Buying your first home is one of the biggest steps you will ever take. And if you are doing it in 2026, the good news is that there is a lot of help out there. From government schemes to stamp duty savings, first time buyers in the UK have access to benefits that most people simply do not know about — and that can cost them thousands.
This guide covers everything. What schemes are available, how much you can save on stamp duty, which savings accounts work best, and what mortgage help you can actually get. By the time you finish reading this, you will know exactly where you stand and what steps to take next.
What Benefits Do First Time Buyers Get in the UK?
As a first time buyer in the UK, you are in a better position than you think. The government has set up a range of schemes and reliefs specifically to help people like you get on the property ladder without needing a huge deposit or paying full price on everything.
Here is a quick overview of what is available to you:
• Stamp Duty Relief: You pay no stamp duty on the first £300,000 of a property (up to £500,000 total purchase price).
• Lifetime ISA: You can save up to £4,000 per year and get a 25% government bonus through the Lifetime ISA.
• 5% Deposit Mortgages: You can buy with just a 5% deposit through the Freedom to Buy scheme.
• Shared Ownership: You can buy a share of a home through Shared Ownership — from as little as 10%.
• First Homes Scheme: You can purchase new-build homes at 30% to 50% below market value through the First Homes Scheme.
• Right to Buy: If you are a council tenant, you can buy your home at a discount through Right to Buy.
These benefits add up to real money. For many buyers, the savings run into the tens of thousands of pounds. But you have to know they exist before you can use them.
That is where BM14 Finance comes in. We are a UK-based mortgage and insurance advisory firm with experienced advisors who make the whole process straightforward and stress-free. Whether you are buying your first home, remortgaging, looking at buy-to-let, or moving to a new property, our advisors guide you every step of the way. We also offer a full range of protection services, including traditional life insurance, income protection, critical illness cover, over 50s cover, whole of life insurance, and buildings and contents insurance. If you are ready to take the first step, contact BM14 Finance today.
Government Schemes for First Time Buyers in 2026
The government has been running schemes to help first time buyers for years. Some have closed, and some new ones have taken their place. Here is every scheme that is active right now:
Lifetime ISA (LISA) — Save Smarter with a 25% Government Bonus
The Lifetime ISA is one of the best available to any first time buyer who is still in the savings stage. You can save up to £4,000 each year, and the government adds a 25% bonus on top — that is up to £1,000 for free every single year.
To open a LISA, you must be between 18 and 39 years old. You can use the funds to buy your first home, as long as the property costs £450,000 or less. If you withdraw the money for any other reason before you turn 60, you will face a 25% penalty — so keep it locked in for your home purchase.
If you are buying with another first time buyer who also has a LISA, you can both use your own LISA on the same property. That means a couple could receive up to £2,000 in government bonuses every year they are saving.
For Example: A couple each save £4,000 per year in their LISAs for three years. After three years, they have each saved £12,000 and received £3,000 in government bonuses — giving them a combined pot of £30,000 toward their deposit. That is £6,000 that cost them nothing.
Freedom to Buy (Mortgage Guarantee Scheme) — Buy with Just a 5% Deposit
This is the permanent version of the Mortgage Guarantee Scheme, which was launched in July 2025 to replace the older temporary version. It does exactly what the name suggests — it helps you buy a home with just a 5% deposit by giving lenders a government guarantee on part of the loan.
You do not apply for this scheme directly. It works behind the scenes. When you approach a participating lender with a 5% deposit, the lender can offer you a 95% mortgage knowing the government is backing part of the risk. Properties up to £600,000 are eligible, and it is open to both first time buyers and home movers.
The key point here is that you still borrow the full amount and pay it back in the normal way. There is no government loan involved — just a guarantee that encourages lenders to offer you a mortgage they might otherwise turn down.
Shared Ownership — Get on the Ladder with a Smaller Share
Shared Ownership lets you buy a percentage of a property — typically between 10% and 75% — and pay rent on the rest to a housing association. Over time, you can buy more shares in a process called staircasing, moving toward full ownership when you can afford it.
To be eligible, your household income must be under £80,000 per year (or £90,000 in London). You must be a first time buyer, or a previous homeowner who can no longer afford to buy outright. The scheme is available on new-build homes as well as some resale shared ownership properties.
One thing to keep in mind with Shared Ownership is that the properties are leasehold. This means you will also pay ground rent and service charges alongside your mortgage and rent. Make sure you budget for all three costs before you commit.
First Homes Scheme — Buy a New Build at Up to 50% Off
The First Homes Scheme is the main government support for first time buyers in England in 2026, especially now that Help to Buy has closed. Under this scheme, eligible buyers can purchase new-build homes at a minimum 30% discount — and some local councils offer discounts as high as 50%.
To qualify, you must be a first time buyer over 18, buying a property in England, and earning less than £80,000 per year before tax (or £90,000 if you are in London). Local councils can set their own additional eligibility rules, so in some areas, key workers or local residents may be given priority.
The discount is permanent. When you sell the home later, you must sell it to another eligible first time buyer at the same percentage discount from the market value. So the affordability benefit passes on to the next buyer too.
