GOVERNMENT SCHEMES 2026

Every Government Scheme for First-Time Buyers Decoded — 2026 Edition

By Álvaro Abreu · May 2026 · 16 min read

The UK government offers several schemes designed to help first-time buyers get on the property ladder. The problem isn't that these schemes don't exist — it's that they're scattered across different departments, explained in bureaucratic language, and constantly changing. Here's every current scheme decoded into plain English.

This article covers schemes available in 2026 for first-time buyers in England. Scotland, Wales, and Northern Ireland each have their own programmes (Scotland's LBTT relief, Wales's Help to Buy Wales, etc.). Where relevant, we'll note the key differences, but the detailed focus is on England.

We've also included the Lloyds £5k Deposit Mortgage, which isn't technically a government scheme but has become such a significant part of the first-time buyer landscape in 2026 that excluding it would leave an obvious gap.

1. THE LIFETIME ISA (LISA)

The LISA is the most straightforward scheme available and the one most frequently underutilised. You open an account, deposit up to £4,000 per tax year, and the government adds 25% on top — that's up to £1,000 of genuinely free money each year.

The maths is compelling. If you open a LISA at 25 and buy at 30, contributing £4,000 each year, you'll have accumulated £20,000 in personal savings plus £5,000 in government bonuses. Even contributing less — say £200 per month (£2,400/year) — generates £600 in annual bonuses for doing nothing beyond saving.

The 12-month rule: Your LISA must be open for at least 12 months before you can use it to buy a property. This catches people out. If you open a LISA and find a property two months later, you cannot use the LISA funds for that purchase. Open one today, even with a nominal amount, to start the clock.

The £450,000 cap: You can only use a LISA for properties costing £450,000 or less. In London and the South East, this is a genuine constraint. However, for first-time buyers in most of England, the cap covers the majority of suitable properties.

The withdrawal penalty: If you withdraw LISA funds for anything other than a qualifying property purchase or retirement (after 60), you pay a 25% penalty on the withdrawal. Because of how the maths works, you actually lose 6.25% of your original contribution, not just the bonus. This penalty makes the LISA unsuitable for people who might need the money for other purposes.

Cash LISA vs Stocks & Shares LISA: If you're buying within 1–3 years, a Cash LISA is safer — your money won't fluctuate with markets. If your timeline is 5+ years, a Stocks & Shares LISA has historically produced higher returns, but with the risk that your investments could be worth less when you need them.

2. SHARED OWNERSHIP

Shared Ownership is the most misunderstood scheme on this list. Many first-time buyers dismiss it as "not really owning" or assume the rent-plus-mortgage combination is poor value. In reality, for buyers in areas where full ownership is unaffordable, Shared Ownership can be the difference between being a homeowner and being a permanent renter.

Here's how it works: you buy a percentage share of a property (minimum 25%) and pay rent on the remaining share to a housing association. You take out a mortgage for the share you buy and pay a deposit on that share only.

Example: A property worth £250,000. You buy a 40% share (£100,000). Your mortgage is on £100,000, and your deposit is 5% of that — £5,000. You pay rent on the remaining 60% (£150,000 x 2.75% = £4,125/year = roughly £344/month). Your total monthly cost is the mortgage on £100,000 plus £344 rent, which for many buyers is significantly less than a mortgage on the full £250,000.

Staircasing: Over time, you can buy additional shares — known as "staircasing." Each time you buy more, the remaining rent decreases. Eventually, you can own 100% and pay no rent at all. Each staircasing step requires a new valuation and potentially a new mortgage, but it's a structured path to full ownership.

The drawbacks: Selling a Shared Ownership property is more complex than selling a standard property. The housing association typically has first right of refusal to find a buyer. Service charges can be high, and you're responsible for 100% of maintenance costs even if you only own 40%. Mortgage options are more limited — not all lenders offer Shared Ownership products, though the number has grown significantly.

3. FIRST HOMES

First Homes is a newer scheme that delivers genuinely significant discounts — 30% to 50% off the market price of new-build properties. The discount is locked into the property in perpetuity, meaning when you sell, the next buyer also gets the same percentage discount. This keeps the property permanently affordable.

The scheme is funded through developer contributions. When developers build new housing estates, a proportion of the homes must be sold as First Homes. This means availability is tied to new development in your area — if there's no new building, there are no First Homes.

Eligibility: You must be a first-time buyer, be aged 18 or over, and have a household income below £80,000 (£90,000 in London). Local councils can set additional criteria — many prioritise key workers (NHS, teachers, police, military) and people who already live or work in the area.

