What’s Available for First Time Buyers in 2025?

With the Help to Buy scheme phased out almost three years ago, property demand outweighing supply, and home building targets continuously missed, it feels more difficult than ever for first-time buyers to get their foot on the property ladder. However, there are four useful schemes in place to help first-time purchasers obtain their dream home – the First Homes Scheme, Shared Ownership, LISA, and Right to Buy. In this piece, we’ll be running you through each of these home-buying schemes, including whether you’re eligible, to help you make your first property purchase as easy and affordable as possible.

The First Homes Scheme

What is the First Homes Scheme?

The First Homes Scheme is a home-buying scheme aimed at first-time buyers that provides considerable discounts on their first property purchase. This first-time buyer government scheme aims to provide local residents with housing solutions, specifically key workers, by offering first-time buyers a discount of between 30 per cent and 50 per cent on any eligible newly built properties when compared to properties of equivalent market value, which the government claims can help buyers save up to £70,000. To be eligible, properties must cost £250,000 or less post-discount, or £420,000 or less in London post-discount.

Who is eligible?

First-time buyers looking to make their first home purchase within their local community. If you are purchasing your property alongside another person, both of you must be purchasing your first home.

What else should I know?

You must be using a mortgage on at least 50 per cent of the property’s purchase price, and the property in question must be located in England. Additionally, you must have an accumulative household annual income of less than £80,000, or £90,000 if based in London. Please note that if your property is involved in the First Homes Scheme, it will remain part of this scheme if you choose to sell your property – as such, you won’t be able to recoup the 30 per cent discount you saved upon initially purchasing your property.

Shared Ownership

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What is shared ownership?

Shared Ownership is a home-buying scheme which allows first-time buyers to purchase a percentage of a property with a traditional deposit and mortgage, and pay rent to a housing association on the remaining portion of the property. This is particularly advantageous for those who have a small deposit available but have the monthly income to comfortably afford mortgage or rent payments. Homeowners can choose to take ownership of more portions of their home in a process called ‘staircasing’, until they eventually own the entire property outright if they choose to do so.

You can buy an initial share of between 10% and 75% of the home’s market value (for new properties under the new Shared Ownership Model) or between 25% and 75% (for older properties or other providers). Under the new model, buyers can buy additional shares in increments as small as 1% per year (for the first 15 years), instead of the previous minimum 10% increments. The new Shared Ownership Model also includes a 10-year period where the landlord covers essential repairs and maintenance, which is a significant change from the traditional model.

Who is eligible?

You will be eligible for this first-time buyer government scheme if your annual household income is below £80,000, or below £90,000 for those living in London.

What else should I know?

Before purchasing your shared ownership property, be sure to clarify what is included in your rent: the nature of shared ownership means that you will partially own a leasehold property, and may still have to pay a service charge, despite technically renting the property in part. You should also clarify who is responsible for any maintenance issues – is it you, or the housing association you are paying rent to? What’s more, your rent may increase over time, as may your service charge.

If you choose to staircase and increase the portion of the property that you own, you must get a valuation, pay for a conveyancing solicitor, and pay more stamp duty – this will get more expensive as the value of your property increases.

Upon sale, if you don’t yet own 100% of your home, you must inform the housing authority you purchased from that you intend to sell. What’s more, you can only sell the portion of your property that you own – the more you own, the more difficult it may be for first-time buyers to afford. However, you will be able to use the capital growth on your portion of the property to put down a deposit on a new home or invest elsewhere.

Lifetime Individual Savings Account (LISA)

This savings account can be used to save up exclusively for the purchase of your first home or your retirement, and the government will contribute an additional 25 per cent to your savings once per year. You can place up to £4,000 per year in the account that is eligible for the 25 per cent bonus, meaning that you will receive an additional £1,000 bonus each year.

Who is eligible?

People between 18 and 39, who haven’t purchased property before, can open a LISA

What else should I know?:

This savings account can only be used for the purchase of your first property or your retirement: to ensure proper use, when you purchase your first home, your conveyancing solicitor will withdraw the funds on your behalf. The account can hold cash, stocks, or a combination of both, and you can continue to deposit into the LISA until you are 50 years of age. When used for a first home, the property’s purchase price must not exceed £450,000

You can withdraw funds for non-property purposes on two conditions: you are over 60, or you have a terminal illness with less than one year to live. If you withdraw for any other purpose that is not for the purchase of a property, you will pay a 25 per cent withdrawal charge on the entire withdrawal amount to counteract the government bonus.

Right To Buy

What is Right To Buy?

This scheme offers eligible council and some housing association tenants the legal right to buy their rented property at a discounted price.

While the scheme remains in place across England, its structure was significantly reformed in late 2024 to better protect the social housing stock, resulting in a dramatic reduction of the maximum discount available to new applicants.

The discount is calculated based on how long you have been a public sector tenant and whether you are buying a house or a flat, subject to a maximum cash limit.

• For Houses: The discount starts at 35% for 3 to 5 years of tenancy and increases by 1% for each year after that, up to a maximum percentage of 70%.
• For Flats: The discount starts at 50% for 3 to 5 years of tenancy and increases by 2% for each year after that, up to a maximum percentage of 70%.

The final discount you receive is whichever is lowest of: the maximum percentage discount, the maximum regional cash discount, or the amount allowable after factoring in the ‘cost floor.

The Right to Buy scheme’s maximum cash discount was significantly reduced for all applications received on or after 21 November 2024, and these lower limits are currently in force. The maximum discount is now set at low, regionally varying caps: in most of London, the limit is just £16,000, with only the boroughs of Barking and Dagenham and Havering retaining a higher cap of £38,000. The South East region generally has a maximum discount of £38,000, though several specific areas within it (such as Oxford, Reading, and Watford) are also capped at the much lower £16,000 figure. For other regions across England, the maximum discount varies between £22,000 and £34,000 (e.g., North East at £22,000 or West Midlands at £26,000). It is important to note that only those tenants who submitted their application before the 21 November 2024 deadline were eligible for the former, much higher maximum discounts of £136,400 in London and £102,400 in the rest of England.

Who is eligible?

You are generally eligible for Right to Buy if you meet all of the following conditions:

• You are a secure tenant of a council or certain housing association properties.
• The property is your only or main home and is self-contained.
• You have had a public sector landlord (e.g., a council, housing association, or NHS trust) for at least 3 years (these years do not need to be consecutive).

You can also make a joint application with a spouse or partner who shares your tenancy, or with up to three family members who have lived with you for the past 12 months.

What else should I know?

• Preserved Right To Buy: If your council home was sold to another landlord (like a housing association) while you were living in it, you may still be able to buy it under Preserved Right To Buy. Check your tenancy agreement or ask your landlord.
• Cost Floor Rule: Your discount will be reduced if your landlord has spent money building or improving the property. This rule prevents the selling price from falling below the amount your landlord has invested over the previous years (now potentially up to 30 years). If the costs exceed the market value, you may receive no discount at all.
• Resale Restrictions: If you sell the property within five years, you must repay all or part of the discount. In some areas, there may be new restrictions on who you can sell to, or an extended period of repayment up to ten years for future applicants.

Ready to get on the property ladder?

Centrick are here to help you make the best decision regarding the purchase of your first home. Whether you’re hoping for more information on your options, looking for shared ownership properties near you, or want some advice on preparing to move into your first home, we’d be delighted to guide you. Our team of experts have an abundance of experience helping first-time buyers in Birmingham, Solihull, Nottingham and beyond! For tailored advice on which first-time buyer government scheme is best for you, contact Centrick using the form below, or browse our range of new homes developments for sale: