Government Schemes and Incentives: Your Path to Homeownership
Buying your first home can feel like chasing a unicorn—exciting but just out of reach. With soaring house prices and hefty deposits, many Gen Z and Millennials in the UK feel priced out. Fortunately, government schemes like First Homes, Deposit Unlock, and Right to Buy are designed to make homeownership achievable. This guide breaks down these initiatives in a clear, relatable way, packed with actionable info to help you secure your future home.
First Homes: Discounted New Builds for First-Time Buyers
The First Homes scheme offers new-build homes at a 30%–50% discount off market value, making it a game-changer for first-time buyers, especially key workers or those tied to a specific area. The discount remains on the property forever, ensuring affordability for future buyers.
How It Works
Aspect
Details
Discount
30%–50% off market value for new-build homes.
Residence Requirement
Must be your main residence (no holiday homes or buy-to-lets).
Resale Rule
Discount is passed on to the next eligible buyer.
Price Caps (After Discount)
£250,000 outside London, £420,000 in London.
Eligibility
Criteria
Details
First-Time Buyer
You (and any co-buyers) must never have owned a home (per Stamp Duty rules).
Income
Individual/joint income under £80,000 (£90,000 in London) from prior tax year.
Local Connection
Some councils prioritise locals or key workers for the first 3 months.
Armed Forces
Current members, veterans (within 5 years), or widowed/divorced spouses prioritised.
Deposit
At least 5% of the discounted price.
Mortgage
Must cover at least 50% of the discounted price.
How to Apply
Find a First Home: Contact developers or estate agents to identify eligible properties. Check with your local council or developers like Linden Homes or Barratt Homes.
Submit Application: The developer or estate agent verifies your eligibility. You may need to pay a refundable reservation fee for new builds.
Council Approval: The local council reviews and confirms your eligibility.
Secure Financing: Apply for a mortgage (95% loan-to-value mortgages are available from lenders like Halifax or Nationwide). You can use a Lifetime ISA or Help to Buy ISA for the deposit.
Complete Purchase: Work with a conveyancer to finalise legal documents and exchange contracts.
Why It’s Great
Benefit
Details
Lower Deposit
E.g., a £200,000 home with 30% discount costs £140,000; 5% deposit is £7,000.
Affordable Mortgage
Smaller purchase price means lower monthly repayments.
Community Focus
Prioritises locals and key workers.
No Stamp Duty
No stamp duty if discounted price is £300,000 or less for first-time buyers.
Things to Consider
Consideration
Details
Resale Restrictions
Must sell to another First Homes buyer at same discount, limiting profits.
Limited Availability
Not all developers offer First Homes; research local options.
Local Criteria
Some councils set additional rules (e.g., residency duration) for first 3 months.
Deposit Unlock: Low-Deposit New Builds for All
Deposit Unlock helps buyers struggling with large deposits by allowing a new-build purchase with just a 5% deposit. It’s open to first-time buyers and existing homeowners, backed by housebuilders to make 95% loan-to-value (LTV) mortgages accessible.
How It Works
Aspect
Details
Deposit
5% of purchase price with a 95% LTV mortgage.
Insurance
Housebuilders (e.g., Barratt, Taylor Wimpey) fund insurance to protect lenders.
Max Mortgage Value
£750,000 (some lenders allow up to £833,250).
Availability
England, Wales, Scotland on selected properties.
Eligibility
Criteria
Details
Buyer Type
Open to first-time buyers and existing homeowners.
Property
Must be a new-build from a participating developer (e.g., David Wilson Homes).
Deposit
Minimum 5% of purchase price.
Mortgage
Requires a 95% LTV mortgage from a participating lender (e.g., Accord, Perenna).
Exclusivity
Property must be your only mortgaged home (no buy-to-lets or second homes).
Other Schemes
Cannot be combined with other offers (e.g., Part Exchange).
How to Apply
Find a Home: Search for new builds on participating developers’ websites (e.g., Keepmoat, Bellway). Confirm the property is part of Deposit Unlock.
Speak to a Sales Executive: They’ll verify eligibility and connect you with a New Homes Mortgage Adviser.
Get Confirmation: The developer provides a letter for your Deposit Unlock mortgage application.
Apply for Mortgage: Work with a lender or broker (e.g., L&C Mortgages) to secure a 95% LTV mortgage.
Reserve Your Home: Once approved, reserve the property and complete the purchase.
Why It’s Great
Benefit
Details
Low Deposit
E.g., for a £200,000 home, 5% deposit is £10,000—ideal for tight savings.
Competitive Rates
Insurance backing ensures better rates than typical high-LTV mortgages.
Own 100%
Unlike Shared Ownership, you own the full property from day one.
Flexible
Available to first-timers and movers, with no income caps.
Things to Consider
Consideration
Details
Limited Lenders
Few lenders (e.g., Accord, Perenna) offer Deposit Unlock mortgages.
New-Build Premium
New builds may lose value initially as they’re no longer “brand new.”
