Help to Buy vs Shared Ownership 2025/26

Status overview — what is actually open in 2025/26

The first-time buyer landscape changed materially after 2023. Anyone researching schemes for a 2025 or 2026 purchase will find a great deal of outdated content online still describing Help to Buy as if it were live. It is not.

• Help to Buy Equity Loan (England) — CLOSED. Stopped accepting new applications on 31 March 2023. Existing borrowers continue under original terms.
• Help to Buy (Wales) — CLOSED. The Welsh scheme accepted its final reservations in October 2024 and ran completions to March 2025.
• Help to Buy (Scotland) — CLOSED. Scotland’s scheme closed several years earlier.
• Help to Buy ISA — CLOSED to new accounts since November 2019. Existing holders can still claim the 25% bonus until December 2030 when they buy.
• Shared Ownership — ACTIVE. Now the principal government-supported affordable housing route for first-time buyers in England.
• First Homes — ACTIVE. Permanent 30–50% discount on selected new-builds in England.
• Lifetime ISA — ACTIVE. Open to anyone aged 18–39, 25% bonus on savings up to £4,000/year.
• Mortgage Guarantee Scheme — ACTIVE (extended to June 2025). Government backs 95% LTV lending.

Help to Buy Equity Loan — historical context for existing borrowers

If you took out a Help to Buy Equity Loan before March 2023, you remain on the original terms — and those terms now matter, because the interest-free honeymoon is expiring for thousands of borrowers. Key features:

• The government lent 20% of the property price (40% in London) on new-build homes.
• Borrowers paid a 5% deposit and took a 75% mortgage (55% in London).
• The equity loan was interest-free for the first five years.
• From year 6 onwards interest starts at 1.75% of the original loan, rising annually by RPI + 1%.
• The loan must be repaid within 25 years, when you sell, or when you pay off the main mortgage.
• Repayment is based on a percentage of the current property value, not the original cash sum — so if your home appreciated, you owe back more in cash.
• Regional property price caps applied, generally set at 1.5× the regional average.

With RPI running well above target in 2022–2024, many Help to Buy borrowers have seen interest charges rise sharply. The standard advice for those approaching year 6 is either to staircase (repay) part of the equity loan or to remortgage and clear it entirely if equity allows.

A worked example: a buyer who took a £60,000 equity loan in 2018 on a £300,000 London new-build paid £0 interest until 2023. In year 6 their starting interest is £1,050/year (1.75% of £60,000). After three further years of RPI + 1% uplifts driven by 2022–2024 inflation, that charge has roughly doubled. Critically, the cash repayment due on sale or remortgage is calculated on the current value of the home: if the property is now worth £360,000, the buyer owes back 20% of £360,000 = £72,000, not the original £60,000. That equity loan growth, layered on top of the rising interest, has caught many borrowers off-guard.

Shared Ownership — how it works in detail

Shared Ownership lets you buy a share of a property — typically between 25% and 75% initially, although 2024 reforms allow shares as low as 10% on new schemes — and pay rent on the share you do not own. The rent is subsidised: the housing association charges up to 2.75% of the unowned share value per year (annual rate). You take a mortgage only on the share you buy, so the deposit and monthly mortgage payments are much smaller than buying outright.

Eligibility criteria for new applicants in England in 2025:

• Household income under £80,000 outside London or £90,000 in London.
• You cannot afford to buy a suitable home on the open market.
• You do not currently own another property (or are in the process of selling).
• You have a deposit (usually 5–10%) of the share value plus moving costs.

On top of mortgage and rent you pay a service charge (most Shared Ownership homes are leasehold flats, where service charges typically run £100–£300/month) plus standard utilities and council tax. Crucially, the housing association is your landlord on the unowned share — that has implications for selling, letting and major works.

Worked example — £400,000 property in South East England

Consider a buyer purchasing a new-build flat valued at £400,000 in the South East.

