Help to Buy Is Closed — What Are First-Time Buyers Using Instead in 2026?
Help to Buy closed to new applications in October 2022. In 2026, first-time buyers have a new set of tools: the Lifetime ISA, Shared Ownership, First Homes, and 95% mortgages without government equity loans. Here's how each one works and who they suit.
What Replaced Help to Buy?
Help to Buy's closure left a £3.4bn-per-year gap in government support for first-time buyers. The schemes that exist in 2026 cover different needs:
| Scheme | Who It Helps | Max Property Price | Government Bonus/Support |
|---|---|---|---|
| Lifetime ISA | Savers with time to build a deposit | £450,000 | 25% bonus on savings |
| Shared Ownership | Those who can't afford a full purchase | Varies (no hard cap) | Below-market rent subsidy |
| First Homes | Local/key workers in England | Typically £400k–£500k discounted price | 30–50% developer discount |
| 95% mortgages | Those with small deposits | No specific cap | No subsidy — commercial |
| Mortgage Guarantee Scheme | Lender support for 95% products | £600,000 | Government indemnity to lenders |
Lifetime ISA (LISA) — The Core Tool for Most FTBs
The LISA was introduced in April 2017 and remains the most versatile first-time buyer saving tool in 2026.
How the LISA bonus works
- Save up to £4,000/year into a LISA (Cash or Stocks & Shares)
- Government adds a 25% bonus (up to £1,000/year)
- Bonus is added monthly by HMRC
- Maximum total bonus over 12 years (age 18→30): £12,000 in government bonus
LISA deposit calculation: savings + bonus
| Annual LISA Savings | Annual Bonus | After 3 Years | After 5 Years |
|---|---|---|---|
| £1,000/yr | £250/yr | £3,750 | £6,250 |
| £2,000/yr | £500/yr | £7,500 | £12,500 |
| £3,000/yr | £750/yr | £11,250 | £18,750 |
| £4,000/yr | £1,000/yr | £15,000 | £25,000 |
Cash LISA; no investment growth assumed. S&S LISA would grow further.
LISA rules: what catches buyers out
| Rule | Detail |
|---|---|
| Property price limit | £450,000 — no exceptions. Above this, no LISA funds can be used |
| Age at opening | Must open between age 18 and 39 |
| First-time buyer only | Cannot own or have owned any property previously |
| Completion timing | Must use a conveyancer; cannot use for auction purchases |
| Withdrawal penalty | If withdrawn for non-qualifying purpose: 25% charge (effectively costs you the bonus + 6.25% of your own savings) |
| After age 60 | Withdraw for any reason, no penalty |
LISA + Help to Buy ISA interaction
The old Help to Buy ISA is no longer open to new accounts (closed November 2019). If you have an existing Help to Buy ISA, you can still use the bonus on a home purchase, but you cannot also use a LISA bonus on the same purchase. You choose one or the other.
Shared Ownership: Buying What You Can Afford
Shared Ownership is available on homes offered by registered housing associations and some developers. It suits buyers who:
- Have a deposit but cannot afford the full purchase price
- Want to own a home but can't reach 80%+ LTV on a full mortgage
- Are comfortable with lease terms and service charges
Monthly costs: Shared Ownership vs full purchase
Example: £300,000 property, 25% share (£75,000), mortgage at 4.5%, 5% deposit on share (£3,750).
| Cost Element | Shared Ownership (25%) | Full Purchase (5% deposit) |
|---|---|---|
| Deposit needed | £3,750 | £15,000 |
| Mortgage amount | £71,250 | £285,000 |
| Monthly mortgage | ~£395 | ~£1,579 |
| Rent (on 75% share at 2.75%) | ~£516 | — |
| Service charge (typical flat) | £100–£300 | £100–£300 |
| Total monthly housing cost | ~£1,010–£1,210 | ~£1,679–£1,879 |
Shared Ownership costs less monthly in this example — but you don't own the full property and must staircase to acquire more equity.
Staircasing: buying more shares
You can buy additional shares ("staircase") from the housing association:
- Minimum purchase per staircase: 1% (since April 2021 — previously 10%)
- Final staircase share to 100% ownership removes the rent obligation
- Staircasing at market value — if property prices rise, buying shares becomes more expensive
- Stamp Duty is complex in Shared Ownership: you can pay upfront on full market value or defer until you reach 80% ownership
Shared Ownership risks
- Leasehold: all Shared Ownership properties are leasehold. Check lease length — below 80 years becomes difficult to mortgage.
- Service charges: can increase significantly, eating into the affordability advantage.
- Selling difficulty: you may need to offer the housing association right of first refusal. Can slow down sales.
- Rent increases: rent on the unowned share typically rises annually by RPI + 0.5%.
