Government Mortgage Schemes for UK Buyers

This guide covers the main government-backed schemes currently available to help buyers purchase a home in the UK. Whether you are a first-time buyer saving for a deposit, a council tenant considering Right to Buy or someone looking at shared ownership, understanding what each scheme offers and what it requires will help you decide which options may be relevant to your circumstances.

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For a free initial consultation about buying with a government scheme, call 01202 155992 or contact Mortgage One.

Shared Ownership

Shared ownership allows you to buy a share of a property, typically between 10 and 75 per cent of the full market value, and pay rent to a housing association on the portion you do not own. You take out a mortgage on the share you purchase and can increase your ownership over time through a process called staircasing, eventually buying up to 100 per cent in most cases.

To be eligible, your household income must be £80,000 or less per year, or £90,000 or less in London. Shared ownership is available to first-time buyers, previous homeowners who cannot afford to buy outright, and existing shared owners looking to move. Properties purchased through shared ownership are usually leasehold, and you will pay service charges and ground rent alongside your mortgage and rent payments.

Mortgage One’s shared ownership mortgages guide explains how the mortgage works, how staircasing affects your costs and which lenders offer shared ownership products.

First Homes

The First Homes scheme is available in England and offers eligible first-time buyers a discount of at least 30 per cent on the market value of a new-build property. Some local authorities offer discounts of up to 50 per cent. The discount is permanent and passes to the next buyer when the property is sold, keeping it affordable for future purchasers.

To qualify, you must be a first-time buyer with a household income below £80,000 per year, or £90,000 in London. The property price after the discount must not exceed £250,000, or £420,000 in London. Local authorities can set additional eligibility criteria and may prioritise key workers or people with a local connection.

Availability of First Homes properties varies by area and is limited to developments where the local authority has included the scheme in its planning requirements. Mortgage One’s new build mortgages guide covers the mortgage considerations specific to new-build purchases.

Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme, also known as Freedom to Buy, was made permanent in July 2025. It supports 95 per cent loan-to-value mortgages by providing participating lenders with a government-backed guarantee against a portion of potential losses. This encourages lenders to offer mortgages to buyers with a deposit of just 5 per cent.

The scheme is available to both first-time buyers and home movers on properties valued up to £600,000. It applies to repayment mortgages only, not interest-only. You do not apply to the scheme directly; the government guarantee operates behind the scenes between the lender and the government. Many lenders already offer 95 per cent LTV mortgages independently of the scheme.

Mortgage One’s guide to buying with a small deposit explains how 95 per cent LTV mortgages work and what lenders look for.

To discuss which schemes may apply to your situation, call 01202 155992 or contact Mortgage One.

Lifetime ISA

The Lifetime ISA allows you to save up to £4,000 per year towards your first home, with the government adding a 25 per cent bonus of up to £1,000 per year on top of your contributions. You must be aged 18 to 39 to open a LISA, and the account must be open for at least 12 months before the bonus can be used towards a property purchase.

The property you buy must cost £450,000 or less. You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA. By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme or personal pension scheme, you may lose the benefit of contributions by an employer (if any) to that scheme and the savings may affect your entitlement to current and future means-tested state benefits.

The LISA can be used alongside other government schemes such as shared ownership or First Homes, provided you meet the eligibility criteria for both. If you are saving towards a deposit over several years, the LISA bonus can make a meaningful contribution.

Right to Buy

Right to Buy allows secure council tenants in England who have been public sector tenants for at least three years to purchase their council home at a discount. The discount is calculated based on how long you have been a tenant and whether the property is a house or flat. Maximum discounts vary by region.

Some lenders will accept the Right to Buy discount as all or part of your deposit, which means you may be able to purchase with little or no cash deposit of your own. However, lender criteria still apply, including income checks and affordability assessments.

First-Time Buyer Stamp Duty Relief

First-time buyers in England and Northern Ireland benefit from reduced stamp duty land tax rates. From April 2025, first-time buyers pay no stamp duty on the first £300,000 of the purchase price and 5 per cent on the portion between £300,001 and £500,000. If the property costs more than £500,000, the standard residential rates apply to the entire purchase price.

