Help to Buy Schemes: Government Assistance for First-Time Buyers in the UK

Government Schemes for First-time Home Buyers

Many government-sponsored assistance schemes are available for first-time homebuyers ranging from mortgage guarantee schemes to shared ownership. Let’s discuss some of the common help-to-buy schemes in the UK.

Mortgage Guarantee Scheme: To Support Dream of Home Ownership

Mortgage Guarantee scheme is available for first-time homebuyers in the UK and assures mortgage lenders with a Guarantee on up to 95% of home loans. This help-to-buy scheme is available for all types of new homes valued under £600,000. This program is aimed to increase access to easy home mortgages as borrowers need low deposits and lenders pay 95% Loan-to-value mortgage products. This assistance scheme is open until 30 June 2025.

2. Shared Ownership: An Affordable Option to Own a Home

The shared ownership scheme is another help-to-buy program for homebuyers to own a house in the UK. Under this scheme, a buyer can purchase only a share of a property ranging between 25%-75% and pay rent for the rest of the share. This program enables a buyer to purchase a residential property from a housing association or private developer by paying for a portion of the property and taking the remaining portion on rent. The rent is charged at low rates and buying is affordable as a buyer can pay as low as 25% share only. This assistance scheme also empowers a buyer to deposit only 5% of the share as the initial deposit.

3. First Homes Scheme: Buy House on Discount

This is a popular home assistance program for first-time buyers available only in England. This scheme allows a buyer to purchase a house at 30% to 50% discount rates. This program has certain eligibility criteria to meet and is available only for eligible first-time buyers. A home should be a newly built property by a developer and a buyer should not have annual earnings above £80,000. Local key workers are given preference under this scheme and eligibility is typically determined by the local council.

4. Lifetime Individual Savings Account

Lifetime Individual Savings Account also known as LISA, is a government-approved savings account that enables you to save for buying your first home. Prospective buyers can contribute up to £4000 each year into this account and the government will add a 25% bonus to it. Account holders can withdraw the amount to purchase a house valued at £450,000 or less.