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How first-time buyers can step on to the property ladder

From special tax-free savings accounts to shared ownership and innovative mortgage, there are options available to help you buy your first home. Here we take a look at five...

Words by: Property News Team

Advertisement feature in association with Post Office Mortgages

No-one pretends stepping on to the property ladder is not an expensive endeavour.

First-time buyers are paying a record £210,928 for their first home, and may require a deposit of more than £50,000, according to recent figures from the Office for National Statistics+. 

Faced with high house prices and rising living costs, amassing the necessary deposit can seem tough. But thankfully there are a variety of options that will help first-time buyerssave for a deposit,gain improved mortgage rates,require a smaller deposit, and evenproceed with no deposit.

Here we look at what’s on offer, the pros and cons of each, and how to work out what is right for you.

1. Help to Buy ISA

These accounts help you save for a deposit and you benefit from the Government topping up your savings by 25%. You can put away an initial sum of £1,200, and can then save £200 a month after that. The Government will pay a maximum bonus of £3,000 once £12,000 has been saved.


  • These savings plans are tax-free.

  • Available from a number of banks and building societies.

  • You can transfer your ISA from one provider to another to chase the best rates.

  • You get free cash to top up your savings.

  • Each first-time buyer is eligible, so a couple could get £6,000 bonus toward their first home.

  • This scheme isn’t limited to new-build homes.


  • You can only save in cash (not stocks and shares investments).

  • It will take more than four-and-a-half years to save enough to be eligible for the maximum bonus.

  • You can only use the money to buy a property worth up to £250,000 (or £450,000 in London).

  • You don’t receive the cash from the Government. It’s handed over to your lender as part of a deposit through your solicitor when you exchange contracts.

Is a Help to Buy ISA right for you?

A Help to Buy ISA is a decent option if you’re saving for a mortgage deposit, as for every £200 you save, the Government will pay you a £50 bonus. This scheme also makes sense if you need to buy quickly.

However, the allowance is not as generous as the one for the Lifetime ISA (see below), and there’s a lower limit on the value of house you can buy. Help to Buy ISAs will also eventually be replaced by Lifetime ISAs.

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2. Lifetime ISA 

The LISA provides the same 25% Government bonus as the Help to Buy ISA, but allows first timers to deposit a maximum of £4,000 a year into the account. This means a tax-free bonus of £1,000 for those who save the full £4,000. Buyers must be aged under 40 (but over 18) to qualify.


  • It’s a tax-free wrapper.

  • You can choose between cash savings and stock and shares.

  • You can deposit £4,000 a year, rather than face a monthly limit.

  • You get a free cash top-up.

  • You can transfer between providers.

  • You can use the money to purchase a property worth up to £450,000 anywhere in the UK.

  • If you and your partner are both first-time buyers purchasing a property together, you can both open one and save – effectively doubling the bonus.


  • While in theory, you can choose between cash and stocks and shares, the offer of traditional savings accounts for LISAs is limited. That said, there is more choice if you want a stocks and shares account.

  • While investments often produce a better return than cash over a longer time-frame, there is a risk of a crash just at the point when you need your money to buy your home.

  • You need to have held a LISA for 12 months or more to be able to use it to buy a home. If you need to buy within a year, a Help to Buy ISA is the better option.

Is a Lifetime ISA right for you?

If you are saving towards your dream home, a LISA is a good choice, as you can get a boost of up to £1,000 free cash a year. You can save more into a LISA each year (£4,000) than you can into a Help to Buy ISA (£3,400 in year one, then £2,400 a year). You can also use the LISA to purchase a higher-value home at up to £450,000 (compared to £250,000 with the Help to Buy ISA, or £450,000 in London).

3. Help to Buy: Equity Loan

With this scheme, if you raise a 5% deposit, the Government will lend you up to 20% of the value of a property you want (40% in London; 15% in Scotland) to buy as an equity loan. You then take out a mortgage on the remaining 75% of the property’s value. The scheme is set to run until 2021. 


  • You only need to raise a 5% deposit.

  • There is no interest to pay on the 20% loan for the first five years. This should significantly reduce the monthly costs in the early years.

  • You should get access to cheaper rates available to those with a 25% deposit.

  • Many lenders offer Help to Buy mortgages.


  • This scheme is only available on new-build properties.

  • Properties must also be worth less than £600,000.

  • After five years, you’ll have to start paying interest on the loan.

  • When you come to sell your home, the Government will take back its 20% share.

Is a Help to Buy Equity Loan right for you?

This scheme is a popular route into home ownership if you’ve only got a small deposit of 5%, but will only be suitable if you want to buy a new-build property. 

4. Shared Ownership

With this scheme, you can purchase a share of a new or existing home from a council or a housing association – typically between 25% and 75% of the property’s value. You then pay rent on the remainder. You have the option to buy a bigger share in the property at a later date.


  • As you are only buying a share of a property, a smaller deposit is required.

  • Should make buying a home much more affordable.


  • You only qualify for the scheme in England if your household earnings are less than £80,000 a year (or £90,000 in London).

  • You will still need to cover moving costs, such as stamp duty and solicitors’ fees.

  • You’ll need to find a lender willing to lend on a Shared Ownership property.

  • The cost of buying additional equity will depend on the property value at that time, so could rise.

Is Shared Ownership right for you?

If you earn £80,000 a year or less (or £90,000 or less in London), this scheme is worth a look, as it’s a great way to make small steps on to the housing ladder. Note, though, that where you live in the UK will determine how the scheme works for you. 

5. Post Office Family Link™ mortgage, provided by Bank of Ireland UK

If you are an aspiring homeowner who can afford to repay a mortgage – but are struggling to save enough for a deposit – take a look at Post Office Family Link™.

This product enables you to secure a mortgage without a deposit by enlisting the help of your family. 

With Family Link, you can take out a 90% LTV mortgage from the Post Office. The remaining 10% can then be raised as a mortgage secured against the home of a parent – or another close family member. 

For the first five years, you will make two separate repayments: one towards the assistor’s mortgage (which is interest free), and one towards your own mortgage, where interest rates will apply.

With this arrangement, you can use the equity in your parents’ home to help you get a deposit together. 

This means you don’t have to use your savings – and that your parents can help you without gifting a large lump sum that may drain their hard-earned savings. 

As a result, you may be able to get on to the property ladder faster.

  • The first-time buyer mortgage is 90% LTV.

  • Maximum loan size of £500,000.

  • Mortgage comes with cashback and no arrangement fees.

  • The 10% deposit loan is interest-free and payable over five years.

  • Assistor must be mortgage-free.

  • The only upfront cost is your solicitor and legal fees.

  • Independent legal advice is recommended for the first-time buyer and mandatory for the assistor.

For any first-time buyer looking to get #OnTheLadder with the help of their family, download the Bank of Mum & Dad Conversations Guide to discuss your options. 

Sources: +Post Office/Office of National Statistics.

*This post is in collaboration with Post Office. Subject to status and lending criteria. Your Home may be repossessed if you do not keep up repayments on your mortgage. Post Office Family Link mortgage information accurate at date of publication, June 2019*


We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zoopla Property Group accepts no responsibility or liability for any decisions you make based on the information provided.