First-time buyer schemes available in 2024

The market has cooled, which may offer first-time buyers the perfect opportunity

There are several first-time buyer schemes offered by the government to help people get on the property ladder.

And several more offered by developers of new-build homes to help you on your way.

Discover the buying schemes available for new-build homes

But if you're a first-time buyer, it can be difficult to know which one is right for you.

We take a look at the main buying schemes available in 2024 and how they could help you overcome different challenges when you're trying to buy a house.

1. The mortgage guarantee scheme

The problem: “I can’t save a big deposit while paying rent”

The average first-time buyer is now looking at properties costing an average of £244,100.

That’s £2,800 higher than a year ago, according to our research. If you were to put down a 20% deposit, you would need to save an eye-watering £48,820.

That's not easy at the best of times. But with food, energy bills and rental rates rising, a deposit is out of reach for many aspiring first-time buyers.

Enter: the mortgage guarantee scheme.

How does the mortgage guarantee scheme work?

The mortgage guarantee scheme can help you buy a home with a smaller deposit.

The scheme has encouraged more banks and building societies to offer 95% mortgages.

It means you can save just a 5% deposit and then take out a mortgage on the remaining 95% of the property value.

The scheme is backed by a government guarantee. So if you were to fall behind on mortgage payments and your home is repossessed, the government would cover a portion of the lender’s losses.

Are you eligible?

The mortgage guarantee scheme is open to both first-time buyers and home-movers across the UK.

The property you're buying cannot cost more than £600,000 and it must be your only home.

You must also take out a repayment mortgage, not an interest-only one.

Pros

• The mortgage guarantee scheme means you can get on the property ladder with a smaller deposit.

• For a typical £244,100 first-time buyer property, you would only need to save £12,205.

• The mortgage guarantee scheme was extended in Jeremy Hunt's Autumn Statement 2023. It will now run until the end of June, 2025.

Cons

• While many big mortgage lenders are part of the scheme, they're not all part of it. 

• You might be charged a higher interest rate with a 95% mortgage than, say, a 90% mortgage. Typically, the higher the loan-to-value ratio (LTV), the higher the interest rate tends to be.

• There is a higher risk of falling into negative equity. This is when the value of your home is worth less than the mortgage secured against it.

Find out more about the mortgage guarantee scheme

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