Government Schemes for First-Time Home Buyers and Existing Homeowners in 2025

Getting onto the property ladder has never been straightforward, but here’s something many first-time buyers don’t realize: the UK government offers numerous schemes specifically designed to help you purchase your first home—or even move up the ladder as an existing homeowner.

From savings schemes that boost your deposit by 25% to programs that let you buy a share of a property and gradually increase your ownership, there are multiple pathways to home ownership that go far beyond traditional mortgages.

The challenge? These schemes vary significantly across England, Wales, Scotland, and Northern Ireland. Each has different eligibility criteria, benefits, and limitations. Some are designed exclusively for first-time buyers, while others support existing homeowners looking to move.

In this comprehensive guide, we’ll explore every major government scheme available in 2025, explain exactly how each one works, who qualifies, and most importantly—which might be right for your situation. Whether you’re saving for your first deposit or looking to understand affordable home ownership options, this guide will help you navigate the landscape.

Lifetime Individual Savings Account (LISA)

The Lifetime ISA remains one of the most valuable government schemes for first-time buyers in 2025. Think of it as a savings account where the government adds 25% to everything you save—up to £1,000 per year.

How the Lifetime ISA Works

You can save up to £4,000 per year into a Lifetime ISA, and the government will add a 25% bonus on top. That means if you save the maximum, you’ll receive an extra £1,000 annually—essentially free money toward your first home.

The key features include:

Age eligibility: You must be between 18 and 39 to open a Lifetime ISA, but once opened, you can continue contributing until age 50.

Maximum property value: The property you purchase must cost £450,000 or less. This applies across the UK, making it suitable for most first-time buyers outside of London’s most expensive postcodes.

Withdrawal rules: If you withdraw money for anything other than buying your first home or retirement (after age 60), you’ll face a 25% penalty—which effectively means losing your government bonus plus a bit more.

First-time buyer requirement: You must be a first-time buyer and intend to live in the property as your main residence.

Should You Consider a LISA?

Absolutely, if you’re planning to buy within the next few years and won’t need the money for anything else. The 25% government bonus is exceptional—you won’t find a better guaranteed return anywhere.

However, the withdrawal penalty makes this unsuitable if you might need access to your savings for emergencies. Many first-time buyers use a combination of a LISA for their core deposit savings and a standard savings account for their emergency fund.

Ready to maximize your deposit strategy? Our team can help you structure your savings alongside mortgage planning to ensure you’re making the most of government schemes. Contact us at paul.welch@millionplus.com for personalized advice.

Help to Buy ISA

While the Help to Buy ISA closed to new applicants in November 2019, if you already have one, you can continue saving until November 2029. This scheme offers similar benefits to the LISA but with different rules.

Help to Buy ISA Key Features

Monthly saving limit: You can save up to £200 per month (£2,400 annually).

Government bonus: Like the LISA, you receive a 25% bonus when you use the funds to purchase your first home. The maximum bonus is £3,000 (on savings of £12,000).

Property price cap: The property must cost £250,000 or less (£450,000 in London).

When you receive the bonus: Unlike the LISA where bonuses are added annually, Help to Buy ISA bonuses are paid when you complete on your property purchase.

LISA vs Help to Buy ISA

If you’re fortunate enough to have opened a Help to Buy ISA before it closed, you face a choice: continue with it or transfer to a LISA.

The LISA offers higher annual saving limits (£4,000 vs £2,400) and a higher property price cap (£450,000 everywhere vs £250,000/£450,000), making it the better option for most people. However, you cannot hold both and receive bonuses on both—you must choose one.

For detailed guidance on government savings schemes, visit the official GOV.UK Help to Buy ISA page.

Mortgage Guarantee Scheme (Freedom to Buy)

The Mortgage Guarantee Scheme, also known as “Freedom to Buy,” was introduced to help buyers purchase with just a 5% deposit by encouraging lenders to offer 95% loan-to-value mortgages.

How the Mortgage Guarantee Scheme Works

Previously, lenders were reluctant to offer high loan-to-value mortgages due to risk concerns. This scheme provides government backing to lenders, giving them confidence to offer 95% mortgages.

