Buying your first home in the UK has never been easy—but 2025 might just be the most opportunity-rich year yet.
With new government initiatives, refreshed discount schemes, and increased support for low-deposit buyers, the landscape is shifting fast.
Whether you’re just starting to save or already house-hunting, knowing what help is available can make all the difference.
In this article, we break down the key First-Time Buyer Schemes 2025 has to offer—what’s changed, who qualifies, and how to make the most of each option.
First Homes Scheme
Best for: Key workers, local residents, and young buyers
Discount: 30–50% off market value
Max Price Post-Discount: £250,000 (£420,000 in London)
How it works:
The First Homes Scheme offers newly built properties at discounted prices to eligible first-time buyers. The discount is locked into the property, so it carries over to future resales—keeping homes affordable in the long term.
Updates in 2025:
- More councils now offer 40–50% discounts in high-cost areas.
- Expanded eligibility for NHS staff, teachers, police, and armed forces veterans.
- Some developers now offer additional incentives, such as free furnishings or help with legal fees.
Limitations:
- Only applies to selected new builds.
- Strong local connection criteria can limit options.
- Resale restrictions may impact future equity growth.
Shared Ownership
Best for: Buyers with low deposits and incomes
Minimum share purchase: 10% (was 25%)
Rent: Paid on remaining share (typically 2.75% of unsold value)
How it works:
You buy a percentage of a property (between 10–75%) and rent the rest from a housing association. Over time, you can buy additional shares (called “staircasing”) until you own 100%.
2025 changes:
- Staircasing can now be done in 1% increments (down from 10%).
- Repairs and maintenance covered for the first 10 years.
- Lower deposits now accepted by many lenders.
Limitations:
- You’re still paying rent, even as an owner.
- Selling can be complex—housing associations often have the right of first refusal.
- Not all lenders support Shared Ownership mortgages.
Lifetime ISA (LISA)
Best for: Long-term savers aged 18–39
Bonus: 25% government top-up on savings (max £1,000/year)
How it works:
You can save up to £4,000 annually in a Lifetime ISA, and the government adds 25%. Funds can be used to buy a first home (up to £450,000) or saved until retirement.
2025 update:
The LISA remains unchanged, though there are whispers of a potential boost to the bonus cap or home price limit in the Autumn Statement. Currently, it’s still one of the best ways to build a deposit over time.
Limitations:
- Penalty for early withdrawal (except for buying your first home).
- Property cap (£450,000) hasn’t changed since launch—an issue in London and the South East.
Mortgage Guarantee Scheme (Extended to 2025)
Best for: Buyers with only a 5% deposit
How it works:
The government guarantees part of the loan, encouraging lenders to offer 95% LTV mortgages. Originally launched in 2021, the scheme was extended to December 2025.
Pros:
- Makes high-LTV borrowing safer for lenders.
- Widely available across lenders.
Limitations:
- Doesn’t reduce monthly payments or property prices—just increases access.
- Interest rates on 95% mortgages can still be high.
Help to Build Scheme
Best for: Self-builders
How it works:
Offers equity loans up to 20% (40% in London) for people building their own homes. Aimed at helping more people build custom homes with lower up-front costs.
Updates in 2025:
- Broader access for first-time buyers without prior land or building experience.
- Applications streamlined with digital planning tools.
Limitations:
- More complex than buying a standard home.
- Requires upfront planning and land acquisition.
Shared Ownership vs. First Homes Scheme – Which Is Better?
If you’re weighing up the two most popular first-time buyer schemes—Shared Ownership and First Homes—here’s a quick side-by-side comparison:
| Feature | Shared Ownership | First Homes Scheme |
|---|---|---|
| Ownership | Partial, increases over time | Full, from day one |
| Initial Cost | Lower deposit (10% share) | Lower purchase price (30–50% off) |
| Ongoing Costs | Mortgage + rent | Mortgage only |
| Flexibility | Can staircase gradually | Must sell at same discount |
| Property Type | New builds & resales | New builds only |
| Restrictions | Rent, maintenance, resale process | Local ties, price cap, resale conditions |
| Ideal For | Low income/deposit buyers | Buyers who qualify for large discounts and plan to stay long-term |
Verdict:
If you’re looking for maximum affordability and flexibility, Shared Ownership can be the better choice, especially if you’re unsure about staying in one place long-term. However, if you’re eligible and plan to settle in the same area, First Homes offers unbeatable discounts and full ownership from day one—often with fewer ongoing costs.
Final Thoughts
2025 is a big year for first-time buyers in the UK. The government is clearly pushing hard to make homeownership more achievable. But the system is still complex, and the right scheme depends heavily on your situation—income, location, job, deposit size, and how long you plan to stay put.
Here’s what to do next:
- Check your eligibility for multiple schemes—you may qualify for more than one.
- Speak to a mortgage advisor who’s experienced with government-backed schemes.
- Don’t rush—some of the new offers, especially in high-discount First Homes areas, are competitive and worth waiting for.
The window of opportunity is wide open right now, but it won’t stay that way forever. If you’re serious about buying your first home in 2025, now’s the time to act smart.
