property value rises significantly.

6. The Pros and Cons to Consider

Shared ownership reduces the deposit and mortgage you need upfront, making it easier to buy in expensive areas. You benefit from any increase in the property value on your share, and you can staircase to full ownership over time. The scheme is backed by registered housing associations, offering some security.

However, you pay both a mortgage and rent, plus service charges, which can add up. Selling a shared ownership property can take longer because the housing association has the right to find a buyer first (typically for eight weeks). You are responsible for all repairs and maintenance, even though you only own part of the property. Staircasing costs money each time, and rent can increase annually, squeezing affordability. Shared ownership suits buyers who prioritise getting on the ladder now over long-term flexibility, and who are comfortable with the ongoing costs.

Conclusion

Shared ownership and the Lifetime ISA are the main government-backed routes for UK first-time buyers following the end of Help to Buy equity loans. Shared ownership reduces the upfront cost by letting you buy a share and rent the rest, while the LISA offers a 25% savings bonus. Each scheme has specific eligibility rules, costs, and trade-offs. Check whether your income, location, and long-term plans fit the scheme before committing, and compare the total monthly cost (mortgage, rent, service charge) against renting or saving for a larger deposit. Speak to an FCA-authorised mortgage adviser to confirm affordability and explore all your options, including any local authority schemes in your area.

Financial Disclaimer: This article provides general educational information about UK home buying schemes and is not regulated mortgage advice or personalised financial, legal, or tax advice. Refisage is not authorised by the Financial Conduct Authority (FCA). Eligibility, costs, and scheme rules vary by housing association, lender, and your personal circumstances. Stamp duty and local schemes differ across England, Scotland, Wales, and Northern Ireland. Your home may be repossessed if you do not keep up repayments on your mortgage. Speak to an FCA-authorised mortgage adviser or visit MoneyHelper for guidance tailored to your situation before making any decisions.