Example: A home worth £250,000 in your area qualifies for the First Homes Scheme at a 30% discount. You buy it for £175,000. Your deposit and mortgage are calculated on £175,000, not £250,000 — which makes it much more affordable from day one.
Right to Buy — Buy Your Council Home at a Discount
If you are a council tenant in England and have lived in public sector housing for at least three years, you may be able to buy your home through the Right to Buy scheme. The discount you receive depends on how long you have been a tenant and whether you live in a house or a flat.
The discount can be significant. In some cases, it runs into tens of thousands of pounds. However, if you sell the property within the first few years of buying it, you will need to repay some or all of the discount — so this works best if you plan to stay in the property for the long term.
Help to Buy Wales — Equity Loan for Welsh Buyers
If you are based in Wales, the Help to Buy Wales scheme is still active — though it is set to run only until September 2026. This scheme provides a shared equity loan for buyers of new-build homes. You can use it to purchase a property up to £300,000 through a registered Help to Buy Wales builder.
The Welsh Government lends you a percentage of the property’s value, which means you need a smaller mortgage and your monthly repayments are lower. If you are in Wales and considering a new-build purchase, this scheme is worth looking at before it closes.
Help to Build — For Self-Build Buyers
If you are planning to build your own home rather than buy one, the Help to Build scheme is designed for you. It provides an equity loan to self-build buyers, similar in structure to Help to Buy. You can use it alongside a self-build mortgage to fund the construction of your home.
This is a more niche option and comes with its own set of rules and requirements, but for buyers who want a truly custom home, it can be a useful route to explore.
Stamp Duty Relief for First Time Buyers — How Much Can You Save?
Stamp Duty Land Tax (SDLT) is one of the biggest upfront costs when buying a home. As a first time buyer, you get a significant reduction — but the rules changed in April 2025 and they are still in place for 2026.
Here is how it works:
| Property Price | What You Pay (First Time Buyer) |
| Up to £300,000 | 0% — you pay nothing |
| £300,001 to £500,000 | 5% on the portion above £300,000 only |
| Over £500,000 | Standard rates apply — no first time buyer relief |
So if you buy a home for £350,000 as a first time buyer, you pay 5% on the £50,000 above £300,000 — that is £2,500 in stamp duty. Without first time buyer relief, you would pay considerably more.
Before April 2025, first time buyers paid nothing up to £425,000. The threshold has since dropped to £300,000, so it is more important than ever to factor stamp duty into your budget early.
In Scotland, buyers pay Land and Buildings Transaction Tax (LBTT) instead, with a 0% threshold of £175,000 for first time buyers. In Wales, Land Transaction Tax (LTT) applies, and the rules differ from England.
First Time Buyer Savings Accounts: LISA vs Help to Buy ISA
The Help to Buy ISA closed to new accounts in November 2019, so if you do not already have one, it is not an option for you. If you do have one open, you can still save up to £200 per month and claim a 25% government bonus when you buy. However, the bonus cap is lower than the LISA.
The Lifetime ISA is the main savings account for first time buyers in 2026. Here is how they compare:
| Feature | Lifetime ISA (LISA) | Help to Buy ISA (Existing accounts only) |
| Annual Savings Limit | £4,000 | £200/month (max £2,400/year) |
| Government Bonus | 25% (up to £1,000/year) | 25% (up to £3,000 total lifetime) |
| Maximum Property Price | £450,000 | £250,000 (£450,000 in London) |
| Age Requirement | 18 to 39 to open | 18 to 39 to open |
| Penalty for Other Withdrawal | 25% (recovers bonus + more) | No penalty (just no bonus) |
The LISA is clearly the stronger option if you are starting fresh. You can save more, get a higher bonus each year, and buy a more expensive property. Just make sure you will not need to access the money before you buy, as the 25% withdrawal penalty can actually reduce your own savings below what you originally put in.
Mortgage Help for First Time Buyers
What is the Mortgage Guarantee Scheme?
The Mortgage Guarantee Scheme — now permanent and known as Freedom to Buy — is the government’s way of encouraging lenders to offer high loan-to-value (LTV) mortgages. It does not give you money directly. Instead, it acts as a safety net for lenders, reducing the risk they take when lending to someone with a small deposit.
As a result, more lenders are willing to offer 95% mortgages — meaning you only need a 5% deposit to buy. Without the scheme, many lenders would not offer mortgages above 90% LTV because the risk is too high for them.
Can I Get a Mortgage with a 5% Deposit?
Yes, you can. The Freedom to Buy scheme makes this possible with participating lenders across the UK. That said, you still need to pass the lender’s affordability checks and have a reasonable credit history. A 95% mortgage means you are borrowing a lot relative to the property’s value, so lenders look closely at your income, outgoings, and credit score.
It is also worth knowing that 95% mortgages tend to come with higher interest rates than lower LTV mortgages. If you can save a 10% deposit instead, you will usually get a meaningfully better rate — and that makes a difference to your monthly payments over the full mortgage term.
How Much Can I Borrow as a First Time Buyer?
Most lenders offer between 4 and 4.5 times your annual income as a maximum loan. So if you earn £35,000 per year, you could typically borrow between £140,000 and £157,500. If you are buying jointly, lenders usually use the combined income of both applicants.
