Boost for Help to Buy scheme.

Help to Buy Has Closed: What Support Is Available to First-Time Buyers?

The Help to Buy Equity Loan scheme was once one of the Government's main policies for helping buyers with small deposits purchase newly built homes.

Under the scheme, eligible buyers could purchase a new-build property with a deposit of at least 5%, a mortgage and a Government equity loan.

However, Help to Buy is no longer available to new applicants in England. The scheme closed to new applications in October 2022, with final eligible purchases completing by 31 May 2023.

Existing Help to Buy homeowners are still required to manage and eventually repay their equity loans, but prospective buyers must now consider other forms of assistance.

How Did Help to Buy Work?

The final version of Help to Buy in England was restricted to first-time buyers purchasing qualifying new-build properties.

A typical purchase involved:

• a deposit of at least 5%;


• a Government equity loan of up to 20% of the purchase price, or up to 40% in London; and


• a repayment mortgage covering the remaining amount.

The equity loan was interest-free for the first five years. Interest became payable from the sixth year, although the interest payments did not reduce the amount originally borrowed.

Because the loan represented a percentage of the property's value, the amount repayable could rise or fall with the market value of the home.

Why Was Help to Buy Controversial?

Supporters argued that the scheme helped buyers who could afford mortgage repayments but struggled to save a sufficiently large deposit.

Critics argued that it:

• increased demand without sufficiently increasing housing supply;


• supported the prices of new-build homes;


• provided substantial benefits to large developers;


• encouraged some buyers to stretch their finances;


• excluded existing homes from the final scheme; and


• left buyers exposed to rising equity-loan repayment costs.

The central criticism was that helping more people bid for a limited number of homes could increase prices unless accompanied by a substantial rise in construction.

Did Help to Buy Increase House Prices?

There is continuing debate about the effect of Help to Buy on property prices.

The scheme increased the purchasing power of eligible buyers, particularly in the new-build market. This helped some households buy earlier than they otherwise could have.

However, where housing supply remained limited, additional purchasing power may also have supported higher prices.

The effects varied by area. In places with sufficient land, construction capacity and planning approvals, the scheme could encourage additional development. In areas with severe supply constraints, increased demand was more likely to affect prices.

What Happens to Existing Help to Buy Borrowers?

Homeowners with an existing Help to Buy equity loan remain bound by the terms of their agreement.

They may need permission from the Help to Buy administrator before:

• selling the property;


• remortgaging;


• borrowing additional money;


• making structural alterations;


• adding or removing an owner; or


• repaying part of the equity loan.

Interest normally becomes payable from the fifth anniversary of the equity loan, at the beginning of year six.

The equity loan must normally be repaid when:

• the property is sold;


• the mortgage is repaid;


• the equity-loan term ends; or


• another repayment event occurs under the agreement.

The amount repaid is based on the applicable percentage of the property's current market value rather than simply the original cash amount advanced.

What Help Is Available Now?

Although Help to Buy has closed, several schemes may still assist first-time buyers and households unable to purchase at full market value.

First Homes

The First Homes scheme allows eligible first-time buyers in England to purchase certain properties at a discount of at least 30% from market value.

The discount remains attached to the property when it is sold, meaning future qualifying buyers should receive the same percentage reduction.

General eligibility requirements include:

• being aged 18 or over;


• being a first-time buyer;


• having a household income below £80,000, or £90,000 in London;


• obtaining a mortgage covering at least half of the discounted price; and


• meeting any local eligibility or priority requirements.

Availability is limited and depends on qualifying homes being delivered in the relevant area.

Shared Ownership

Shared ownership allows a buyer to purchase a share of a property and pay rent on the remaining share owned by a housing association or other provider.

The buyer may later be able to purchase additional shares through a process known as staircasing.

Costs may include:

• mortgage payments;


• rent on the unsold share;


• service charges;


• estate charges;


• repair costs; and


• fees for purchasing additional shares or selling.

Shared ownership can reduce the initial deposit and mortgage required, but buyers should assess the total monthly cost and the terms of the lease carefully.

Lifetime ISA

A Lifetime ISA currently allows an eligible saver to contribute up to £4,000 in each tax year and receive a Government bonus of 25%, worth up to £1,000 a year.

The account must normally be opened before the saver reaches 40, and contributions can continue until age 50.

For a qualifying first-home purchase:

• the property must cost no more than £450,000;


• the buyer must be purchasing with a mortgage;


• the property must be intended as the buyer's main home; and


• the account must normally have been open for at least 12 months.

A withdrawal charge usually applies if money is taken for a purpose other than a qualifying first-home purchase, later-life saving or specified serious illness.

The Government launched a consultation in June 2026 on a proposed new first-time buyer ISA intended eventually to replace the Lifetime ISA for new applicants. Until a replacement is introduced, eligible savers can continue to open and contribute to Lifetime ISAs under the existing rules.

Mortgage Guarantee Support

Government-backed mortgage guarantee arrangements are intended to encourage lenders to offer mortgages to buyers with deposits as low as 5%.

The guarantee protects the lender against part of its potential loss. It does not protect the borrower from repossession or negative equity.

A 95% mortgage can help a buyer purchase sooner, but it may involve:

• higher interest rates;


• more demanding affordability checks;


• a greater risk of negative equity;


• higher monthly repayments; and


• fewer available products than for buyers with larger deposits.

Local Affordable Housing Schemes

Local authorities and housing providers may offer schemes such as:

• discounted market-sale homes;


• shared ownership;


• rent-to-buy;


• key-worker housing;


• local connection schemes; and


• other affordable home-ownership programmes.

Eligibility, availability and property-price limits differ between areas.

The Continuing Housing Affordability Problem

The closure of Help to Buy has not resolved the broader difficulties faced by first-time buyers.

Many continue to struggle with:

• high house prices relative to income;


• large deposit requirements;


• high private rents reducing the ability to save;


• mortgage affordability tests;


• interest-rate uncertainty;


• a shortage of affordable homes;


• competition from existing owners and investors; and


• significant legal, survey and moving costs.

Support with deposits and mortgages can help individual buyers, but it does not by itself address the underlying shortage of suitable homes.

Housing Supply Remains Central

Long-term affordability depends heavily on whether enough homes are built in the places where people want and need to live.

Barriers to increased supply may include:

• planning delays;


• land availability;


• infrastructure requirements;


• construction costs;


• skills shortages;


• environmental restrictions;


• developer viability;


• local opposition; and


• delays connecting new developments to roads, water and utilities.

Increasing mortgage availability without increasing supply may allow more buyers to compete for the same homes.

Private Renting and First-Time Buyers

Many households remain in the private rented sector while saving for a deposit.

High rent, service costs and household bills can make it difficult to build savings, particularly in areas where housing demand is strong.

Private rental reform may improve security and standards for tenants, but landlords also face:

• taxation changes;


• mortgage costs;


• licensing requirements;


• safety and energy-efficiency obligations;


• repair costs;


• restrictions on possession; and


• increasing regulatory duties.

Where landlords leave the market, the effect on rents will depend on whether properties are sold to owner-occupiers, other landlords or removed from residential use.

Overseas Buyers and the UK Property Market

Changes in the value of sterling can make UK property appear cheaper to buyers using foreign currencies.

However, overseas purchasers must consider:

• Stamp Duty Land Tax surcharges;


• additional-property rates;


• capital gains tax;


• rental income tax;


• anti-money laundering checks;


• exchange-rate movements;


• property management costs; and


• restrictions imposed by mortgage lenders.

Overseas demand is significant in some locations but is only one of many factors affecting national house prices.

What Should First-Time Buyers Consider?

Before applying for any home-ownership scheme, buyers should consider:

• the deposit required;


• mortgage affordability;


• interest-rate changes;


• service charges and estate charges;


• rent payable under shared ownership;


• repair responsibilities;


• restrictions on selling or subletting;


• property tax;


• legal and survey fees;


• the risk of negative equity;


• future family and employment plans; and


• the total monthly cost rather than the headline purchase price.

A reduced deposit can make a purchase possible, but it does not necessarily make the property affordable over the longer term.

Legal Advice When Using a Buying Scheme

A conveyancing solicitor should explain:

• the ownership structure;


• the mortgage conditions;


• equity-loan or shared-ownership obligations;


• restrictions on sale or letting;


• service charges;


• repayment provisions;


• resale restrictions;


• the lease terms;


• the effect of the scheme discount; and


• what happens if the property value rises or falls?

Buyers should use a solicitor experienced in the particular scheme involved.

Finding a Conveyancing Solicitor

Help to Buy is closed to new applicants, but First Homes, shared ownership, Lifetime ISAs, low-deposit mortgages and local housing schemes may still assist eligible buyers.

Each option has different costs, restrictions and risks. Buyers should obtain independent mortgage, financial and legal advice before committing to a purchase.

Use the search facility at the top of this page to find a conveyancing solicitor who can advise on first-time buyer schemes, shared ownership, new-build purchases and affordable housing.

Disclaimer

Solicitors.com is not a firm of solicitors. This article provides general information about home-ownership schemes in England and does not constitute legal, financial, mortgage or tax advice. Schemes, eligibility conditions and financial limits can change.