Schemes to help you buy a home

Shared ownership mortgages

The Shared Ownership scheme lets you buy a share of a home and pay rent on the part you don’t own.

You can buy more shares over time if you're able to. In the past, you could only buy shares in chunks of 10%, but since April 2021, you’ve been able to buy shares as small as 1%.

You’ll usually qualify if your household income is £80,000 a year or less (or £90,000 or less if you live in London).

It’s mainly for first time buyers, but you can also apply if you’ve previously owned a home and can’t afford to buy again, or if you already own a share in a home but want to move. You’ll need to get a Shared Ownership mortgage to buy your share.

Mortgage guarantee scheme

The mortgage guarantee scheme was introduced in 2021 to help people who only have a small deposit.

It’s open to both first time buyers and existing homeowners and covers properties up to £600,000. You’ll only need a 5% deposit, and the Government provides a guarantee to the lender, which gives them extra security in case the mortgage isn’t paid back.

Lenders that use the scheme must offer at least one five-year fixed rate mortgage. This can be helpful if you want to know exactly what your payments will be each month for the next few years.

Some lenders still offer 95% mortgages outside of this scheme, so it’s worth speaking to a L&C mortgage adviser for advice on what might suit you best.

First Homes scheme

The First Homes scheme is for first time buyers and key workers who are struggling to buy in their local area.

It offers new build homes at a discount of at least 30% compared to the full market price. Some areas offer even bigger discounts – up to 50% – depending on local rules.

The same discount stays with the home, even when you sell it, so the next buyer also gets that help. That way, it continues to benefit people in the area.

To qualify, you’ll usually need to earn £80,000 or less a year (£90,000 or less if you live in London), and you must be buying your first home to live in – not to rent out. The home must cost no more than £250,000 after the discount (£420,000 in London).

You’ll still need a mortgage, usually for at least half of the home’s price. Not every development includes these homes, so it’s a good idea to ask if the one you’re looking at takes part in the scheme.

Deposit Unlock

Deposit Unlock is designed to help people buy a new build home with just a 5% deposit.

It’s open to both first time buyers and home movers, but only applies to homes built by developers who have signed up to the scheme.

The way it works is quite simple – the developer pays into an insurance scheme that protects the lender if anything goes wrong. Because of this, lenders are more willing to offer 95% mortgages on new builds (which they’re usually more cautious about).

Own New Rate Reducer

The Own New Rate Reducer scheme is designed to make your monthly mortgage payments cheaper, at least for the first few years.

It works by the developer making a financial contribution that goes directly towards reducing your mortgage interest rate.

This means your payments will be lower at the start, which can really help with affordability. The scheme is only available on new build homes through developers and mortgage lenders who have signed up, so it’s worth checking before you fall in love with a particular home.

The lower rate usually lasts for the first two to five years, and then your mortgage goes back to the lender’s usual terms.