Help to Buy & Shared Ownership 2026/27

Help to Buy ISA

The Help to Buy ISA was introduced in December 2015 and accounts can no longer be opened (the deadline was 30 November 2019). If you already have a Help to Buy ISA, you can continue to save into it until 30 November 2029, and you can claim the government bonus until 30 November 2030. The Help to Buy ISA works as follows: you can save up to £200 per month (plus an initial deposit of up to £1,200 in the first month), and the government adds a 25% bonus when you use the savings to buy your first home. The maximum government bonus is £3,000, achieved by saving £12,000. The bonus is paid on completion of the property purchase and is added directly to your conveyancing solicitor's account. To qualify, you must be a first-time buyer, the property must be in the UK, and the purchase price must be £250,000 or less (£450,000 in London). You cannot use the Help to Buy ISA and a Lifetime ISA for the same property purchase. The Help to Buy ISA can be held alongside a regular Cash ISA (the Help to Buy ISA counts towards your £20,000 annual ISA allowance). Interest earned on the Help to Buy ISA is tax-free. The scheme has been less popular since the introduction of the Lifetime ISA, which offers higher contribution limits and more flexibility, but it remains a useful option for those who already have an account open.

Lifetime ISA (LISA)

The Lifetime ISA (LISA) is available to UK residents aged 18 to 39 (you must open the account before your 40th birthday). You can contribute up to £4,000 per tax year, and the government adds a 25% bonus (£1,000) on your contributions. The LISA can be used to buy your first home (up to a maximum purchase price of £450,000 anywhere in the UK) or to save for retirement (withdrawals from age 60 tax-free). The LISA is more flexible than the Help to Buy ISA in several ways: you can contribute up to £4,000 per year (vs £2,400 in a Help to Buy ISA), the property price limit of £450,000 is a single UK-wide limit, and you can use the LISA for retirement if you do not end up buying a home. However, there is a penalty for withdrawing money for any purpose other than buying a first home or retirement: 25% of the amount withdrawn (which effectively recovers the government bonus plus a small additional penalty). Since April 2021, the withdrawal penalty has been reduced to 20% for terminal illness circumstances. The LISA counts towards your overall ISA allowance (£20,000 for 2026/27), so you could contribute £4,000 to a LISA and £16,000 to another ISA in the same tax year. Both Cash LISAs and Stocks and Shares LISAs are available. The LISA is generally considered superior to the Help to Buy ISA for most first-time buyers, given the higher contribution limit and the flexibility to use the funds for retirement.

Equity Loan Scheme

The Help to Buy Equity Loan scheme ended for new applications on 31 March 2023 in England, though some regional schemes may still be available. Under the equity loan scheme, the government lent you up to 20% (40% in London) of the purchase price of a new-build home, interest-free for the first 5 years. After 5 years, interest was charged at 1.75% (increasing annually by RPI plus 1%). The equity loan was repaid when you sold the property or at the end of the loan term (25 years). The scheme was replaced from April 2021 by a more targeted equity loan for first-time buyers, and from 2023 no new applications were accepted. If you already have an equity loan, the rules remain in place for the duration of the loan term. The equity loan is a second charge on the property, meaning the government shares in any increase (or decrease) in the property's value when you sell. Repaying the equity loan early is possible and may be done in stages (known as staircasing), but you must have the property valued to determine the current market value. The equity loan is a useful form of assistance for those who have it, but the interest charges after year 5 can be significant, and the shared appreciation element means the government benefits from house price growth. If you are selling a property with an outstanding equity loan, your solicitor will manage the repayment process as part of the sale.

Shared Ownership

Shared ownership is a scheme where you buy a share of a property (typically 25% to 75%) and pay rent on the remaining share to a housing association. You can increase your share over time through a process called staircasing, eventually owning 100% of the property. Shared ownership properties are available through housing associations and are aimed at people who cannot afford to buy a home on the open market. Eligibility criteria include: household income of £80,000 or less (£90,000 in London), you must be a first-time buyer or a previous homeowner who cannot afford to buy now, and you must not own another property. The minimum initial share is 10% for new shared ownership properties since 2021. Rent on the unsold share is capped at 3% of the value of that share (though this may vary by housing association). You may be able to staircase in small increments (as little as 1%) under newer model leases. The housing association is responsible for repairs and maintenance in proportion to the share you do not own, though the lease terms vary. Shared ownership is less risky than buying on the open market because your mortgage is smaller and the rent on the remaining share is subsidised. However, you are still responsible for service charges and ground rent, and selling a shared ownership property can be more complex than selling a freehold property. The housing association typically has the right to buy back the property (a nomination period) before it can be sold on the open market.

SDLT on Shared Ownership

Shared ownership purchases have a special SDLT treatment. You can choose to pay SDLT on the market value of the full property at the time of purchase (paying the SDLT upfront based on the full value) or pay SDLT only on the share you are buying (with further SDLT payable when you staircase to a higher share). The market value election allows you to pay SDLT on the full market value upfront, which means no further SDLT is due when you staircase (provided the first transaction was also at market value). This is beneficial if the full property value is below the SDLT threshold (£250,000) or if you expect the property value to rise significantly. If you do not make the election, you pay SDLT only on the share you purchase, with further SDLT payable on each staircasing transaction (based on the value of the additional share at that time). For first-time buyers purchasing a shared ownership property, first-time buyer relief applies if you make the market value election, potentially reducing your SDLT to nil on properties up to £425,000. The decision on whether to make the market value election depends on your specific circumstances, including the property value, your expected staircasing plans, and your cash flow. Your solicitor can advise on the best approach. The 5% additional SDLT surcharge does not apply to shared ownership purchases by first-time buyers (as long as you are not buying an additional property).

Eligibility and Application

Eligibility for Help to Buy schemes varies. For the Help to Buy ISA and Lifetime ISA, you must be a first-time buyer (never owned a property anywhere in the world), aged 16+ for HTB ISA (18+ for LISA), and a UK resident. For shared ownership, eligibility is set by the housing association and typically includes: household income below £80,000 (£90,000 in London), you cannot afford to buy a suitable home on the open market, and you are a first-time buyer or a previous homeowner who cannot afford to buy now. Some housing associations also give priority to existing social housing tenants, key workers, or people in specific local authority areas. For the Help to Buy Equity Loan (where it existed), eligibility required a 5% deposit, the property was a new-build, and the property was in England. London Help to Buy applicants needed a 5% deposit and could borrow up to 40% of the purchase price. Applications for Lifetime ISAs are made through approved ISA providers (banks, building societies, and investment platforms). Shared ownership properties are found through individual housing associations or shared ownership property portals. The HomeOwners Alliance, Share to Buy, and the gov.uk website are good starting points for finding schemes in your area.

FAQs

Can I use both a Help to Buy ISA and a Lifetime ISA to buy a home?

You cannot use both to buy the same property. However, you can have both accounts open — you could use the LISA for the property purchase and withdraw the HTB ISA (without the bonus) as cash, or vice versa.

What is the maximum property price for a Lifetime ISA?

The maximum purchase price is £450,000 anywhere in the UK. This is a single UK-wide limit, unlike the Help to Buy ISA which has a £250,000 limit (£450,000 in London).

Can I rent out a shared ownership property?

Most shared ownership leases prohibit subletting the entire property. You may be able to take in a lodger with the housing association's permission, but the rules vary by scheme and lease terms.

What happens to my Help to Buy equity loan when I sell?

The equity loan is repaid from the sale proceeds based on the current market value. If the property has increased in value, you repay a proportion of the increase. If it has decreased, you repay less. The loan is a second charge on the property.