The Help to Buy equity loan scheme closed to new applications in 2023, leaving many first-time buyers wondering what options remain. The good news? Several alternatives exist, and some are arguably better suited to the current market. Here's your updated roadmap to homeownership.
Lifetime ISA (Your Best Friend)
The Lifetime ISA remains the single best tool for first-time buyers. The 25% government bonus on up to £4,000/year is free money. Over 5 years, that's up to £5,000 in bonuses. Open one immediately (even with £1) to start the 12-month qualifying period.
First Homes Scheme
First Homes offers 30-50% discount on new-build properties for local first-time buyers. The discount stays with the property forever. Eligibility varies by local authority, but generally you need household income under £80,000 (£90,000 in London) and the discounted price must be under £250,000 (£420,000 in London).
95% Mortgages
Several lenders now offer 95% mortgages without government backing. While the rates are higher than with larger deposits, they make homeownership accessible with just a 5% deposit. On a £200,000 property, that's a £10,000 deposit — achievable with a focused saving plan.
- Halifax, Nationwide, HSBC, and others offer 95% LTV mortgages
- Higher rates than 90% or 85% LTV — expect to pay 0.5-1% more
- Can remortgage to a better rate once you've built more equity
- Use a mortgage broker for the best deals (many are free)
FAQ
Is shared ownership worth it?
For many first-time buyers, yes. The lower deposit and smaller mortgage make homeownership achievable years earlier than waiting to buy outright. The downsides: you pay rent on the unowned share, and selling can be more complex.
Can I use a Lifetime ISA with shared ownership?
Yes! You can use your LISA bonus toward the deposit on a shared ownership property, as long as the full property value is under £450,000.
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