Help to Buy Scheme vs First Homes Scheme: Which Is Better in 2026?

Buying a first home in the United Kingdom often depends on help from government backed schemes, especially when deposits and house prices feel out of reach. By 2026, many buyers will be comparing the legacy of Help to Buy with the newer First Homes scheme and considering how each might shape their finances, mortgage choices, and long term security as owners.

Understanding the Help to Buy scheme in 2026

Help to Buy has existed in several forms across the UK, most famously as an equity loan on new build properties. In England this equity loan scheme closed to new applications in 2022, while related schemes in Wales and Scotland have followed their own timetables and rules. In broad terms, Help to Buy equity loans have allowed eligible first time buyers to purchase a new build with a relatively small deposit, while the government lent a percentage of the property price as an equity stake.

Under the classic model, a buyer might put down a 5 percent cash deposit, take a standard repayment mortgage for 75 percent, and receive a government equity loan for the remaining 20 percent. For several years that loan has usually been interest free, after which fees begin. Because the state owns a share of the property value rather than a fixed lump sum, the amount to be repaid can rise or fall with house prices. In 2026, anyone already using Help to Buy will still be managing these ongoing obligations even though new entrants in some regions may no longer be able to join the scheme.

What does the First Homes scheme offer?

First Homes is a newer discount market sale scheme aimed at first time buyers in England, with a particular focus on local residents and key workers. Instead of lending money as an equity stake, First Homes reduces the upfront price of a qualifying new build home by at least 30 percent compared with a local market valuation. Some local authorities can require even larger discounts, for example 40 percent or 50 percent, depending on local policy.

The discounted price forms the basis for the buyer’s mortgage and deposit. Importantly, the discount stays with the property for future sales. When the owner sells, they must pass on the same percentage discount to the next eligible buyer, based on a fresh market valuation at that time. This structure aims to preserve a stock of relatively affordable homes in an area over the long term, rather than giving a one off benefit that disappears when the original buyer sells.

Affordability and eligibility: who can apply?

Both Help to Buy style equity loans and the First Homes scheme are targeted at people who might otherwise struggle to buy, but the way they test affordability is different. Help to Buy equity loans have typically focused on new build buyers with smaller deposits, limiting purchase prices and sometimes restricting eligibility to first time buyers only. Lenders still apply their own affordability checks, as the main mortgage must be sustainable based on the buyer’s income and outgoings.

First Homes also sets price caps and income limits, and it is strictly for first time buyers. Local authorities can give priority to people with a strong local connection or who work in essential public service roles. Because the purchase price is reduced at the outset, a buyer may need a smaller mortgage than with a comparable open market new build, even though they still need to meet standard lending criteria. In both schemes, buyers remain responsible for ongoing costs such as service charges, ground rent where applicable, and building maintenance.

The homeowner experience: benefits and drawbacks

Owning with a Help to Buy equity loan can feel quite similar to a standard purchase in the early years, especially while the equity loan is interest free. However, the presence of an additional stakeholder complicates remortgaging, selling, or making major changes to the property. When house prices rise, the value of the government’s share increases, so repaying or staircasing out of the equity loan can become more expensive over time. On the other hand, if prices fall, the risk is shared because the amount due on the equity share falls as well.

First Homes owners do not have a government equity partner, but they do live with a permanent restriction on resale. They usually have to sell to another eligible First Homes buyer, at a price that preserves the same percentage discount. This can narrow the pool of potential purchasers and may slow down a future sale in some markets. At the same time, knowing that the discount is locked into the property can create a degree of stability for local affordability, which some buyers value as a social benefit.

Cost comparison of Help to Buy and First Homes in 2026

Although individual circumstances vary, it is possible to compare the broad financial structure of Help to Buy style equity loans and the First Homes scheme. The table below uses typical patterns seen in England and Wales for illustration, rather than guaranteed figures for every region in 2026.

Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.

In practice, Help to Buy can reduce initial monthly mortgage payments by shrinking the size of the traditional mortgage, but buyers must budget for equity loan fees after the interest free period and for the eventual repayment of the government share. First Homes lowers the purchase price permanently, which can make the mortgage smaller without adding a separate loan, but the trade off is a reduced ability to capture full market gains if prices rise strongly.

Which scheme is right for you in 2026?

Choosing between Help to Buy style support and the First Homes scheme in 2026 depends on where you live in the UK, what schemes remain open in your area, and how you feel about sharing future gains in property value. If you prioritise flexibility and the possibility of later moving fully into the open market, an equity loan that you can repay and exit may feel more attractive, provided you are comfortable managing the long term costs and fees.

If your main goal is to secure a stable, affordable home in a community you plan to stay in, then a permanent discount under the First Homes scheme may better align with your priorities. It can reduce the size of the mortgage from day one and help maintain affordability for future local buyers, but you accept limits on who you can sell to and how much you may gain from price increases. In all cases, understanding the fine print of eligibility, price caps, local rules, and long term obligations is essential before committing to either route.

The comparisons between these schemes highlight that there is no single option that suits every buyer. Each approach involves a balance between immediate affordability, long term financial planning, and personal preferences about flexibility and community impact. By looking closely at the structure of support, potential future costs, and how you expect your circumstances to change, you can weigh which type of assistance fits more comfortably with your plans for home ownership in 2026 and beyond.