The reality check: First Homes availability is still limited. The scheme is growing, but in many areas the supply of First Homes properties is small relative to demand. Check with your local council and housing associations to see what's currently available or planned in your target area.

4. HELP TO BUILD: EQUITY LOAN

Help to Build is niche but powerful for the right buyer. If you've ever dreamed of designing and building your own home, or commissioning a custom-build on a plot of land, this scheme provides an equity loan of up to 20% of the total cost (land plus construction), interest-free for five years.

The process is more complex than a standard purchase. You need to find a plot of land, obtain planning permission, arrange a self-build mortgage (not all lenders offer these), and manage a construction project. The equity loan covers a portion of the cost, reducing the mortgage you need from a commercial lender.

This scheme is ideal for buyers in rural areas where land is available and property prices are lower, or for those who want a home tailored exactly to their needs. It's not suitable for buyers who want a straightforward, quick purchase — self-builds typically take 12–24 months from land purchase to moving in.

5. THE LLOYDS £5K DEPOSIT MORTGAGE

The Lloyds £5k Deposit Mortgage isn't a government scheme, but it's arguably had more practical impact on first-time buyer accessibility in 2026 than any government programme. By fixing the deposit at £5,000 regardless of property value (up to a cap), it effectively eliminates the deposit barrier that keeps many renters locked out of ownership.

On a £200,000 property, a traditional 5% deposit would be £10,000. A 10% deposit would be £20,000. The Lloyds product requires £5,000. For a buyer saving £300 per month, that's the difference between saving for 17 months versus 67 months. In many cases, it means buying now versus buying in five years.

The trade-off: A smaller deposit means a larger mortgage, which means a higher interest rate and more interest paid over the life of the loan. On a £195,000 mortgage (vs £190,000 with a 5% deposit), the additional cost over 25 years is modest. But compared to a £180,000 mortgage (10% deposit), the difference in total interest paid is more significant.

Negative equity risk: With only £5,000 of equity in the property at the outset, even a small drop in house prices could put you in negative equity — meaning you owe more than the property is worth. This doesn't affect you unless you need to sell, but it restricts your options if circumstances change.

The key question is whether the cost of waiting (continued rent, potential house price increases, opportunity cost of not building equity) outweighs the higher interest rate. For many first-time buyers in 2026, the answer is yes. But run the numbers for your specific situation.

6. STAMP DUTY FIRST-TIME BUYER RELIEF

First-time buyers in England and Northern Ireland pay no stamp duty on properties costing up to £425,000. For properties between £425,001 and £625,000, you pay 5% on the portion above £425,000 only. Above £625,000, you lose the first-time buyer relief entirely and pay the standard rates.

Example: Buy a property at £500,000 as a first-time buyer, and your stamp duty is 5% of £75,000 (the amount above £425,000) = £3,750. Buy the same property as a non-first-time buyer, and you'd pay considerably more under the standard rates.

Scotland uses a different system (LBTT) with its own first-time buyer relief, and Wales uses LTT. The thresholds and rates differ, so if you're buying in Scotland or Wales, check the specific rates that apply.

WHICH SCHEMES CAN YOU COMBINE?

This is the question the cheat sheet answers in a clear comparison table. In brief:

LISA + any purchase route: You can use LISA funds alongside a standard mortgage, Shared Ownership, or any other scheme. The LISA is a savings vehicle with a government bonus, not a mortgage product, so it stacks with everything.

Shared Ownership + LISA: Yes — use your LISA as part of the deposit on your purchased share.

First Homes + LISA: Yes — the LISA bonus applies to the discounted price.

Lloyds £5k Deposit + LISA: Technically yes, though if you only need a £5,000 deposit, the LISA's additional savings may exceed the minimum required. The LISA bonus is still free money — you could use it to increase your deposit, which would reduce your interest rate.

THE BOTTOM LINE ON SCHEMES

The UK government genuinely wants to help first-time buyers. The schemes are real, the money is real, and the benefits are significant. The barrier isn't access — it's awareness and understanding. Too many first-time buyers either don't know these schemes exist, don't understand how they work, or assume they won't qualify.

The single most impactful action you can take today, regardless of when you plan to buy, is opening a LISA. The 12-month clock starts immediately, and you'll benefit from the 25% bonus on every contribution. Even if you're not sure you'll buy within the LISA's £450,000 cap, the money isn't wasted — it counts toward retirement savings after 60.

For a full walkthrough of costs you'll face beyond the deposit, see our hidden costs guide. For common errors when using these schemes, read our mistakes to avoid article. And for the full review of the cheat sheet, visit our main review page.