Help to Buy vs Shared Ownership vs LISA: Which Scheme Is Right for You?

This guide is for information only and does not constitute financial advice. Always speak to a qualified financial adviser before making financial decisions.

Getting on the property ladder has never felt tougher. House prices remain high, mortgage rates have been volatile, and saving a deposit while paying rent can feel like running up a down escalator. If you are a first-time buyer in the UK, you have probably come across a string of government-backed schemes promising to help — but working out which one actually suits your situation is another challenge entirely. Understanding the range of first time buyer schemes UK is a crucial first step.

The old Help to Buy Equity Loan scheme — once the most talked-about route onto the property ladder — closed to new applicants in England in March 2023. In its place, a handful of other schemes have taken centre stage: the Lifetime ISA (LISA), Shared Ownership, and the First Homes scheme. Each one works in a completely different way, comes with its own rules, and suits a different type of buyer. This guide breaks them all down clearly, so you can make a more informed decision about which path makes sense for you.

By the end of this article, you will understand how each scheme works, what you need to qualify, the key trade-offs involved, and what questions to ask a financial adviser before you commit to anything.

What Happened to Help to Buy?

The Help to Buy Equity Loan scheme allowed eligible first-time buyers in England to borrow up to 20% of a new-build property's value from the government (40% in London), interest-free for the first five years. It was popular but controversial — critics argued it pushed up new-build prices rather than making homes genuinely more affordable.

The scheme closed to new applicants in England on 31 March 2023. A similar scheme remains available in Wales, where Help to Buy Wales is still active and provides an equity loan of up to 20% on new-build homes priced up to £300,000. If you are buying in England, however, you will need to look at the alternatives covered below. Scotland and Northern Ireland have their own separate arrangements.

The Lifetime ISA (LISA): First Time Buyer Schemes UK Explained

The Lifetime ISA has become the go-to savings scheme for first-time buyers in England, Scotland, Wales, and Northern Ireland. It is simple in principle: the government adds a 25% bonus to whatever you save, up to a maximum bonus of £1,000 per tax year. That means if you save the maximum £4,000 in a tax year, the government tops it up to £5,000.

How the LISA Works

• You must be aged 18 to 39 to open a LISA.
• You can save up to £4,000 per tax year.
• The government adds a 25% bonus, worth up to £1,000 per year.
• You can use it to buy your first home worth £450,000 or less.
• The account must be open for at least 12 months before you can use the bonus towards a home purchase.
• If you withdraw the money for any other reason (other than retirement after age 60, or terminal illness), you face a 25% withdrawal penalty — which means you lose the government bonus and a small portion of your own savings.
• You can hold either a cash LISA or a stocks and shares LISA, but you can only pay into one in any given tax year.

Who Is the LISA Best For?

The LISA is most powerful if you are buying a property priced at £450,000 or under, have at least a year before you plan to buy, and will not need to touch the savings for anything else in the meantime. If two first-time buyers are purchasing together, they can each hold a LISA and both claim the bonus — a significant combined boost to a joint deposit.

One important caveat: if you are using a LISA alongside a Shared Ownership purchase, the £450,000 price cap applies to the full market value of the property, not just the share you are buying. Keep this in mind if you are considering combining the two schemes.

Note that in the Autumn Budget 2025, the government announced a consultation on a new, simpler ISA product specifically for first-time buyers, which may eventually replace or supplement the LISA. Details are still emerging — your adviser will be able to keep you updated.

Shared Ownership: Buy a Share, Pay Rent on the Rest

Shared Ownership is one of the most widely available first time buyer schemes UK and works quite differently from a conventional purchase. Instead of buying 100% of a home, you buy a share — typically between 10% and 75% — and pay a reduced rent to a housing association on the portion you do not own. Over time, you can buy additional shares in a process called staircasing, eventually owning the property outright if you choose.

Eligibility for Shared Ownership

• Your household income must be £80,000 per year or less (or £90,000 or less in London).
• You must be a first-time buyer, or a previous homeowner who cannot currently afford to buy.
• The scheme is available across England; rules differ slightly in Scotland, Wales, and Northern Ireland.

Shared Ownership Pros and Cons

On the plus side, Shared Ownership means a smaller deposit (because you are only buying a share), lower mortgage payments, and a structured route to full ownership. It can open the door to areas or property sizes that would be completely unaffordable outright.

On the other hand, there are important costs to be aware of:

• You pay both a mortgage on your share and rent on the remainder — and both can rise over time.
• Most Shared Ownership properties are leasehold, meaning you may pay a monthly service charge and contribute to maintenance costs.
• Selling can be more complicated than selling a freehold home outright.
• Staircasing — buying more shares — involves legal fees and sometimes a new valuation each time.

