Read on to learn all about the first-time buyer benefits which can help you make homeownership a reality.
You Are Eligible for Government Housing Schemes
One of the biggest benefits of being a first-time buyer is access to a variety of first-time buyer schemes aimed at helping you purchase your first home sooner and more affordably.
Shared Ownership
Shared Ownership is another popular first-time home buyers scheme, especially in expensive areas like London where buying a property is out of reach for many. Shared Ownership is where you purchase a share (usually between 25% and 75%) of a property and pay subsidised rent on the remaining share.
You’ll need to take out a mortgage to pay for the share of the home’s purchase price. Over time, you can “staircase” — which means buying more shares and therefore owning more of the home.
To be eligible for Shared Ownership you need to:
- Be aged 18 or older.
- Your annual household income if buying in London must be less than £90,000 (£80,000 outside of London).
- You will normally be a first-time buyer or be in the process of selling your home. You must not own any other property at the time you buy your new home.
- You should not be able to afford to buy a home on the open market.
- You must be able to show you are not in rent or mortgage arrears and demonstrate a good credit history.
The key benefits of Shared Ownership include:
- Lower initial deposit (you only need a deposit for the mortgage of the share you are buying)
- More affordable monthly payments
- Opportunity to increase ownership gradually through Staircasing
At Peabody New Homes we offer a wide range of Shared Ownership homes across London and the Southeast, from studio flats to 3‑bedroom houses, providing access to high‑quality housing at an affordable price.
London Living Rent
London Living Rent is a government-backed scheme where Londoners can rent a home at a discounted rate compared to renting privately, with the saving made each month going towards a deposit for a Share Ownership home.
London Living Rent can help first-time buyers get onto the property ladder and purchase their own homes. It’s designed to allow you to save at your own pace over a period of years, as properties under London Living Rent guarantee tenants a minimum three-year tenancy, and a maximum of ten.
London Living Rent is coming soon to North Gate Park, a modern collection of 1-, 2- & 3-bedroom Shared Ownership homes in Haringey.
First Homes Scheme
The First Homes Scheme is a government initiative that allows first-time buyers in the UK to purchase a new-build property at a discount of at least 30% compared to market value. This discount is passed on to future buyers as well, ensuring long-term affordability for local communities. Local authorities will often prioritise buyers with a connection to where the property is located.
The eligibility criteria is:
- You must be a first-time buyer (not own a home and not have owned a home in the past)
- You must have a combined household income under £80,000 (or £90,000 in London)
- The home must be your main residence
- You need to be able to secure a mortgage for at least 50% of the discounted purchase price.
This scheme is good for local key workers, young families, and others looking to settle in their community. At Peabody New Homes we are focused on providing affordable Shared Ownership homes, so we are not part of the First Homes Scheme.
Rent to Buy
The Rent to Buy scheme allows first-time buyers to rent a home at a reduced rate (typically 20% below market rent) while they save for a deposit. After a set period, usually five years, tenants have the option to purchase the property outright or through Shared Ownership. The scheme is available in all of England except London.
It’s a practical stepping stone for those not yet mortgage-ready but eager to own their home in the near future.
The basic eligibility criteria for Rent to Buy is:
- Your household income is not more than £90,000 a year
- You don’t own a property already
- You live or work in the area in which you are hoping to buy
- I can afford the monthly Shared Ownership costs at the moment, but don’t currently have a large enough deposit to buy through Shared Ownership or outright
- You are able to show that you can obtain a mortgage based on your current credit report
Peabody New Homes does not currently offer Rent to Buy.
The cost of buying a home can be lower for first-time buyers
When compared to second or third-time buyers, first-time buyers often benefit from reduced overall costs. You’re not involved in a chain, which gives you an advantage in competitive markets and could even lower the price.
Additionally, first-time buyer benefits include:
- No stamp duty on properties up to £300,000 in England
- 5% Stamp Duty on the portion from £300,001 to £500,000
- Reduced stress during negotiations (sellers prefer chain-free buyers)
- Better mortgage offers from lenders eager to attract new homeowners
With less financial baggage and fewer contractual complications, first-time home buyers are often in a stronger position than they realise.
The process is usually faster
As a first-time buyer, you’re not selling an existing property. This means:
- No risk of chain delays
- Less paperwork
- Quicker transactions
Sellers and estate agents often prioritise first-time buyers because your position is simpler and less risky. In a hot housing market, this can be the edge you need to secure your dream home.
You can increase your savings with a Lifetime ISA
The Lifetime ISA (LISA) is one of the most powerful tools available to first-time home buyers in the UK. It’s a savings account designed specifically for those looking to buy their first home or save for retirement.
Here’s how it works:
- Save up to £4,000 per year
- Receive a 25% government bonus (up to £1,000 annually)
- Use funds to purchase your first home worth up to £450,000
By combining a LISA with a first-time buyer scheme, you can significantly reduce the time it takes to save for a deposit and increase your overall purchasing power. You can read our blog on the best ISAs for first-time buyers for more information.
Frequently asked questions about the benefits of being a first-time buyer
The average deposit for first-time buyers in the UK is £68,154, but it varies depending on location. In London the average is £151,731, but could be between £30,000–£50,000 for a modest flat. Government backed initiatives like Shared Ownership and the First Homes scheme can help reduce the upfront deposit needed.
If you’re a first-time buyer, you pay:
- 0% stamp duty on properties up to £300,000
- 5% on the portion between £300,001 and £500,000
For properties over £500,000, standard rates apply and you are not eligible for first-time buyer relief.
A first-time buyer is someone who has never owned a residential property in the UK or abroad. If you’ve inherited property, jointly owned a home, or purchased through an investment company, you may not qualify.
You must also intend to live in the property as your main residence — buy-to-let purchases are excluded.