Deposit requirement: You need just 5% of the property value as a deposit.

Property price cap: The property must cost £600,000 or less.

First-time buyer status: This scheme is not limited to first-time buyers—existing homeowners moving home can also benefit.

Property type: The property must be for residential use (not buy-to-let) and you must intend to occupy it as your main residence.

Important Considerations

While a 5% deposit sounds attractive, remember that higher loan-to-value mortgages typically come with higher interest rates. A 95% mortgage will almost always have a higher rate than a 90% or 85% mortgage.

You’ll also need to demonstrate affordability. Lenders still conduct thorough affordability assessments, examining your income, credit history, and existing financial commitments.

Additionally, with only 5% equity, you’re more vulnerable to negative equity if property prices fall. This means you could owe more than your property is worth.

For many buyers, saving a larger deposit and accessing better mortgage rates proves more cost-effective long-term. However, the Mortgage Guarantee Scheme can work well if you have strong income but limited savings.

Exploring 95% mortgage options? Our mortgage specialists can compare rates across all lenders participating in the scheme and help you understand the true cost implications. Get in touch at paul.welch@millionplus.com.

Help to Buy – Wales

Wales operates its own version of Help to Buy, distinct from the English scheme (which closed in 2023). The Welsh Help to Buy scheme remains active and provides an equity loan to help with your deposit.

Welsh Help to Buy Details

Deposit requirement: You need a 5% deposit from your own funds.

Government equity loan: The Welsh government provides an equity loan of up to 20% of the property value, reducing your mortgage requirement to 75%.

Property price cap: The property must cost £300,000 or less.

New build requirement: This scheme only applies to new-build properties from registered builders.

Repayment mortgage requirement: You must have a repayment mortgage (not interest-only) for the 75% you’re borrowing.

Equity loan terms: The equity loan is interest-free for the first five years. After that, you pay interest at 1.75%, rising annually with inflation (RPI) plus 1%.

Who Benefits from Welsh Help to Buy?

This scheme works particularly well for buyers in Wales who:

• Have saved a 5% deposit but struggle with the remaining mortgage payments
• Are comfortable purchasing a new-build property
• Understand the equity loan will need repaying when they sell or remortgage
• Plan to increase their income over time (making future repayment easier)

Remember that when you sell, you repay the same percentage of your home’s value—not the original loan amount. If your property value increases, you’ll owe more. If it decreases, you’ll owe less.

For more information, visit the official Welsh Government Help to Buy page.

Homebuy – Wales

Separate from Help to Buy, Homebuy Wales helps you purchase existing properties (not just new builds) through a shared equity arrangement.

Homebuy Wales Key Features

Property type: Unlike Help to Buy Wales which focuses on new builds, Homebuy works with existing properties including houses and flats.

Equity loan: You receive an equity loan that reduces the mortgage you need, similar to Help to Buy.

Local eligibility: Each local authority in Wales sets its own eligibility criteria, so requirements vary depending on where you want to buy.

Income requirements: Generally designed for households with annual incomes below certain thresholds (typically £60,000, but this varies by area).

How to Apply for Homebuy Wales

Applications go through local authorities and registered social landlords. You’ll need to demonstrate:

• You cannot afford to purchase on the open market without assistance
• You have a housing need in the area
• You meet local connection requirements
• You have sufficient income to sustain mortgage payments

Homebuy Wales proves particularly valuable for those wanting to stay in their local community but finding market prices unaffordable. Contact your local authority housing department to check eligibility in your area.

Right to Buy and Right to Acquire (England)

Right to Buy is one of the longest-running government schemes, allowing council tenants to purchase the homes they’re renting at a significant discount.

Right to Buy Eligibility

To qualify for Right to Buy, you must be a secure council tenant who has rented from a local authority for at least three years. The three years don’t need to be continuous.

Discount Structure

The discount you receive depends on two factors: your property type and how long you’ve been a tenant.

