How could the government help first time buyers more?
How could the government help first time buyers more?
Many first time buyers may be eligible for one of the government schemes to help them onto the property ladder. But the results of our most recent Buyer Intention Survey suggest that the majority think the government could be doing more.
Jade Turnstill, Head of Brand and Content at Share to Buy, comments: “We recently surveyed users of Share to Buy, and a decisive 69% of them said they felt the Government is not doing enough for first time buyers. Equally 83% cited rising rents as the reason they needed to get on the housing ladder. This creates the perfect storm, where those looking to get on the ladder are trapped between rising rents and a shortage of schemes to help them find a secure home.”
So, how could the government do more to support people in their journey to homeownership? Let’s start by looking into the current support on offer before delving into additional aid that could address some of the issues faced by first time buyers.
What is the government currently doing to help first time buyers?
Homeownership schemes
While there aren’t any government grants for first time buyers, there are numerous homeownership schemes available, including Shared Ownership, Rent to Buy and Deposit Unlock, to name a few. However, each scheme has different eligibility criteria and availability can vary between locations.
Lifetime ISA
A Lifetime ISA (LISA) is a savings account that can be used to buy your first home or to build savings for later in life. You can save up to £4000 per year and the government will add a bonus of 25% to your savings, up to £1,000 annually. LISA savings can be used to purchase a home costing £450,000 or less, which can be difficult to find on the open market in London and the South East.
Building affordable homes
In the Spring Statement 2025, Chancellor Rachel Reeves pledged an additional £2 billion to boost the Affordable Homes Programme. The funding package will be used to build up to 18,000 new homes for social housing and affordable homeownership schemes.
Five things the government could do to provide more support
1. Stamp Duty reform for first time buyers
On 1st April 2025, Stamp Duty Land Tax (SDLT) relief for first time buyers came to an end and the thresholds reverted to previous levels. At present, first time buyers pay 0% tax on the value of their property purchase up to £300,000 but pay 5% tax from the value of £300,001 up to a maximum of £500,000. This threshold could be deemed unfair in places like London, where the average first home costs £511,500, putting first time buyers in the capital at a disadvantage, as it’s highly likely they would have to pay more SDLT than their peers in other parts of the country where average property prices are lower.
The government could make it fairer for first time buyers in high-cost areas by raising the threshold in these areas or re-introducing relief measures across the board.
2. Expand the First Homes scheme
Introduced in 2021, the First Homes scheme helps local residents and key workers buy a new-build home in their area at a reduced price. The discount is at least 30% to 50% of the full market value, so eligible buyers can make a significant saving.
The government has pledged to add up to 10,000 properties to the scheme each year, but increasing this number would make the scheme more readily available to eligible first time buyers.
3. Enhance Lifetime ISAs (LISAs)
As mentioned above, LISA savings can be used to purchase a first home costing £450,000 or less. Raising this price cap in line with regional average house prices would make it fairer for aspiring home-buyers in high-cost locations. Additionally, increased flexibility around age and withdrawal restrictions would allow older buyers or those who’ve been priced out of the market to still use their LISA savings without having to wait until they’re 60.
4. Simplify Shared Ownership leaseholds
This spring, the government confirmed major changes to leasehold, with plans to replace it with commonhold as the default tenure for apartments. Shared Ownership homes are usually leasehold properties but differ slightly from standard leaseholds.
The provisions of the Leasehold and Freehold Reform Act 2024 will make it easier for shared owners to extend their leases and abolish the two-year ownership requirement to do so. However, shared owners would only be able to buy the freehold of their property if they’ve staircased to 100%. Many of the Act’s provisions are yet to commence because further consultation and secondary legislation are needed.
Further simplification of Shared Ownership leasehold terms could make the scheme more attractive to first time buyers who may be sceptical or find the current conditions too complex. Promoting the benefits and making it less costly to staircase could also improve prospective buyers’ perceptions of the scheme.
5. Incentivise development of affordable starter homes
In March, the government pledged £20 million for community-led social and affordable housing; homes built by locals for locals. It’s part of the broader Plan for Change, which aims to deliver 1.5 million homes during this parliament, representing the biggest boost to affordable housing in a generation.
The National Planning Policy Framework (NPPF) requires that at least 10% of homes in major residential developments be affordable housing, but the actual percentage can vary depending on local policy, housing needs and viability.
Jade comments: “Shared Ownership remains a good option to help buyers onto the ladder. However, there are increasing challenges ahead for registered providers in the delivery of these homes.”
Affordable housing providers cite funding, increasing costs and planning systems as barriers to delivery. Offering more financial incentives, such as grants or tax breaks, and reducing red tape could make building affordable housing more attractive to providers. Raising the minimum requirement percentage of affordable homes within developments to increase supply could help meet demand.
What next?
First time buyers can make their voices heard by writing to their local MP, lobbying for policies that address supply issues and advocating for more government support that could help them onto the property ladder.
For those who are already shared owners, more support is coming in the form of the finalised Shared Ownership Code, which is set to launch this summer. The Code aims to provide greater transparency, fairness and help for shared owners throughout the process, from marketing to purchasing and management of homes.
When Labour came into power, the Chancellor committed to holding one major fiscal review per year. The next one will be this year’s Autumn Budget, which will be announced on Wednesday 29th October, 2025. In this budget, we hope to see more support for first time buyers, particularly in relation to government homeownership schemes.
At Share to Buy, we make your choice easier with a selection of new-build homes across England, available through alternative homeownership schemes such as London Living Rent, Rent to Buy and Shared Ownership. Get your home-buying journey underway using our property portal.
