Help to Buy, Shared Ownership & Other 2025 Schemes

With house prices and deposit hurdles still towering for first-time buyers and even home movers, the government has rolled out several support schemes to help bridge the gap. Here are the key options available in England in 2025, what they offer, and who they suit best.

1. Freedom to Buy mortgage guarantee

As of July 2025, the government has permanently introduced the Freedom to Buy mortgage guarantee scheme. This supports lenders in offering 95% loan-to-value mortgages, requiring just a 5% deposit from buyers. By acting as guarantor, the government encourages lenders to maintain low-deposit products even in tighter markets.

·         Who it helps: First-time buyers and home movers with limited savings.

·         Trade-off: Interest rates may be higher; affordability must be carefully assessed.

2. Shared ownership

Shared Ownership allows you to buy a portion of a home, typically between 25% and 75%, while paying rent on the remaining share. Over time, you can increase your ownership through a process called staircasing, eventually reaching full ownership if you choose.

Who It's For

·         Low- to moderate-income households

·         Household income must be:

o   £80,000 or less (outside London)

o   £90,000 or less (within London)

Typically suited to:

o   First-time buyers

o   Those who can't afford a full-market mortgage

o   Previous homeowners unable to buy again (e.g. after a divorce)

o   Existing shared owners looking to move

Pros

·         Lower deposit required (usually 5–10% of the share you're buying)

·         Gradual path to full ownership through staircasing

·         More affordable access to homeownership compared to buying outright

Be Aware

·         Rent is payable on the share you don’t own until you reach 100% ownership

·         Service charges and ground rent apply, regardless of the size of your share

·         Properties are leasehold, with associated conditions and potential costs

·         You are legally a tenant until you own the full property

·         Stamp duty may apply when staircasing to 80% or more ownership

3. Help to Buy: equity loan (closed to new applicants)

The Help to Buy equity loan scheme, closed to new applicants in October 2022, supported first-time buyers purchasing new-builds. While no longer available, many homes bought under the scheme are still on the market, making it important to understand how it works.

Buyers received a government loan of up to 20% of the property price (40% in London), needing only a 5% deposit and a 75% mortgage. The loan was interest-free for five years, after which interest is charged annually.

Importantly, the loan must be repaid based on the current market value, not the original amount borrowed, leading to issues for some if property values fall.

 

Key Points

·         Closed to new applications in October 2022; purchases completed by March 2023.

·         Available only for new-build homes from registered developers.

·         First-time buyers only under the final phase (2021–2023).

·         Loan covered up to:

o   20% in England

o   40% in London

·         5% deposit required, with a 75% mortgage.

·         Interest-free for five years, then interest starts at 1.75% (rising annually).