What benefits do you get as a first-time buyer?

First-time buyers in the UK can access several meaningful financial benefits, including a 25% government bonus on deposit savings through a Lifetime ISA, reduced Stamp Duty rates, family-assisted mortgage schemes, low-deposit mortgage options, and discounted new build properties through the First Homes scheme.

In this guide, we'll run through each of these benefits in detail, covering how they work, who's eligible, and how they could help make buying a first home more affordable and achievable.

For more guides and expert advice on your first house purchase, head to our First-Time Buyer Hub.

Lifetime ISA

Saving for a house deposit is one of the biggest challenges for first-time buyers. With rising rents and the cost of living pushing budgets to the limit, building up a deposit can take several years or even more than a decade.

According to our Q1 First-Time Buyer Index in 2026, the average deposit now stands at £42,324 - equivalent to more than a full year's take-home pay, and would take 10.7 years to save based on putting away 10% of monthly income.

A Lifetime ISA (LISA) could help to speed up the process. This is a special ISA savings account that lets you save up to £4,000 each tax year towards your first home or retirement, and you’ll get a free 25% bonus from the government on top of whatever you save - meaning you’ll boost your deposit by up to £1,000 each tax year that you max out your account.

If you contribute the maximum amount to a LISA for five years in a row, you'll turn a £20,000 deposit into a £25,000 deposit and even more if you choose an account with a competitive interest rate. Plus, if you're planning to buy with another first-time buyer, you can have a LISA each, bringing your combined deposit (before interest) up to £50,000 in 5 years, assuming you're both able to max out your accounts.

Yet from our own research, we found that only 17% of first-time buyers are currently using a Lifetime ISA, meaning the majority are leaving an estimated £3,000–£5,000 in government bonuses on the table. Those who do use a Lifetime ISA buy their first home an average of 2.8 years earlier than those who don't (average age 29.2 vs 32).

With the Tembo Cash Lifetime ISA, you’ll benefit from a competitive interest rate. Over five years, that could mean earning hundreds more in interest compared to the next best rate on the market.

Stamp Duty relief for first-time buyers

One benefit of being a first-time buyer is paying less Stamp Duty than non-first-time buyers. Stamp Duty is the tax you pay to the government when you purchase a property in England - there are similar taxes in Scotland and Wales.

In April 2025, the tax-free threshold for first-time buyers fell to £300,000. Here is how the rates compare:

As the table shows, first-time buyers pay no Stamp Duty at all on properties up to £300,000, saving up to £2,500 compared with a home mover buying the same property.

You can find out more about the recent changes to Stamp Duty here.

Looking for ways to cut costs? Take a look at our guide on how to reduce your Stamp Duty liability.

Guarantor mortgages

First-time buyers don't have to go it alone. There's a growing number of family-assisted options designed to help you buy sooner and they don't require your parents to have significant wealth or savings. From budget-boosting schemes to guarantor mortgages, there are loads of ways parents can help their children make home happen.

Here are some of the top ways they could help first-time buyers:

1. Income Boost

Your parents don’t have to use their property or savings to help you get on the ladder. They could use their income instead! An Income Boost involves adding a family member’s income (or a portion of it) to your mortgage application to boost what you can borrow for a mortgage. This could give you access to a bigger mortgage and help you buy a home sooner, as your borrowing potential will be based on your combined income, rather than your salary alone.

Your helpers will be named on your mortgage, meaning they’ll need to step in and help with the mortgage repayments if you’re ever unable to afford them yourself. However, they won't be named on the property deeds, so you'll retain full ownership and decision-making rights over your home.

2. Deposit Boost

If your parents own their home and they want to help you buy your own place, a Deposit Boost lets them release money from their own property and put it towards your deposit. If you’re struggling to save money yourself, your parents’ contribution could make up your full deposit, but we often work with people who combine their own savings and their parents’ gift. Their gift is the top-up they need to access lower interest rates and make their monthly repayments more affordable. According to our Q1 2026 First-Time Buyer Index, buyers who accessed specialist affordability schemes - including guarantor and family-assisted mortgages, increased their maximum borrowing potential by an average of £88,399, lifting budgets from £271,484 to £390,817.

You can also use a Deposit Boost and an Income Boost together to boost your deposit size and your borrowing capacity.

3. Savings as Security

With a Savings as Security mortgage, a family member can deposit 10% of the property’s value into a savings account with your lender. This money will act as security for your mortgage for a set period, usually around 5 years. If you keep up with all your mortgage payments during this period, your helper will get their savings back (plus interest) at the end of the agreed term.

Perfect for you: How can a parent help with a mortgage?

Low-deposit mortgages

There are several ways to buy with a small deposit; in fact, we've created a whole guide on the topic, which you can find here. Before diving into specific schemes, it's worth understanding how much you can afford to borrow, as this will help you work out which option is the best fit. Factors like your income, monthly outgoings, credit history, and deposit size all play a role.

At a quick glance, here are some of the schemes available:

• Deposit Unlock: Buy a new build with a 5% deposit.
• Mortgage Guarantee Scheme: Buy any home (not just new builds) with a 5% deposit.
• 95% LTV Mortgages: Standard mortgages requiring only 5% upfront. Some buyers may also be able to buy a house with a small deposit without one of these schemes.
• Track Record Mortgage: Buy a home with no deposit by proving a history of on-time rent payments.

First Homes scheme

Imagine purchasing a £300,000 property for just £210,000. You could, with the help of the First Homes scheme, which gives first-time buyers a 30% discount on a new build home. The lower purchase price means you’ll need a much smaller deposit and mortgage than you usually would. Your monthly repayments will be more manageable too, leaving you with more cash in the bank for bills, furniture, and home improvements.

However, there are a few drawbacks to be aware of with the First Homes scheme:

• There aren't many homes currently available through the scheme, so options can be limited.
• Eligibility criteria are strict, you'll need to meet requirements around income, location, and first-time buyer status.
• When you sell the property, you must pass on the same percentage discount you received to the next buyer.
• This can limit your profit on the sale and make it more challenging to move up the property ladder.

So while it helps some people get on the housing ladder, it's not the right fit for everyone.