For houses:

• 35% discount after 3 years
• Additional 1% for each extra year, up to a maximum discount of 70%
• Discount capped at £136,400 across England (£116,200 in some areas)

For flats:

• 50% discount after 3 years
• Additional 2% for each extra year, up to a maximum discount of 70%
• Same cash caps apply

Right to Acquire

Right to Acquire works similarly but applies to housing association properties rather than council properties. The discount is typically much smaller—usually £16,000 to £38,000 depending on your region.

Important Right to Buy Considerations

Resale restrictions: If you sell your Right to Buy property within five years, you may need to repay some or all of the discount. The amount decreases each year.

Property condition: You’re buying the property “as is,” which may mean significant repair costs. Get a thorough survey done.

Service charges: For flats, ongoing service charges can be substantial. Ensure you understand these costs before purchasing.

Eligibility verification: Your landlord will confirm your eligibility. The process typically takes several months.

For complete details on Right to Buy, consult the official GOV.UK Right to Buy page.

Considering Right to Buy? Understanding your mortgage options post-purchase is crucial. Our team can help you navigate the financing process and ensure you secure competitive rates. Reach out at paul.welch@millionplus.com.

House Sales Scheme (Northern Ireland)

Northern Ireland operates its own version of Right to Buy through the House Sales Scheme, managed by the Northern Ireland Housing Executive.

House Sales Scheme Eligibility

You must be a tenant of the Northern Ireland Housing Executive and have been a tenant for at least five years.

Discount Structure in Northern Ireland

Base discount: You receive 20% discount after five years of tenancy.

Additional discount: For each additional year as a tenant, you receive an extra 2% discount.

Maximum discount: The maximum discount is capped at £24,000.

Application Process

Applications are submitted directly to the Northern Ireland Housing Executive. They’ll assess your eligibility, conduct a property valuation, and calculate your discount.

Properties are sold at market value minus your discount. You’ll still need to secure a mortgage for the remaining amount (or pay cash if you have sufficient funds).

For more information, visit the Northern Ireland Housing Executive website.

Shared Ownership (England)

Shared Ownership represents one of the most popular affordable home ownership schemes in England. Rather than purchasing a property outright, you buy a share (typically 25% to 75%) and pay rent on the remainder.

How Shared Ownership Works

Initial purchase: You buy a share of the property (minimum 10% in some cases, typically 25-75%) and take out a mortgage on that portion.

Rent on remainder: You pay rent on the portion you don’t own. This rent is typically charged at a lower rate than market rent (usually around 2.75% of the unsold equity per year).

Staircasing: Over time, you can buy additional shares in your property (usually in 10% increments). This is called “staircasing.” Eventually, you can purchase 100% and own it outright.

Eligibility: You must be a first-time buyer or existing shared owner, with household income of £80,000 or less (£90,000 in London).

Property types: Shared Ownership typically applies to new-build properties, though there’s also a resale market for existing shared ownership properties.

Advantages of Shared Ownership

Lower deposit requirements: Since you’re only buying a share, your deposit requirement is much smaller.

Get on the property ladder sooner: You can start building equity without needing a full deposit and mortgage.

Flexibility: Start with a small share and increase over time as your income grows.

Shared Ownership Considerations

Two monthly payments: You’ll make both a mortgage payment and a rent payment, which requires careful budgeting.

Repair responsibilities: You’re responsible for 100% of repairs and maintenance, even though you don’t own 100%.

Staircasing costs: Buying additional shares requires revaluation fees and legal fees, adding to the cost.

Resale complexity: Selling a shared ownership property can be more complex than selling a property you own outright.

For comprehensive information on Shared Ownership, visit GOV.UK Shared Ownership.

Co-Ownership (Northern Ireland)

Co-Ownership is Northern Ireland’s version of shared ownership, operated by the Co-Ownership Housing Association.

Co-Ownership Key Features

Share purchase: You can buy between 50% and 90% of a property initially.

Co-Ownership Housing purchases the remainder: The Co-Ownership Housing Association owns the portion you don’t purchase.

Rent on remainder: You pay rent on the association’s share, typically around 3% per year of the unsold equity.

Staircasing: You can increase your ownership share in 5% increments whenever you choose.

Property types: Unlike English Shared Ownership which focuses on new builds, Co-Ownership works with both new and existing properties.