Shared Ownership is often a good fit for people with steady incomes who cannot save a large enough deposit for outright purchase, particularly in higher-cost areas of England.

The First Homes Scheme: A Discount on the Purchase Price

Launched in 2021 and available in England, the First Homes scheme offers eligible first-time buyers a discount of at least 30% off the market value of a new-build home. The discount is permanent — when you eventually sell the property, the next buyer also receives the same percentage discount, preserving affordability in the local area.

First Homes Eligibility

• You must be a first-time buyer.
• Household income must be below £80,000 per year (or £90,000 in London).
• After the discount, the home must be priced at no more than £250,000 (or £420,000 in London).
• Local authorities may set additional eligibility criteria, such as prioritising key workers or people with a local connection.

The scheme is available through specific developers and local authority partnerships, so availability depends heavily on where you want to live. Speak to your local council or check with estate agents selling new-build homes in your area to find out what is available.

Stamp Duty Relief for First-Time Buyers in 2025/26

It is worth knowing that first-time buyers in England and Northern Ireland also benefit from Stamp Duty Land Tax (SDLT) relief — though the thresholds changed in April 2025.

From 1 April 2025, first-time buyers pay:

1. 0% on the first £300,000 of the purchase price.
2. 5% on the portion between £300,001 and £500,000.
3. No relief applies at all if the property costs more than £500,000 — standard rates apply in full.

This is a tightening of the previous thresholds (which had been temporarily raised to £425,000 nil-rate for first-time buyers). In high-cost areas like London and the South East, this change significantly increases the upfront costs for many buyers. For example, a first-time buyer purchasing a home at £400,000 now pays £5,000 in stamp duty, compared to nothing before April 2025.

In Scotland, the nil-rate threshold for first-time buyers under Land and Buildings Transaction Tax (LBTT) remains at £175,000. In Wales, Land Transaction Tax applies, with a nil-rate threshold of £225,000 for all buyers.

Which Scheme Is Right for You? A Practical Comparison

The honest answer is: it depends on your income, your deposit, where you want to buy, and what type of property suits your needs. Here is a quick overview to help you think it through:

• LISA — Best if you are aged 18–39, buying a property under £450,000, and want to maximise your deposit with a guaranteed government bonus. Low commitment: you just need to save regularly.
• Shared Ownership — Best if your income is modest, you cannot save a large deposit, or you want to buy in a high-cost area. Be prepared for the dual costs of mortgage plus rent, and read the lease carefully.
• First Homes — Best if you are buying a new-build in England, meet the income cap, and want a genuine discount on the purchase price. Availability is patchy, so check what is on offer locally.
• Help to Buy Wales — If you are buying a new-build in Wales priced up to £300,000, this equity loan scheme is still active and worth investigating.

You can also combine schemes where the rules allow. For example, you might use a LISA to build your deposit and then buy through Shared Ownership. A qualified financial adviser or mortgage broker who specialises in government mortgage schemes can help you navigate the combinations that are available.

Take the Next Step: Talk to a Professional

Navigating first time buyer schemes UK involves more than simply picking the scheme with the biggest headline number. You need to weigh up your personal income, savings timeline, the type of property you want, and the area you plan to buy in. Rules change, and the details matter — a mistake at this stage can be costly.

Before you make any decisions, we strongly encourage you to speak with a qualified, independent mortgage adviser or financial adviser who has experience in first-time buyer schemes. They can assess your full picture, explain which schemes you are actually eligible for, and help you build a realistic plan. Many advisers offer a free initial consultation, so there is nothing to lose by having the conversation.

Key Takeaways

• The Help to Buy Equity Loan closed in England in March 2023; the main alternatives are the Lifetime ISA, Shared Ownership, and the First Homes scheme (Help to Buy Wales is still active for new-builds in Wales).
• The Lifetime ISA offers a 25% government bonus (up to £1,000/year) for first-time buyers saving towards a home worth £450,000 or less — but the 25% withdrawal penalty makes it unsuitable if you might need the money for anything else.
• Shared Ownership lets you buy a share of a home (10–75%) and pay reduced rent on the rest; you can staircase to full ownership over time, but be aware of combined mortgage and rent costs plus leasehold charges.
• The First Homes scheme gives a minimum 30% discount on new-build properties in England; availability depends on local authority and developer participation.
• From April 2025, first-time buyer Stamp Duty relief in England applies at 0% up to £300,000 and 5% on £300,001–£500,000; the relief is withdrawn entirely above £500,000.
• A qualified financial adviser can help you identify which combination of first time buyer schemes UK is best suited to your income, deposit, and property goals.