Availability
Only available on selected plots; some developers prioritise other schemes.
Right to Buy: Own Your Council Home
Right to Buy allows council tenants to purchase their home at a discount, rewarding long-term tenancy. Discounts can be substantial, often covering the entire deposit.
How It Works
Aspect
Details
Discount
£16,000–£38,000 based on tenancy length, property type, and region.
Repayment Rule
If sold within 5 years, repay 100% of discount in year 1, decreasing by 20% per year.
Resale Rule
Within 10 years, offer home back to council/social landlord at market value.
Availability
Applies to eligible council homes across the UK.
Eligibility
Criteria
Details
Tenancy
At least 3 years as a public sector tenant (council, housing association, NHS, etc.).
Property
Must be your main home and not exempt (e.g., sheltered housing).
Legal Status
No debt issues, possession orders, or tenancy fraud.
Preserved Right to Buy
If council home transferred to a housing association, you may still qualify.
Joint Buyers
Family members (spouse, civil partner, or those over 18 living there 12+ months) can share purchase.
How to Apply
Contact Your Landlord: Request a Right to Buy application form (available online or by phone).
Submit Details: Provide tenancy history, family member details, and prior discounted purchase info.
Valuation: The council assesses the property’s market value and calculates your discount.
Secure Financing: Apply for a mortgage or use savings; the discount often covers the deposit.
Complete Purchase: Work with a solicitor to finalise the sale. Contact Right to Buy Agents or the Ministry of Housing for disputes.
Why It’s Great
Benefit
Details
Big Discounts
E.g., a £38,000 discount could cover your deposit and more.
No Deposit Needed
Discount often exceeds the required deposit.
Familiar Home
You’re buying a place you already know and love.
Long-Term Security
Ownership offers stability and potential equity growth.
Things to Consider
Consideration
Details
Repayment Rules
Selling within 5 years requires repaying part/all of the discount.
Maintenance Costs
You’re responsible for repairs and upkeep as a homeowner.
Eligibility Limits
Some housing association tenants may qualify only for Right to Acquire (£9,000–£16,000 discount).
Maximising Your Savings: Pairing with a Lifetime ISA
All three schemes pair well with a Lifetime ISA (LISA), a savings account that boosts your deposit. If you’re 18–39, save up to £4,000 annually, and the government adds a 25% bonus (up to £1,000 per year). Use it for a home costing £450,000 or less, or for retirement. Non-qualifying withdrawals incur a 25% penalty.
Example
Action
Outcome
Save £4,000 in LISA
Get £1,000 bonus, totaling £5,000.
Apply to First Homes
For a £200,000 home (discounted to £140,000), 5% deposit is £7,000; LISA covers most after just over a year.
Tips
Tip
Details
Start Early
Open a LISA ASAP, even with a small amount, to start the bonus clock.
Partner Bonus
If buying with a partner, both can use a LISA, doubling the bonus.
Choose Provider
Check providers like Hargreaves Lansdown or Moneybox for low-fee options.
Which Scheme Is Right for You?
Scheme
Best For
Deposit Needed
Key Benefit
Catch
First Homes
First-time buyers, key workers, locals
5% of discounted price
30%–50% off new builds
Discount stays on resale
Deposit Unlock
First-timers and movers with small savings
5% of full price
Access to 95% mortgages
Limited lender choice
Right to Buy
Council tenants
Often covered by discount
Big discounts (£16,000–£38,000)
Repay discount if sold within 5 years
Questions to Ask Yourself
Question
Consideration
Budget
Can you afford a 5% deposit, or do you need a discount to cover it?
Location
Are you tied to an area where First Homes are available?
Tenancy
Are you a council tenant with 3+ years for Right to Buy?
Future Plans
Will you stay long-term, or might you sell soon, affecting resale rules?
Action Plan: Next Steps
Research Availability: Check GOV.UK, developer websites (e.g., Barratt, Taylor Wimpey), or your council for scheme details.
Get Advice: Speak to a mortgage broker (e.g., L&C or Mortgage Advice Bureau) to confirm eligibility and find the best mortgage deal.
Start Saving: Open a Lifetime ISA and set a monthly savings goal to hit your deposit target.
Contact Developers or Landlords: For First Homes or Deposit Unlock, reach out to developers; for Right to Buy, contact your council or housing association.
Stay Informed: Schemes evolve, so follow updates on GOV.UK or sites like MoneySavingExpert.
Wrap it Up
Owning a home is about building wealth, security, and a future you control. First Homes, Deposit Unlock, and Right to Buy cut through the barriers of high house prices, offering a real shot at homeownership. Whether it’s a discounted new build, a low-deposit mortgage, or buying your council home, there’s a path for you. Take the first step today, and you’ll be closer to unlocking your front door.
Government-Backed Programs
First Homes Scheme Official GOV.UK portal for the 30-50% discount scheme for first-time buyers on new builds.
Right to Buy Government guide for council tenants purchasing their homes with discounts up to £116,200 (London).