Income limits: Maximum household income of £60,000 for single applicants or £75,000 for joint applicants.

Northern Ireland-Specific Advantages

Co-Ownership in Northern Ireland often proves more accessible than equivalent schemes elsewhere in the UK due to:

• Lower average property prices in Northern Ireland
• Flexibility to use existing properties
• Smaller incremental staircasing steps (5% vs 10%)

For complete details, visit Co-Ownership Housing Association.

Shared Equity in Scotland

Scotland operates Shared Equity schemes designed to help buyers with lower incomes purchase homes they couldn’t otherwise afford.

Types of Scottish Shared Equity

New Supply Shared Equity (NSSE): This scheme helps you purchase new-build affordable homes from participating developers. The Scottish government provides an equity contribution of up to 15%, reducing your mortgage requirement.

Open Market Shared Equity (OMSE): This allows you to purchase existing properties on the open market with government assistance. You can receive equity of up to 40% depending on your circumstances.

Eligibility for Scottish Shared Equity

Income limits: Maximum household income of £38,000 (£54,000 in some island communities).

First-time buyer priority: While not exclusively for first-time buyers, they receive priority. Existing homeowners may qualify in limited circumstances.

Property value caps: Maximum property values vary by council area, typically ranging from £175,000 to £230,000.

Shared Equity Repayment

When you sell your property or choose to buy out the government’s share, you repay the same percentage of the property value—not a fixed amount.

If your property increases in value, you’ll repay more. If it decreases, you’ll repay less. This shared risk/reward model differs from a traditional loan.

For more information on Scottish schemes, visit More Homes Scotland.

Shared Ownership – Wales

Wales operates its own Shared Ownership scheme similar to England’s but with Welsh-specific criteria and registered landlords.

Welsh Shared Ownership Details

Income cap: Maximum household income of £60,000.

Share purchase: Buy between 25% and 75% of a property initially.

Rent on remainder: Pay rent on the portion owned by the registered landlord (typically a housing association).

Staircasing: Increase your share over time, typically in 10% increments.

Property types: Primarily new-build properties, though a resale market exists.

Welsh-Specific Eligibility

Priority is given to:

• First-time buyers who cannot afford to purchase on the open market
• Existing shared owners
• Council and housing association tenants
• People with a local connection to the area

Applications are managed through local housing associations registered with the Welsh Government. Each association sets additional criteria beyond the basic requirements.

For details on Welsh Shared Ownership, visit Welsh Government Affordable Home Ownership.

Home Ownership for People with Long-Term Disabilities (HOLD)

The HOLD scheme provides shared ownership specifically designed for people with long-term disabilities who want to purchase their first home.

HOLD Scheme Features

Disability requirement: You must have a long-term disability that substantially limits your ability to carry out day-to-day activities. This is defined under the Equality Act 2010.

Shared ownership structure: Works like standard Shared Ownership—you purchase a share and rent the remainder.

Minimum share: Unlike standard Shared Ownership where 25% is typically the minimum, HOLD allows purchases from 25% with plans to enable even lower shares where appropriate.

Income limits: Similar to standard Shared Ownership—£80,000 or less (£90,000 in London).

Property adaptations: The scheme recognizes that properties may need adaptations, and these can be accommodated as part of the purchase.

Who Benefits from HOLD?

HOLD specifically helps disabled individuals who:

• Face additional costs due to their disability, limiting savings capacity
• Require adapted properties, limiting their options
• Need security of tenure that long-term home ownership provides
• Want to avoid uncertainty in the private rental sector

For more information, visit GOV.UK HOLD Scheme.

Older People’s Shared Ownership (OPSO)

Older People’s Shared Ownership is designed specifically for buyers aged 55 and over, offering more favorable terms than standard Shared Ownership.

OPSO Key Features

Age requirement: You must be 55 or older at the time of purchase.

Initial share: Buy between 10% and 75% of your home. This lower minimum (compared to 25% in standard schemes) makes it more accessible.

Rent on remainder: Here’s the key difference—you only pay rent on the portion you don’t own up to 75%. If you buy 75% or more, you pay no rent on the remaining share.

