First-time buyers may have access to tax reliefs, savings schemes, high loan-to-value mortgages and affordable home ownership schemes that can make buying a first home more achievable.
First-Time Buyers’ Stamp Duty Relief
In England and Northern Ireland, eligible first-time buyers currently pay:
0% Stamp Duty Land Tax on the first £300,000 of the purchase price.
5% on the portion between £300,001 and £500,000.
If the purchase price is more than £500,000, First-Time Buyers’ Relief does not apply and the normal residential Stamp Duty rates are used.
Everyone purchasing the property must normally qualify as a first-time buyer and you must intend to occupy the property as your main residence. GOV.UK
You can find more information in our Stamp Duty Tax Guide.
Lifetime ISA
A Lifetime ISA, or LISA, can help eligible first-time buyers save towards their first home.
You can currently contribute up to £4,000 each tax year, with the government adding a 25% bonus, worth up to £1,000 a year.
To use the money towards your first home, the property must currently cost £450,000 or less, you must be buying with a mortgage and at least 12 months must have passed since your first payment into the Lifetime ISA. GOV.UK
Help to Buy ISA
The Help to Buy ISA is closed to new applicants.
If you already have a Help to Buy ISA, you can continue paying into it until November 2029 and claim the government bonus until December 2030, subject to the scheme rules. GOV.UK
95% mortgages
Some first-time buyers may be able to purchase with a deposit of just 5%.
The permanent Mortgage Guarantee Scheme supports the availability of mortgages between 91% and 95% LTV, helping eligible buyers purchase with a smaller deposit.
There are also 95% mortgages available outside the government scheme, so the most suitable option will depend on your individual circumstances. GOV.UK
First Homes
The First Homes scheme helps eligible first-time buyers in England purchase qualifying properties at a discount of at least 30% against market value.
Unlike Shared Ownership, you purchase the property rather than buying a share and paying rent on the remainder.
National eligibility criteria include a household income limit of £80,000, or £90,000 in Greater London. Local authorities can also apply additional eligibility requirements. GOV.UK
Shared Ownership
Shared Ownership can provide another route onto the property ladder if buying a suitable home outright is not currently affordable.
You purchase a share of the property and pay rent to the housing association or provider on the remaining share.
Depending on the property and scheme, you may initially purchase between 10% and 75% of the property. You may then be able to purchase additional shares later through a process known as staircasing.
Household income must generally be £80,000 a year or less, or £90,000 or less in London, and you must be unable to afford all of the deposit and mortgage payments for a suitable home. GOV.UK
Find out more about Shared Ownership Mortgages.
Help to Buy
The Help to Buy Equity Loan scheme in England is now closed to new applications. GOV.UK
Other options may still be available to first-time buyers, including low-deposit mortgages, 100% mortgages, Shared Ownership and First Homes, depending on your circumstances.
If you are unsure which options may be available to you, speak to one of our mortgage advisers and we can talk you through the current choices.