Help to Buy Scheme: What Replaced It for First-Time Buyers?
The main Help to Buy equity loan has ended, so first-time buyers now need to compare the replacement routes carefully.
Key points
- The Help to Buy equity loan closed to new applications on 31 October 2022.
- There is no exact replacement, so buyers now combine savings, schemes and incentives.
- Shared ownership and First Homes can help, but both come with restrictions.
Is Help to Buy still available?
The Help to Buy equity loan is no longer available to new applicants in England. The final 2021 to 2023 version closed to new applications on 31 October 2022, and final completions took place in 2023.
If you are buying today, be careful with old guides or developer adverts that still refer to Help to Buy as if it is active. Current buyer support usually comes from a different scheme, a savings product, a developer incentive or a mortgage product.
Current alternatives at a glance
| Option | How it helps | Main catch |
|---|---|---|
| Lifetime ISA | 25% savings bonus | First home must cost £450,000 or less |
| Shared ownership | Lower initial mortgage and deposit | Rent, service charge and resale rules |
| First Homes | 30% to 50% discount on selected homes | Eligibility and resale restrictions |
| Developer incentives | Deposit, flooring, appliances or mortgage support | May affect valuation or mortgage terms |
Shared ownership: useful, but not simple
Shared ownership lets you buy a share of a home and pay rent on the rest. It can lower the deposit and mortgage needed upfront, but the full monthly cost can still be high once rent, service charge and staircasing costs are included.
- Check the initial share you can afford.
- Model rent increases on the unsold share.
- Read the lease and service-charge terms carefully.
- Ask how resale works if you need to move quickly.
First Homes: the discount with strings attached
First Homes can offer selected new builds to eligible first-time buyers at 30% to 50% below market value. The same percentage discount stays with the home when it is sold again, which keeps it affordable for future buyers.
The trade-off is that your future resale market is restricted. Local connection rules, key-worker priorities, income caps and price caps can also apply depending on the local authority and the development.
Developer incentives: what to check
Many new-build developers use incentives such as deposit contributions, mortgage subsidies, legal-fee support, part exchange, flooring or upgraded appliances. These can be useful, but they are not all equal.
- Ask whether the incentive is included in the mortgage valuation.
- Check if the lender caps acceptable incentives.
- Compare the net price against similar completed homes nearby.
- Do not ignore estate charges, leasehold terms or service charges.
Sources and further reading
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