First-Time Buyer Mortgage Guide United Kingdom 2026

Help to Buy: What Happened and What Comes Next

The Help to Buy equity loan scheme was one of the UK government’s flagship first-time buyer initiatives, allowing buyers in England to borrow up to 20% of a new-build property’s value interest-free for the first five years (40% in London). However, the scheme officially closed to new applications on 31 March 2023, meaning it is no longer available to buyers starting their journey in 2026. If you were hoping to use Help to Buy, you will need to consider the alternatives now on offer.

The closure of Help to Buy does not mean you are without support. The government and lenders have worked to ensure that other schemes fill the gap, including the 95% mortgage guarantee scheme, Shared Ownership, and the Lifetime ISA bonus. Each of these has its own eligibility rules and financial implications, so it is worth taking the time to understand which combination best suits your circumstances.

It is also worth noting that Wales, Scotland, and Northern Ireland operate their own devolved housing schemes, some of which have different terms and closing dates. If you are buying outside England, check with your devolved government’s housing agency for the most up-to-date assistance available in your region.

Lifetime ISA: Your Most Valuable Savings Tool in 2026

The Lifetime ISA (LISA) remains one of the most compelling savings vehicles available to first-time buyers in 2026. You can open a LISA if you are aged between 18 and 39, and contribute up to £4,000 per tax year. The government adds a 25% bonus on top of everything you save, meaning you receive up to £1,000 in free money every year. Over a five-year savings period, that could amount to £5,000 in government bonuses alone, all within your annual £20,000 ISA allowance.

To use your LISA for a property purchase, the home must cost no more than £450,000, it must be your first residential property, and you must use a mortgage — cash purchases do not qualify. The LISA must also have been open for at least 12 months before you use it. Your solicitor or conveyancer will request the funds directly from your LISA provider as part of the completion process, so the bonus is seamlessly integrated into your deposit.

Be aware that withdrawing funds from a LISA for any purpose other than a qualifying first home purchase, terminal illness, or retirement after age 60 triggers a 25% government withdrawal charge. This charge effectively claws back more than just the bonus on the amounts you contributed, so the LISA works best for buyers who are committed to saving specifically for a property. Providers such as Monzo, Hargreaves Lansdown, and various banks offer stocks-and-shares or cash LISAs, each with different risk profiles and interest rates.

95% Mortgage Guarantee Scheme and Other Mortgage Options

The 95% mortgage guarantee scheme allows first-time buyers — and home movers — to purchase a property with just a 5% deposit. Under the scheme, the government provides lenders with a guarantee on the portion of the mortgage between 80% and 95% of the property value, reducing the lender’s risk and encouraging them to offer high loan-to-value products. Major lenders including Barclays, HSBC, Lloyds, NatWest, and Santander UK have all participated in the scheme at various points, and similar high loan-to-value mortgages remain available in 2026.

While a 5% deposit opens the door sooner, it is worth understanding the trade-offs. Higher loan-to-value mortgages typically attract higher interest rates, meaning your monthly repayments and the total amount repaid over the mortgage term will be greater than if you saved a larger deposit. Use a mortgage comparison tool to model different deposit sizes against representative interest rates, and factor in the Lifetime ISA bonus as part of your deposit-building strategy.

Before approaching a lender formally, obtain a mortgage in principle (MIP), sometimes called a decision in principle or agreement in principle. This is a conditional statement from a lender indicating how much they are willing to lend based on a soft credit check and your declared income and outgoings. An MIP strengthens your position when making an offer on a property and helps you house-hunt within a realistic budget. Remember that a full mortgage application involves a hard credit check, which will appear on your credit file.

Stamp Duty Relief, Shared Ownership, and Buying Costs

In England, first-time buyers benefit from Stamp Duty Land Tax (SDLT) relief on properties up to £625,000. You pay no SDLT on the first £425,000 of the purchase price, and 5% on the portion between £425,001 and £625,000. If the property costs more than £625,000, the standard SDLT rates apply and no first-time buyer relief is available. In Scotland, Land and Buildings Transaction Tax (LBTT) applies, and in Wales it is Land Transaction Tax (LTT) — each with their own first-time buyer thresholds. Always verify the current rates with your conveyancer before exchanging contracts.

Shared Ownership is a part-buy, part-rent model administered through housing associations and regulated under the broader social housing framework. You purchase a share of a property — typically between 10% and 75% — and pay a subsidised rent on the remaining portion owned by the housing association. You can increase your share over time through a process called staircasing, with the goal of eventually owning 100% outright. Shared Ownership properties are always leasehold, so you must carefully review the lease length, service charges, and any ground rent provisions before committing.

Beyond your deposit and SDLT, budget carefully for additional buying costs. Conveyancing fees typically range from £1,000 to £2,500 depending on property complexity and the solicitor chosen. A homebuyer survey costs around £400 to £1,500, while a full structural survey can exceed £1,500 — both are strongly recommended over a basic mortgage valuation. You will also face mortgage arrangement fees, which some lenders allow you to add to the loan (though this increases the total interest paid), plus removal costs, buildings insurance from the day of exchange, and any initial home improvements.

Conveyancing, Surveys, and the Legal Process Explained

Once your offer is accepted, the legal process of transferring property ownership — conveyancing — begins. Your conveyancer or solicitor will conduct local authority searches, review the title deeds, raise enquiries with the seller’s solicitor, and ensure the mortgage funds are in place before exchange of contracts. Exchange is the legally binding moment when both parties commit; completion is when the keys are handed over, usually one to four weeks later. Throughout this process, FCA-regulated mortgage lenders and PRA-authorised banks are bound by strict conduct rules designed to protect borrowers, and your deposit in a solicitor’s client account is held under Solicitors Regulation Authority (SRA) rules rather than FSCS protection — an important distinction to understand.

A property survey is separate from the mortgage valuation your lender commissions solely for its own purposes. A RICS HomeBuyer Report provides a condition rating for each element of the property and flags any urgent defects, while a Building Survey (Level 3) is a comprehensive structural inspection suited to older, larger, or unusual properties. Skipping an independent survey to save money is a false economy — undiscovered defects such as subsidence, damp, or roof problems can cost tens of thousands of pounds to remediate. Always instruct a surveyor who is registered with the Royal Institution of Chartered Surveyors (RICS) to ensure professional standards and recourse if things go wrong.

Frequently Asked Questions