Buying your first home in the UK in 2026 requires navigating a set of government schemes, tax reliefs, and lender requirements that can feel overwhelming. The good news: first-time buyers have access to meaningful financial support — from the LISA bonus and shared ownership to stamp duty relief. The bad news: the schemes have conditions, eligibility rules, and trade-offs that many buyers only discover after they've made a decision. This guide explains everything you need to know before you start.
The Affordability Challenge
The average UK house price in early 2026 is approximately £290,000 (Land Registry data). In London, the average exceeds £500,000. The typical first-time buyer needs a 10–15% deposit plus legal fees, surveys, and moving costs. Without strategic use of available schemes, reaching that deposit can take years longer than necessary.
Scheme 1: The Lifetime ISA (LISA) Bonus
The LISA gives first-time buyers a 25% government bonus on savings up to £4,000/year — up to £1,000 per year in free money. Rules for using a LISA to buy a home:
- You must be a first-time buyer
- The property must cost £450,000 or less
- You must have held the LISA for at least 12 months before using it
- The bonus is paid directly to your conveyancer — you don't receive it in cash
- Available at providers including Moneybox, AJ Bell, Hargreaves Lansdown, and Nutmeg
Open a LISA as early as possible to start the 12-month clock. You can combine a LISA with a Help to Buy ISA (if you opened one before 2019) or with a partner's LISA for a couple's purchase.
Scheme 2: Shared Ownership
Shared Ownership lets you buy a share of a property (typically 25–75%) from a housing association and pay rent on the remaining share. You can buy additional shares ("staircasing") over time until you own 100%. Key features:
- Smaller deposit needed — typically 5–10% of the share you buy, not the full property value
- Monthly costs include mortgage payments on your share + rent on the housing association's share + service charges
- Available on new-build and resale shared ownership properties
- Income limits apply (usually £80,000/year, or £90,000 in London)
- Find properties at sharetobuy.com or GOV.UK
Stamp Duty Land Tax (SDLT) Relief for First-Time Buyers
In England (Scotland has LBTT, Wales has LTT), first-time buyers benefit from SDLT relief:
| Property Price | Standard Rate | First-Time Buyer Rate (2026) |
|---|---|---|
| Up to £425,000 | 2% (on £125k–£250k) | 0% (no SDLT) |
| £425,001–£625,000 | 5% | 5% on portion above £425k |
| Above £625,000 | Standard rates apply | No first-time buyer relief |
Mortgage Guarantee Scheme
The UK government's Mortgage Guarantee Scheme allows first-time buyers (and other buyers) to purchase a home with a 5% deposit on properties up to £600,000. Participating lenders include Halifax, HSBC, Barclays, and NatWest. The government guarantees a portion of the mortgage, making lenders more willing to offer 95% LTV deals.
First-Time Buyer Action Plan
1) Open a LISA immediately — even if you're years away from buying. Start the 12-month clock and collect the annual bonus while you save. 2) Use a Stocks & Shares ISA or savings account for any deposit savings above the £4,000 LISA limit. 3) Get a mortgage in principle from a broker before viewing properties. Use a whole-of-market broker (Habito, L&C Mortgages, Trussle). 4) Budget £2,000–£3,000 for conveyancing, £500–£1,500 for a homebuyer survey, and £300–£500 for moving costs — in addition to your deposit.
What to Budget Beyond the Deposit
- Solicitor/conveyancing fees: £1,000–£2,500
- Mortgage arrangement fee: £0–£2,000 (can often be added to mortgage)
- Homebuyer survey (Level 2): £400–£1,000; Building survey (Level 3): £600–£1,500
- Buildings insurance: Required from exchange of contracts; ~£150–£300/year
- Removal costs: £300–£1,500 depending on volume and distance
- Land Registry fee: £20–£910 depending on property price