Affordable home ownership schemes for first time buyers explained

Key takeaways

• Reduce home ownership barriers. Affordable home ownership schemes can help first time buyers purchase a property
• Schemes to help save a deposit. Some schemes help buyers save a deposit, while others reduce the purchase price or required deposit amount
• Lifetime ISAs. The Lifetime ISA offers a government bonus on eligible savings for a first home
• Shared Ownership. This scheme allows buyers to purchase a share of a property and pay rent on the remainder
• The First Homes Scheme. This offers eligible first time buyers a discount on new-build homes. It may also apply to existing homes that were previously bought through the scheme
• The Mortgage Guarantee Scheme. This supports the availability of 95% mortgages through participating lenders
• Guarantor mortgages and financial help from family members. With a guarantor mortgage or contributions from family members, some buyers may be able to borrow more than they otherwise could. Schemes like Bank of Family can offer similar benefits for eligible buyers

What are affordable home ownership schemes?

Affordable home ownership schemes are government-backed initiatives that can offer you financial help to buy a home. Depending on eligibility, buyers may be able to access programmes such as the First Homes Scheme, Shared Ownership, the Lifetime ISA or lender products aimed at buyers with smaller deposits.

Low deposit schemes can be helpful if you have a smaller deposit but are still looking to get onto the property ladder. Schemes such as Deposit Boost* can boost your 5% deposit by an extra 5% of the sale price, up to a maximum of £25,000, giving you a 10% deposit in total.

Affordable home ownership schemes compared

Lifetime ISA (LISA)

A Lifetime ISA (LISA) is a savings account designed to help people save a house deposit for their first home or to use in later life. Eligible savers can contribute up to £4,000 each year until they’re 50, alongside a government bonus of 25%, which can contribute up to a maximum of £1,000 per year. The government bonus can help boost savings, potentially making it easier to build your deposit.

Lifetime ISA eligibility and key rules

It’s important to check your eligibility before applying for a Lifetime ISA. These are some key rules to note:

• You must be aged 18 to 39 and make your first payment into your LISA before you’re 40
• Contributions can continue until age 50
• The government adds a 25% bonus on eligible savings, subject to scheme limits
• Funds generally need to be used for an eligible first home purchase or retirement
• Early withdrawals for other purposes may incur a withdrawal charge

You can find more information about Lifetime ISAs on the GOV.UK website.

Shared Ownership

An alternative pathway to traditional home ownership is Shared Ownership, which allows buyers to purchase a percentage share of a property. This is typically between 10% and 75% of the property value and rent is paid on the remaining share to the housing provider. Shared Ownership and renting are not to be confused.

Because you initially purchase only part of the property's value, the required deposit and mortgage are usually lower than when buying the property outright. Over time, you may be able to purchase additional shares in the property through a process known as staircasing.

Shared Ownership: benefits and considerations

Shared Ownership has several benefits and considerations you should be aware of before deciding whether it's right for you. Take a look at our table below to weigh up your options.

First Homes Scheme

The First Homes Scheme is designed to help eligible** first time buyers in England purchase discounted new-build homes or homes bought previously through the scheme. Discounts are generally applied to the property's market value and remain attached to the home when it is sold in the future.

Eligibility criteria for the First Homes Scheme can vary with property availability also depending on the location and development.

How to apply for the First Homes Scheme

If you’re looking to apply for the First Homes Scheme, you will need to contact a developer or estate agent first. Who you contact will depend on whether you’re buying a new-build home or a property from a previous First Homes buyer. The steps after this will normally be:

1. Your developer or estate agent will check that you meet the eligibility criteria and help you to complete the application
2. Your application will be submitted to the local council, who will check your application and whether you’re eligible for the scheme
3. A reservation fee may need to be paid at this stage if your property is a new build, but you’ll get this back if your application is unsuccessful
4. If your application is successful, you can arrange a mortgage to cover at least half of the purchase price
5. You can then hire your conveyancer, apply for a mortgage and submit the legal documents from your conveyancer
6. You exchange contracts and complete the purchase

Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme, which has been available since July 2025, supports buyers who can afford monthly mortgage repayments but have found it challenging to save a large deposit. You can have a deposit as low as 5% but will still need to meet the lenders' affordability, credit and eligibility requirements.

This home buying scheme aims to increase the availability of high loan-to-value (LTV) mortgages. This means the buyer will take out larger loans and make higher mortgage repayments because of the smaller initial deposit.

Check the most up-to-date government rules and regulations to determine your eligibility for the Mortgage Guarantee Scheme.

Guarantor mortgages and deposit support from family members

A guarantor mortgage involves another person supporting your mortgage application. This is often a parent or close family member. The guarantor agrees to contribute to the monthly repayments if the borrower cannot meet them.

This arrangement may help some buyers borrow more than they otherwise could based on their income. However, guarantors take on significant financial responsibilities and lenders will assess their circumstances carefully.

If you have been gifted a deposit from your parents, lenders will require formal documentation to confirm the money is a genuine gift and not a loan. This is often to ensure that the giver has no legal claim to the property. Other schemes like Bank of Family can match a family contribution up to 5% of the purchase price to help first time buyers get on the property ladder. Check the scheme’s full terms and conditions to find out more.

Which affordable home ownership scheme could be right for you?

The right affordable home ownership scheme depends on your circumstances, deposit size, borrowing requirements and long-term home ownership goals. In the table below, we list potential situations and the corresponding schemes that could suit different types of buyers.

Factors to consider before choosing a scheme

Before deciding which home buying scheme is right for you, it can be helpful to assess factors that affect your current financial position and long-term plans.

• Consider how much deposit you currently have available. Your affordability for properties will largely depend on how much deposit you have. If you have a smaller amount, you may want to consider low-deposit or deposit-boosting schemes
• Check the eligibility requirements for each scheme carefully. You may not be eligible for all affordable home ownership schemes, so make sure to check the terms and conditions of each
• Assess how flexible you are to move or sell in the future. When buying through some schemes such as First Homes, you will need to sell to another eligible first time buyer through the same scheme. It is worth considering whether this will impact your ability to sell

Explore our range of new developments to see what’s available with Barratt Homes or talk to one of our Sales Advisers about our schemes today.

Disclaimer:

This article is for general informational purposes only and does not constitute mortgage advice. We would always recommend that advice is taken from a regulated mortgage adviser regarding your specific circumstances.

*Offer available on selected plots only, subject to contract and status. Offer is to contribute up to a maximum of 5% deposit payable at the time of completion and is subject to lender’s criteria. Click here for the full terms and conditions.

**The government-backed, First Homes scheme is subject to status, eligibility (including any “Local Eligibility Criteria” set by the local authority for their area (if any) designed to prioritise people that have a local connection or are a key worker or Armed Services Member) and terms and conditions. Available on selected plots on some developments in England only. A property purchased using First Homes should be the buyers’ only home. First Homes buyers are required to fund at least 50% of the price after discount by a repayment mortgage (or home purchase plan) together with a deposit of at least 5% of the price after discount. If you're interested in the First Homes scheme, click here for full terms and conditions and speak to one of our Sales Advisers for more information.