Help to Buy Is Gone — Here Are 6 Better Alternatives for First-Time Buyers in 2026

Help to Buy equity loans came with strings. Buyers could only purchase new-build homes. Regional price caps meant the scheme was near-useless in London unless you found a studio flat. After five years, the government charged interest on its equity loan stake — starting at 1.75% and rising with CPI plus 2% annually. Many buyers found themselves trapped, unable to remortgage or sell without repaying a loan that had grown with house prices.

The current alternatives remove most of these friction points. Shared Ownership lets you buy resale properties, not just new builds. The Lifetime ISA works with any property under £450,000. The Mortgage Guarantee Scheme imposes no property type restriction at all. For most first-time buyers earning under £80,000, today's options offer a clearer path to ownership with fewer long-term costs.

Shared Ownership lets you purchase between 25% and 75% of a property. You pay rent on the share you do not own, typically 2.75% of the property value per year. The critical detail: your deposit is 5% of your share, not 5% of the whole property.

On a £250,000 home, buying a 25% share means you need a mortgage of £59,375 and a deposit of just £3,125. Monthly rent on the remaining 75% runs to roughly £430. Add a mortgage payment of around £370 (at 4.5% over 25 years) and your total monthly cost sits near £800 — often cheaper than renting the same property outright.

You can "staircase" upward, buying additional shares over time until you own the property outright. Since 2024, the government's reformed model gives you a 10-year repair-free period on new-build shared ownership homes.

Shared Ownership suits buyers with smaller deposits and moderate incomes. The trade-off is clear: you pay rent on what you do not own. But for anyone priced out of a full purchase, it remains the lowest-deposit route to ownership. Check eligibility and find available homes on the gov.uk Shared Ownership page.

First Homes offers new-build properties at a 30% to 50% discount on market value. The discount is locked to the property permanently — when you sell, the next buyer gets the same percentage off. Joint household income must be below £80,000, or £90,000 in London.

A home valued at £300,000 with a 30% First Homes discount costs £210,000. With a 5% deposit (£10,500) and a mortgage at 4.5%, monthly repayments come to roughly £1,110 over 25 years. That same property without the discount would cost £1,590 per month — a saving of £480 every month.

The catch: availability is patchy. First Homes are tied to specific developments and local councils set additional criteria (key workers, local connection). You cannot use First Homes on existing properties. If there is a First Homes development in your area and you qualify, the discount is substantial. If there is not, move on to the next option.

Details and eligibility are on gov.uk.

The Lifetime ISA is the closest thing to free money in UK personal finance. Save up to £4,000 per year and the government adds a 25% bonus — up to £1,000 annually. Open one at 18 and max it out every year until you buy at 39, and you will have accumulated £33,000 in government bonuses alone.

You must be aged 18 to 39 to open a LISA. The property must cost £450,000 or less. You need to have held the account for at least 12 months before using it. Withdrawing for any non-qualifying purpose triggers a 25% penalty on the entire withdrawal — which means you lose some of your own money, not just the bonus.

A couple both holding LISAs can combine their bonuses. Two people saving £4,000 each per year for three years accumulate £24,000 in savings plus £6,000 in bonuses — a £30,000 deposit built from £24,000 of actual saving. Pair that with the Mortgage Guarantee Scheme for a 95% LTV deal and you have a powerful combination.

The LISA works best as a medium-term savings vehicle. If you are buying within 12 months, you cannot use it — open one today regardless, to start the clock. For guidance on choosing between cash and stocks & shares LISAs, see our ISA guide.

The Mortgage Guarantee Scheme allows lenders to offer 95% LTV mortgages with a government-backed guarantee on the riskiest portion of the loan. Originally launched as a temporary measure, the government announced a permanent version for 2026.

This scheme does not lend you money or take a stake in your property. It simply makes lenders more willing to approve 5% deposit mortgages by reducing their risk. You deal directly with your mortgage provider — there is no separate government application.

At the current base rate of 3.75%, 95% LTV mortgage rates from major lenders sit between 4.3% and 5.2%. On a £250,000 property with a £12,500 deposit, monthly repayments range from £1,290 to £1,420 over 25 years.

The scheme works on new builds and existing properties. There are no income caps. First-time buyer stamp duty relief means you pay 0% on the first £300,000 and 5% on any amount between £300,001 and £500,000. On a £350,000 purchase, that saves you £2,500 compared to the standard rate.

Deposit Unlock is a housebuilder-backed scheme for new-build purchases. Major developers including Barratt, Persimmon, and Taylor Wimpey participate. You put down a 5% deposit and the housebuilder provides insurance to the lender covering a portion of the loan risk — similar to the Mortgage Guarantee Scheme but funded privately.

The advantage over Help to Buy: no government equity loan to repay, no rising interest charges after five years. You own 100% of the property from day one. The limitation: it only works on participating new-build developments.

Rent to Buy offers new-build rental homes at roughly 80% of market rent, giving you breathing room to save a deposit while living in the property. After a set period (usually five years), you have the option to purchase your home through Shared Ownership or outright. Availability is limited and managed through local housing associations.

Both schemes suit specific situations. Deposit Unlock is worth investigating if you want a new build anyway. Rent to Buy makes sense if you need time to save but want to commit to a specific area. Neither replaces the broader schemes above, but they fill genuine gaps.

Smallest possible deposit, buying soon: Shared Ownership. A 25% share on a £250,000 property needs just £3,125 upfront.

Deposit saved, want maximum flexibility: Mortgage Guarantee Scheme. No property type restrictions, no equity loans, works everywhere. Combine with a LISA for an extra deposit boost.

Buying in 2-5 years, want to maximise savings: Open a Lifetime ISA immediately. Even one year of £4,000 contributions adds £1,000 in free government money. A couple can build £10,000 in bonuses over two years.

Income under £80,000, flexible on location: Check First Homes availability in your target area. A 30% discount dwarfs any other scheme's benefit — if you can find one.

Set on a new build: Compare Deposit Unlock and Mortgage Guarantee side by side. Both offer 5% deposit routes, but Deposit Unlock may come with developer incentives.

Welsh buyer: Help to Buy Wales remains open until September 2026. Use it if eligible — but open a LISA alongside it regardless.

For a detailed look at how stamp duty relief and the personal allowance of £12,570 affect your buying power, see our tax guide. And if you are weighing up how to grow your deposit in the meantime, our savings hub compares the best accounts available right now.

This article is for informational purposes only and does not constitute financial advice. You should seek independent financial advice before making any investment decisions.