First Homes: Discounted New-Builds in England
The First Homes scheme offers new-build homes at a 30–50% discount to eligible buyers. The discount is:
- Permanent: when you sell, the next buyer must also buy at the discounted price
- Income-capped: household income up to £80,000 (£90,000 in London)
- Locally prioritised: councils can apply local connection or key worker criteria
Who qualifies?
| Criterion | Requirement |
|---|---|
| First-time buyer | Yes — must never have owned a home |
| Household income | ≤ £80,000/yr (£90,000 London) |
| Property type | New-builds only, designated First Homes units |
| Mortgage minimum | Must mortgage at least 50% of the discounted price |
| Local criteria | Developer/council may require local connection or key worker status |
Practical availability
First Homes availability is limited and concentrated in specific developments. It is not nationwide — it depends on the developer including First Homes units in their planning obligations. Check the First Homes property search or Homes England's website for available developments.
95% Mortgages: No Scheme Needed
Since 2022, major UK lenders have offered 95% LTV mortgages commercially without needing government backing. In 2026:
| Lender Type | 95% LTV Available? | Typical Rate (5yr fix) |
|---|---|---|
| High street banks (Halifax, NatWest, Barclays) | Yes | 5.0–5.5% |
| Building societies (Nationwide, Yorkshire) | Yes | 5.0–5.3% |
| Specialist lenders | Yes | 5.2–5.8% |
Mortgage Guarantee Scheme
The government's Mortgage Guarantee Scheme (running to 2025, then extended) provides a guarantee to lenders on 95% LTV mortgages, encouraging more lenders to offer them and potentially keeping rates lower. For buyers, the experience is identical to a commercial mortgage — the guarantee operates at lender level.
95% LTV cost: on a £250,000 property
| LTV | Deposit | Rate | Monthly Payment (25yr) |
|---|---|---|---|
| 95% | £12,500 | 5.3% | £1,513 |
| 90% | £25,000 | 4.9% | £1,451 |
| 85% | £37,500 | 4.7% | £1,413 |
The premium for a 95% mortgage over 90% is typically £60–80/month — worth saving if you can accumulate 10% deposit, or worth accepting if waiting costs you more in rising rent.
Comparison: Which Scheme Is Right for You?
| Your Situation | Best Option |
|---|---|
| Have 3+ years before buying, salary ≤ £450k property price | Lifetime ISA (maximise the 25% bonus) |
| Can't afford a deposit on a full purchase | Shared Ownership (buy what you can afford now) |
| Want new-build, meet income/local criteria in England | First Homes (30–50% below market value) |
| Have a small deposit now and can't wait | 95% mortgage (commercial or under Mortgage Guarantee) |
| Want to combine approaches | LISA for deposit + 95% mortgage to purchase |
The LISA + 95% mortgage combination
This is the most common strategy in 2026 for buyers in the £150,000–£450,000 price range:
- Save £4,000/year into a LISA, receiving £1,000 bonus annually
- After 3 years: £15,000 in LISA (including £3,000 bonus)
- Use LISA funds as deposit on a 95% mortgage
- LISA deposit (5%) + 95% mortgage = 100% property finance at no personal cash outflow beyond LISA contributions
On a £250,000 property, 5% = £12,500. Three years of LISA at £4,000/yr gives £15,000 — enough for the 5% deposit with £2,500 to spare toward purchase costs.
Wales, Scotland and Northern Ireland
Help to Buy equivalents in devolved nations:
| Nation | Current Status |
|---|---|
| England | Help to Buy closed. LISA, Shared Ownership, First Homes operational |
| Wales | Help to Buy Wales closed. Homebuy Wales (shared equity with Welsh Government) available in some areas via local councils |
| Scotland | LIFT scheme (Low-cost Initiative for First-Time Buyers) — Scottish Government equity contribution up to 40% of purchase price for eligible buyers. Still active in 2026 |
| Northern Ireland | Co-Ownership scheme (similar to Shared Ownership) operated by Co-Ownership Housing Association |
Scottish LIFT is the closest equivalent to the old Help to Buy — a government equity stake that you repay when you sell at market value. It is means-tested and limited to new-build and some older properties.
SDLT for First-Time Buyers in 2026
Since April 2025, SDLT first-time buyer relief reverted to pre-pandemic thresholds:
| Purchase Price | SDLT for FTBs (from April 2025) |
|---|---|
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% on the portion above £300,000 |
| Above £500,000 | Standard rates (no FTB relief) |
A first-time buyer purchasing at £350,000 pays SDLT of £2,500 (5% × £50,000) — compared to zero under the temporary relief that ran to April 2025. Budget for this in your purchase costs.
Frequently asked questions
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