Calling All First Time Buyers!

We know, buying your first home can feel both exciting and overwhelming. Why? Because we have been there ourselves. However, with rising house prices and ever-changing rules, it’s no surprise that many first time buyers are unsure of where to begin. The good news? There are first time buyer grants and schemes designed to make stepping onto the property ladder that little bit easier.

At HMS Mortgages, we’ve put together this guide to the 6 great first time buyer grants available in England and Wales, plus an overview of the stamp duty relief you could benefit from. Whether you’re buying in Cardiff, Swansea, London, or beyond, our team is here to help you navigate the options and make the process as smooth as possible.

1. Lifetime ISA (LISA)

If you’re aged between 18 and 39, a Lifetime ISA is one of the most popular first time buyer grants to help boost your savings. Let me explain this a little bit more:

• You can save up to £4,000 per tax year, and the government adds a 25% bonus (up to £1,000 annually).
• You must make your first payment into the ISA before you are 40, and you can make payments into it until you are 50.
• The funds can be used to buy your first home worth up to £450,000, or left for retirement.
• Be warned, withdrawals for other purposes incur a 25% penalty.

Therefore, the government is willing to top up your savings as long as the money is used to buy your first home or for your retirement. This is a great way to build your deposit steadily while making the most of government support.

Theoretically, if you began saving in this ISA from the age of 18, the maximum of £4000 a year, then potentially you could receive £32,000 of free money from the government if you continued saving until the age of 50! Naturally, most youngsters are ready to withdraw the money as a deposit on their first home before they reach the big 5-0. After all, saving the full £4000 a year (plus the government top-up of £1000) for just 5 years will give you £25,000.

2. Shared Ownership / Shared Equity

Shared Ownership is another route under the umbrella of first time buyer grants and schemes. There are different guidelines between England and Wales. You can read the full details on our website page dedicated to Shared Ownership schemes here. However, as a brief summary:

• You can purchase 25–75% of a property and pay rent on the rest.
• You can increase your share gradually (“staircasing”).
• Available UK-wide, with resales often managed by housing associations.

This option makes homeownership accessible in areas where prices are otherwise out of reach. Additionally, it is suitable for first time buyers and those who used to be home owners but can no longer afford to buy now (after a divorce, for example).

3. Help to Buy – Wales (Equity Mortgage)

In Wales, one of the most recognised first time buyer grants is the Help to Buy – Wales scheme (available until September 2026). Sadly, this scheme ended in England in March 2023; however, there are alternative first time buyer grants available to those in England in a scheme called the First Homes Scheme (see below).

How does the Help to Buy scheme work? Buyers can receive a government equity mortgage of up to 20% of the property price. Let’s look at the details:

• You only need a 5% deposit.
• It applies to new-build homes with registered builders only and a maximum property value of £300,000 (Correct at the time of writing, check the latest limits at gov.wales).
• You must take out a Repayment Mortgage to cover the rest of the property price.
• You have 25 years to pay back the equity mortgage to the Welsh government (although you can pay it back at any time during this period).
• If you make a partial repayment on your Equity mortgage, the remaining payment must be at least 5% of the market value of your property.

As first time buyer grants go, this can make a big difference when buying a new-build property in Wales, as you only need to find a small 5% deposit yourself.

4. Homebuy – Wales (Shared Equity)

This Welsh-specific scheme is designed for those most in need of support. It is not available everywhere, but particularly supports those in more rural locations, where there may be fewer opportunities to purchase a home. The key points are:

• It provides equity loans of up to 30% of the property’s value.
• You will need to provide the other 70% through a mortgage or savings.
• You must obtain a mortgage from an approved lender.
• Like the Help to Buy scheme, you must repay the loan when you sell your home. You can repay it before you sell the home, too. In both cases, you will pay the loan back based on the value of the property at the time of repayment.

As one of the lesser-known first time buyer grants, it can be life-changing for buyers in difficult circumstances. (Read about it in full here).

5. Freedom to Buy (Formerly Mortgage Guarantee Scheme) – England Only

This opens the door for buyers with steady income but limited savings. You can read all the information about this first time buyer grant (scheme) on the government website here.

If your main hurdle is saving a large deposit, this scheme is a valuable addition to the list of first time buyer grants (for those in England).

• Enables 95% loan-to-value mortgages (just a 5% deposit).
• Available on homes worth up to £600,000.
• Backed by the government to reduce lender risk.
• Mainly aimed at first time buyers, although it is not restricted to just them.
• You can only apply for a repayment mortgage.

6. First Homes Scheme (England Only)

This scheme, unlike the last, is restricted fully to first time buyers. It is one of the newest first time buyer grants in England, and it is called the First Homes Scheme. Here are the details:

• It offers a 30–50% discount on selected new-build homes.
• Joint income caps apply (£80,000 outside London; £90,000 in London).
• After discount, property price caps are £250,000 outside London or £420,000 in London.
• The discount remains with the property when resold, keeping it affordable for future buyers.
• Councils can set their own eligibility criteria, for example, only key workers or people who live in the area (there are exceptions for those in the armed forces and their families).

This scheme is especially attractive for key workers and local buyers in high-demand areas. For full details about these first time buyer grants, please visit the government website here.

Don’t Forget Stamp Duty Relief

Alongside these first time buyer grants, you can also benefit from stamp duty relief. Here are the details at the time of writing:

• In England, first-time buyers pay no stamp duty on properties worth up to £300,000, and reduced rates up to £500,000.
• In Wales, the equivalent is Land Transaction Tax (LTT). While there isn’t a dedicated first-time buyer relief, you still pay nothing on homes up to £225,000.

Understanding your potential savings here is key, as stamp duty can add thousands to your upfront costs.

How We Can Help

At HMS Mortgages, we specialise in guiding first time buyers across England and Wales. From exploring the right first time buyer grants for your circumstances, to securing the best mortgage deal, we’re here every step of the way.

Visit us at www.hms.wales to see how we can help you take the first step toward your new home.

Final Thoughts about First Time Buyer Grants:

With the right guidance and access to these first time buyer grants, owning your first home is more achievable than you might think. Don’t let the process overwhelm you; support is out there, and our friendly, independent mortgage advisors are ready to help you find it.