Shared Ownership — buy a 40% share:

• Share value: £400,000 × 40% = £160,000
• Deposit at 10% on the share: £16,000
• Mortgage on the share: £144,000 (90% LTV)
• Mortgage payment at 4.7% over 25 years: ≈ £820/month
• Rent on unowned 60%: £400,000 × 60% × 2.75% = £6,600/year = £550/month
• Service charge (typical new-build flat): ≈ £150/month
• Total monthly housing cost: ≈ £1,520 (excluding council tax, utilities, buildings insurance contribution within the service charge)

Buying outright at £400,000 with a 10% deposit:

• Deposit: £40,000
• Mortgage: £360,000 (90% LTV)
• Mortgage payment at 4.7% over 25 years: ≈ £2,050/month
• Service charge if leasehold: ≈ £150/month
• Total monthly housing cost: ≈ £2,200

Shared Ownership saves the buyer £24,000 upfront and around £680 per month — but at the cost of only owning 40% of any future appreciation and being locked into a leasehold structure with restrictions.

To put this in long-term perspective: if the £400,000 property appreciates by 3% per year for 10 years, it becomes worth roughly £537,000 — a £137,000 gain. The outright owner captures the full gain. The Shared Ownership buyer at 40% captures only £55,000 of appreciation on their share, and faces a higher cash cost to staircase up because the unowned 60% has also risen with the market. That structural drag is the principal financial criticism of Shared Ownership: it works well as a stepping stone but is expensive if you stop part-way and never staircase to 100%.

Staircasing — buying more shares over time

Staircasing is the formal mechanism for increasing your share. Each transaction triggers fixed costs:

• RICS valuation: £200–£500, valid only for three months.
• Solicitor fees: £500–£1,500 per staircase.
• Mortgage product fee if you raise additional borrowing.
• Stamp duty may apply on the additional share, depending on which SDLT election was made at the first purchase.

The biggest catch: the property is revalued each time you staircase. If prices have risen since your original purchase, the same percentage now costs more cash. Some buyers find they cannot keep up with appreciation and are stuck at the original share long-term — leading to the criticism that Shared Ownership functions more like a long lease than ownership in practice.

Disadvantages of Shared Ownership

Shared Ownership has been called “fauxnership” by its critics for good reason. The main drawbacks to weigh:

• Leasehold restrictions. You cannot sublet without consent. Pets, alterations and even some decorating decisions can require landlord permission.
• Limited resale market. The housing association has a contractual 8-week nomination period when you sell, during which you cannot market the property to the open market.
• Service charges can rise sharply — particularly post-Grenfell, with cladding remediation, fire safety upgrades and rising buildings insurance.
• Rent rises annually with RPI/CPI + a small uplift, so even if you never staircase, your housing cost increases each year.
• You are 100% liable for repairs even though you only own a share, including in many cases the structure and exterior of houses.
• Some flats never reach 100% staircasing due to scheme restrictions in protected rural areas or because the leasehold terms cap maximum ownership.
• Mortgage lender pool is smaller than for conventional purchase, and some lenders treat Shared Ownership as higher-risk.

2024+ Shared Ownership reforms

In response to long-running criticisms, the government introduced several reforms to new Shared Ownership leases granted from April 2021 onwards, with further refinements in 2024:

• Minimum initial share cut from 25% to 10%, making entry more accessible.
• 10-year “essential repairs allowance” — landlords contribute up to £500/year for the first decade towards essential repair costs.
• Simpler 1% staircasing for the first 15 years, with reduced valuation requirements and lower fees.
• Minimum 990-year lease length on new schemes.
• Standardised lease terms across providers, reducing the post-code lottery on restrictions.

These changes are forward-only: older Shared Ownership leases (pre-2021) are unaffected, so you should check the lease date carefully when buying second-hand Shared Ownership.

Alternatives in 2025/26

If Shared Ownership doesn’t fit, several other live schemes can help:

First Homes Scheme

A permanent discount of 30–50% off market value on selected new-builds, with the post-discount price capped at £250,000 (£420,000 in London). Restricted to first-time buyers with household income under £80,000 (£90,000 in London). The discount is a permanent restriction on the property — when you sell, you must sell to another qualifying first-time buyer at the same percentage discount. Supply has been slow to ramp up since launch.

Lifetime ISA (LISA)

Save up to £4,000/year and the government adds a 25% bonus — a maximum £1,000 a year, £33,000 across a saving lifetime. Property must cost £450,000 or less and you must be a first-time buyer. The LISA is the most flexible scheme because it combines with any other route — including Shared Ownership and First Homes.

Mortgage Guarantee Scheme

The government guarantees a portion of lenders’ losses on 95% LTV mortgages for properties up to £600,000. It is not a direct subsidy to buyers, but it nudges lenders to offer 5% deposit deals at more competitive rates. Extended to June 2025.