Staircasing: You can increase your share to 100% over time if you wish, though it’s not required.

Property types: Typically new-build properties designed for older people, often in developments with communal facilities.

OPSO Advantages for Older Buyers

Lower monthly costs: The rent exemption above 75% ownership makes this scheme particularly attractive.

Downsizing option: Many older people use OPSO when downsizing from larger family homes, using their equity to purchase a substantial share.

Purpose-built properties: OPSO developments often include features suited to older residents, such as level access, emergency alarm systems, and communal spaces.

Security: Home ownership provides long-term security that renting in later life cannot match.

For more information, visit GOV.UK Older People’s Shared Ownership.

Looking to understand which scheme suits your situation best? Every buyer’s circumstances are unique, and choosing the right path makes all the difference. Contact our team at paul.welch@millionplus.com for personalized guidance on government schemes and mortgage options.

How to Choose the Right Scheme

With so many government schemes available, choosing the right one depends on multiple factors. Here’s how to navigate your decision.

Key Factors to Consider

Your location matters enormously. Each UK nation operates different schemes with varying eligibility criteria. Some schemes are exclusive to specific regions:

• England: Standard Shared Ownership, HOLD, OPSO, Mortgage Guarantee
• Wales: Help to Buy Wales, Homebuy Wales, Welsh Shared Ownership
• Scotland: Shared Equity schemes with lower income caps
• Northern Ireland: Co-Ownership, House Sales Scheme

Your income determines eligibility. Most schemes have income caps:

• Shared Ownership (England): £80,000 (£90,000 London)
• Welsh schemes: Typically £60,000
• Scottish Shared Equity: £38,000 (£54,000 islands)
• Co-Ownership (NI): £60,000 single / £75,000 joint

Property type preferences. Some schemes require new-build properties (Help to Buy Wales), while others work with existing stock (Homebuy Wales, Scottish OMSE).

Your savings situation. If you have limited savings:

• Consider Shared Ownership (smaller deposit)
• Mortgage Guarantee Scheme (5% deposit)
• Help to Buy Wales (5% deposit plus equity loan)

If you have decent savings but want to maximize them:

• Lifetime ISA (25% government bonus)
• Right to Buy (substantial discount for existing tenants)

Long-term plans. Think about your future:

• Planning to move in 5 years? Shared Ownership can be harder to sell
• Want to own 100%? Ensure the scheme allows staircasing
• Expecting income growth? Shared Ownership with staircasing might work well

Affordability assessment. Remember that qualifying for government schemes doesn’t mean you can afford the mortgage. Always get professional affordability advice before committing.

Getting Professional Guidance

The complexity of these schemes means professional advice proves invaluable. An experienced mortgage adviser can:

• Identify which schemes you’re eligible for
• Calculate the true cost of each option
• Secure the most competitive mortgage rates
• Explain the long-term implications of each choice

For comprehensive guidance on first-time buyer mortgages and government schemes, our team specializes in helping buyers navigate these complex options.

Frequently Asked Questions

If you’re interested in property investment, you’ll need alternative financing strategies.

Conclusion: Choosing Your Path to Home Ownership

Government schemes have opened doors to home ownership for millions of people who might otherwise struggle to get on the property ladder. Whether you’re a first-time buyer saving with a Lifetime ISA, a council tenant exercising your Right to Buy, or considering Shared Ownership to make that crucial first purchase, there’s likely a scheme that can help.

The key is understanding which schemes you’re eligible for, how they work in practice, and most importantly—how they fit with your broader financial strategy and mortgage plans.

Remember that government schemes aren’t one-size-fits-all. What works brilliantly for a first-time buyer in Cardiff might be completely unsuitable for someone in Edinburgh. Regional variations, income caps, and property type restrictions all play crucial roles in determining your best path forward.

Professional guidance makes all the difference. While this guide provides comprehensive information, every buyer’s situation is unique. Mortgage rules, eligibility criteria, and scheme availability change regularly—having an expert navigate these complexities on your behalf ensures you don’t miss opportunities or make costly mistakes.