To qualify, all buyers on the transaction must be first-time buyers who have never owned or had an interest in a residential property anywhere in the world. The property must be purchased as your main residence. Mortgage One’s stamp duty calculator can help you estimate the amount payable on a specific purchase price.

Support for Mortgage Interest

Support for Mortgage Interest is a government loan available to homeowners receiving certain means-tested benefits, including Universal Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance. It helps cover the interest on your mortgage and certain secured loans.

SMI is a loan, not a grant. It accrues interest and must be repaid when the property is sold or ownership is transferred. There is typically a waiting period of 39 weeks before payments begin, although this can be shorter for some claimants. The amount is calculated using a standard interest rate set by the government, not your actual mortgage rate.

Schemes That Have Closed

The Help to Buy Equity Loan in England closed to new applications in October 2022, with all completions finalised by March 2023. The scheme allowed first-time buyers to borrow up to 20 per cent of the property value, or 40 per cent in London, as a government equity loan. Borrowers who already have a Help to Buy equity loan should contact their Help to Buy agent about repayment options. Mortgage One’s Help to Buy guide covers the background and what applies to existing borrowers.

How Mortgage One Can Help

Government schemes can interact with mortgage products in ways that are not always straightforward. Shared ownership mortgages require specialist lender criteria. First Homes properties involve legal covenants that not all lenders accept. Right to Buy discounts need to be structured correctly to count as a deposit. As a whole of market mortgage broker, Mortgage One can identify which lenders work with each scheme and ensure the mortgage application is structured to meet both the scheme’s requirements and the lender’s criteria.

Mortgage One’s first-time buyer mortgage guide covers the full buying process from agreement in principle through to completion.

Figures as of April 2026, London time.

For expert guidance on buying with a government scheme, call 01202 155992 or contact Mortgage One.

The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you’d like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

FAQs

1. Which government schemes are currently available for first-time buyers?

The main schemes available in England in 2026 are shared ownership, First Homes, the Mortgage Guarantee Scheme (Freedom to Buy), the Lifetime ISA and Right to Buy. Availability and eligibility criteria vary by scheme.

2. Is Help to Buy still available?

No. The Help to Buy Equity Loan in England closed to new applications in October 2022. Borrowers with existing Help to Buy loans should contact their Help to Buy agent about repayment. The scheme has not been replaced by a direct equivalent.

3. Can I combine more than one government scheme?

In some cases, yes. For example, you can use a Lifetime ISA alongside shared ownership or First Homes, provided you meet the eligibility criteria for both. However, not all combinations are possible, so check the specific rules for each scheme.

4. What is the Mortgage Guarantee Scheme?

The Mortgage Guarantee Scheme, also known as Freedom to Buy, provides a government-backed guarantee to lenders offering 95 per cent LTV mortgages. It was made permanent in July 2025. You do not apply to the scheme directly; it operates behind the scenes between the lender and the government.

5. What is shared ownership?

Shared ownership allows you to buy a share of a property, typically 10 to 75 per cent, and pay rent on the remaining portion. You can increase your share over time through staircasing. Household income must be £80,000 or less, or £90,000 or less in London.

6. Can I use my Right to Buy discount as a deposit?

Some lenders will accept the Right to Buy discount as all or part of your deposit. However, lender criteria still apply, including income and affordability checks. A broker can identify which lenders accept Right to Buy discounts.

7. What is the Lifetime ISA withdrawal penalty?

You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA. By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme or personal pension scheme, you may lose the benefit of contributions by an employer (if any) to that scheme and the savings may affect your entitlement to current and future means-tested state benefits.

8. Do I need a broker to buy with a government scheme?

It is not mandatory, but a broker can help you navigate the interaction between the scheme’s requirements and the lender’s criteria, which can be complex. Some schemes require specialist lender criteria that not all lenders offer.