Deposit Unlock

A private-sector scheme from the Home Builders Federation and Gallagher Re where developers and insurers underwrite 95% LTV mortgages on new-builds. Available with most major housebuilders and a panel of participating lenders. Functionally similar to the Mortgage Guarantee Scheme but for new-builds only.

Right to Buy and Right to Acquire

If you are a long-standing council or housing association tenant, you may already qualify for Right to Buy (council tenants) or Right to Acquire (some housing association tenants), which can offer steep discounts off the open-market value. These are not first-time buyer schemes per se, but they are still active in 2025/26 and often more generous than any of the schemes above for those who qualify.

Family-assisted mortgages

If parents or grandparents can help, family-deposit mortgages (Barclays Family Springboard, Lloyds Lend a Hand, Skipton Track Record) let relatives put a fixed sum in a linked savings account or guarantee a portion of the loan. These give access to high-LTV lending without using a government scheme — useful if you exceed scheme income caps.

Stamp Duty for first-time buyers

First-time buyer SDLT relief in England (2025/26):

• 0% on the first £300,000
• 5% on the slice from £300,001 to £500,000
• No relief at all if the property price exceeds £500,000 (you pay full standard rates)

For Shared Ownership purchases, you elect one of two SDLT methods at the outset:

• Method 1 — pay on the first lease premium only. SDLT is calculated on the share value plus the net present value of rent. Often zero for first-time buyers thanks to relief. But you may face SDLT later on each staircasing transaction once your cumulative ownership exceeds 80%.
• Method 2 — market-value election. Pay SDLT upfront on the full market value of the property as if you were buying it outright. Higher initial cost but no further SDLT on future staircasing.

If you expect to staircase steadily to 100% and prices to rise, the market-value election can save money long-term. Otherwise method 1 is usually preferable.

Decision matrix — which scheme fits?

• Household income below the cap (£80k / £90k London), modest deposit: Shared Ownership is the strongest option — lowest entry point and offers a route to full ownership.
• Buying a new-build in an area with First Homes supply: First Homes can be cheaper than Shared Ownership long-term because there is no ongoing rent. But supply is patchy.
• Income above the cap, still saving for deposit: LISA + Mortgage Guarantee Scheme is the cleanest route. You retain full ownership and full appreciation upside.
• Cash-rich first-time buyer, target property under £500k: Use FTB SDLT relief and buy outright — schemes add restrictions you don’t need.
• Target property over £500k (typical in London): SDLT relief is lost entirely — Shared Ownership method 1 SDLT election can save tens of thousands.
• Council or housing association tenant: Check Right to Buy / Right to Acquire first — discounts are typically larger than any open scheme.
• Aged under 40, parents can gift a deposit: A LISA used by both partners alongside a family-deposit mortgage can be the fastest route to outright ownership without scheme restrictions.

A pragmatic rule of thumb: if your gross household income is below 4× the price of a suitable local property, you almost certainly need a scheme. If income is 5× or more, you should be able to buy outright with a deposit and standard mortgage — paying scheme fees and accepting restrictions is rarely worth it at that level.

Common mistakes

• Assuming Help to Buy is still open. A surprising number of online guides have not been updated. It is closed in all UK nations to new applicants.
• Forgetting service charge in budget calculations. A £150–£300/month service charge can swing affordability significantly and is rarely included in headline “monthly cost” figures.
• Not factoring future rent rises. Shared Ownership rent rises annually with RPI/CPI plus an uplift. Over 10 years your housing cost can rise materially even if you never staircase.
• Ignoring resale restrictions. The 8-week nomination period and discount restrictions on First Homes can extend sale timescales and reduce flexibility.
• Choosing the wrong SDLT election. A long-term plan to staircase to 100% in a rising market favours the market-value election; most buyers default to method 1 without analysis.
• Confusing the Help to Buy ISA with the Lifetime ISA. Help to Buy ISA is closed to new accounts since 2019; LISA is the live equivalent.

Official gov.uk references

• Own Your Home portal (ownyourhome.gov.uk) — the single front door to all live first-time buyer schemes.
• Shared Ownership scheme — gov.uk — official guidance on eligibility, share sizes and staircasing.
• First Homes scheme — gov.uk — discount eligibility and how to apply.
• Lifetime ISA — gov.uk — bonus rules, withdrawal penalties and limits.

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