The Help to Buy Equity Loan scheme, previously offered by the UK Government, is no longer available. The scheme officially ended in March 2023, meaning no new applications can be made.

However, fear not, there are several schemes to help aid you on your home buying journey.

What Was Help to Buy?

Help to Buy provided first-time buyers and existing homeowners with an interest-free government loan for the first five years, helping them purchase a new-build property with just a 5% deposit.

However, with the scheme no longer in place, prospective homebuyers may be wondering what other options are available to help them get onto the property ladder.

An Alternative – The Lifetime ISA (LISA)

If you’re looking to get onto the property ladder, a Lifetime ISA (LISA) could be a valuable tool to help grow your savings. Designed for first-time buyers and retirement savers, this government-backed scheme offers a generous 25% bonus on your contributions, making it an excellent way to accelerate your savings.

How Does a Lifetime ISA Work?

• You can save or invest up to £4,000 per tax year, and the government will add a 25% bonus, meaning you could receive up to £1,000 per year in free money.
• As with all ISAs, your savings grow tax-free as long as you stay within the annual £20,000 ISA allowance.
• You must open a LISA before your 40th birthday, but you can continue saving into it until you turn 50.
• The funds can be used to buy your first home (up to £450,000) or saved for retirement.

Cash LISA vs. Investment LISA

There are two types of LISAs to choose from:

• Cash LISA – Works like a regular savings account, growing with interest. This is a low-risk option, ideal for those who want stability.
• Investment LISA – Your money is invested in the stock market, with the potential for higher returns, but also some level of risk.

Many providers offer LISA products, so it’s always worth shopping around for the best interest rates or investment options to suit your goals.

How Much Could You Save?

If you start saving at 18 and continue until 50, you could contribute a maximum of £128,000, with a government bonus of up to £32,000—giving you a total pot of £160,000 towards your first home or retirement.

Important Considerations

• You can only use your LISA savings for a first home purchase or after age 60 for retirement.
• If you withdraw your money for any other reason, a 25% penalty applies, meaning you could lose some of your savings.
• You can access your LISA funds early if you are diagnosed with a terminal illness and have less than 12 months to live.

Ready to Start Saving?

While the Help to Buy scheme has ended, the Lifetime ISA remains a fantastic alternative for first-time buyers. If you’re thinking about purchasing your first home, our team at Curchods can guide you through the buying process and help you find the perfect property.

Get in touch today to start your home-buying journey with expert advice from our team.