Some lenders do offer higher income multiples in certain circumstances — particularly for professionals or higher earners. A mortgage broker can help you identify which lenders are likely to offer you the best borrowing terms based on your specific situation.
Are There New First Time Buyer Benefits Coming in 2026?
There are some changes to watch out for in 2026. The government is reviewing the Lifetime ISA scheme, and potential changes are expected during the year. No firm details have been confirmed yet, so it is worth keeping an eye on official government announcements.
The Financial Conduct Authority (FCA) is also reviewing mortgage regulations with the goal of making more flexible products available — particularly for self-employed buyers and first time buyers with non-standard income. Any changes from this review are expected to be announced in 2026.
On the home-buying process itself, the government has signalled plans to make conveyancing faster, clearer, and more digital. These changes would benefit all buyers, but first time buyers — who are going through the process for the first time — stand to gain the most.
Which First Time Buyer Scheme is Right for Me?
The honest answer is that it depends on your situation. There is no single scheme that works for everyone. Here is a simple way to think about it:
| Your Situation | Most Relevant Scheme |
| Still saving, aged 18–39 | Lifetime ISA |
| Ready to buy, only have a 5% deposit | Freedom to Buy (Mortgage Guarantee Scheme) |
| Cannot afford full ownership | Shared Ownership |
| Buying a new-build in England | First Homes Scheme |
| Council tenant for 3+ years | Right to Buy |
| Buying a new-build in Wales | Help to Buy Wales (closes Sept 2026) |
| Building your own home | Help to Build |
Many buyers actually combine schemes. For example, you might use a LISA to build your deposit, then use the Freedom to Buy scheme to get a 95% mortgage. Talking to a qualified mortgage advisor is the best way to figure out exactly which combination works for your income, savings, and the area you are buying in.
First Time Buyer Benefits: England vs Scotland vs Wales vs Northern Ireland
First time buyer benefits are not the same across the whole of the UK. Each nation has its own property tax system and its own version of some schemes. Here is a quick comparison:
| Benefit | England | Scotland | Wales | Northern Ireland |
| Stamp Duty Relief | 0% up to £300,000 | LBTT 0% up to £175,000 | LTT — different bands | Same as England (SDLT) |
| Help to Buy Equity Loan | Closed (2023) | Not available | Open until Sept 2026 | Not available |
| Shared Ownership | Available | Shared equity schemes (LIFT) | Available | Available |
| First Homes Scheme | Available | Not available | Not available | Not available |
| Right to Buy | Available | Abolished | Available (limited) | Separate scheme |
If you are buying in Scotland or Wales, make sure you check the schemes available in your nation specifically. The rules and eligibility criteria can be quite different from England.
Common Mistakes First Time Buyers Make When Applying for Schemes
Knowing the schemes exist is only half the battle. Many first time buyers make avoidable mistakes that either delay their purchase or cost them money. Here are the most common ones:
• Waiting too long to open a Lifetime ISA: Not opening a LISA early enough. The sooner you open one, the sooner the government bonus starts building. You can only get a maximum of £1,000 per tax year, so starting late means missing out on free money.
• Misunderstanding the LISA withdrawal penalty: The 25% LISA withdrawal charge is not just the bonus — it actually takes more than the bonus back, leaving you with less than your own savings if you withdraw for the wrong reason. Withdrawals should only be made to buy a qualifying first home or in retirement.
• Assuming all properties qualify: Not every scheme is available on every property type or in every area. First Homes, for example, only applies to certain new-build properties designated by local councils.
• Underestimating Shared Ownership costs: With Shared Ownership, you pay a mortgage on your share AND rent on the rest, plus service charges. Some buyers do not budget for all three and find themselves stretched.
• Not using a mortgage broker: Many people go straight to their bank. A mortgage broker has access to far more lenders and knows which ones are most likely to approve your application and offer the best rate for your deposit size and income.
• Skipping the mortgage in principle: You can lock in a mortgage offer before you have an accepted offer on a property. Getting a mortgage in principle first shows estate agents and sellers you are serious — and it often means a faster process once you do find a home.
Read this guide: Negotiation Tips for First‑Time Buyers, we are pretty sure it will work for you.
Final Words
There is a lot of help available to first time buyers in the UK in 2026 — more than most people realise. The key is knowing what is out there and making sure you use the right combination of schemes for your situation. Stamp duty relief, the Lifetime ISA, the Freedom to Buy scheme, Shared Ownership, and the First Homes Scheme are all real, meaningful benefits that can make the difference between being able to buy and having to wait.If you are ready to take the next step, BM14 Finance is here to help. Our expert mortgage advisors specialise in helping first time buyers understand every option available to them — and making the mortgage process as smooth and simple as possible. We coverfirst time buyer mortgages, remortgaging, buy-to-let, and home mover guidance. On top of that, we offer a full range of insurance services: traditional life insurance, income protection, critical illness cover, over 50s cover, whole of life insurance, and buildings and contents insurance. Do not go through this process alone. Get in touch with BM14 Finance today and let us help you get the keys to your first home.