Help to Buy Is Closed — Here's What's Replaced It (And How Shared Ownership Actually Works)

The Help to Buy equity loan scheme closed to new applicants in March 2023. If someone is still quoting it to you as a route onto the housing ladder, their information is out of date. This guide explains what replaced it, and then covers Shared Ownership in detail — including the staircasing process, the costs most buyers don't anticipate, and when it genuinely makes financial sense.

What Help to Buy Was (and Why It Closed)

The Help to Buy equity loan scheme allowed first-time buyers in England to purchase a new-build home with a 5% deposit, a 75% mortgage, and a 20% government equity loan (40% in London). The loan was interest-free for the first five years, after which fees of 1.75% per year applied, rising annually with RPI plus 1%.

It closed in March 2023 primarily because:

It was found to have inflated new-build house prices, with builders pricing in the subsidy
The scheme had cost the government over £22 billion since 2013
Post-pandemic interest rate rises made the fee-charging years increasingly expensive for borrowers

If you took out a Help to Buy loan, you still need to repay it — either on sale, at the end of your mortgage term, or by staircasing it out earlier. The repayment is based on the property's market value at the time, not what you borrowed. See our guide on Help to Buy equity loan repayment for the full Target HCA process and costs.

What's Replaced Help to Buy

First Homes Scheme

First Homes offers eligible first-time buyers a discount of at least 30% (sometimes 40–50%) on the market value of a new-build home. The discount is permanent — it transfers to future buyers, keeping the homes affordable in perpetuity. Eligibility criteria vary by local authority but typically include:

Income cap of £80,000 (£90,000 in London)
Local connection or key worker status (nurses, teachers, police, fire service, armed forces) in most areas
Mortgage must cover at least 50% of the discounted purchase price

The discount is offered by housebuilders as a planning obligation, so availability is patchy — not all developments participate, and the government has set targets rather than guarantees.

Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme allows buyers with a 5% deposit to access 95% LTV mortgages on properties up to £600,000 — including resale homes, not just new builds. The government guarantees a portion of the mortgage above 80% LTV, encouraging lenders to offer high-LTV products. Available through mainstream lenders including Halifax, Lloyds, NatWest, and Santander. Check current availability with lenders directly, as the scheme has been extended and modified several times.

Deposit Unlock

Deposit Unlock is a housebuilder-funded scheme allowing buyers to purchase new-build homes with a 5% deposit. It operates through the Home Builders Federation and specific lenders (typically Nationwide and Newcastle Building Society). The participating housebuilder pays an insurance premium to the lender, enabling the 95% LTV loan. Not all developments participate; check with individual builders.

Shared Ownership: How It Actually Works

Shared Ownership allows you to purchase a share of a home — typically between 10% and 75% — from a housing association, paying subsidised rent on the remaining share. It sounds simple. The reality is more complex.

The Staircasing Process

Staircasing means buying additional shares in your property over time, until you own it outright. Under the revised model introduced in 2021 (applying to new Shared Ownership homes built on or after 1 April 2021), you can staircase in increments as small as 1% per year. Older leases typically required minimum 10% increments.

How 1% staircasing works:

The housing association commissions a desktop valuation (typically £300–£400) to set the current share price
You purchase the additional 1% share at current market value
Your rent reduces proportionally
You can staircase annually without needing your full legal conveyancing process each time — simplified for small increments

For larger purchases (typically 5%+ of the total), you will need a full RICS valuation (£300–£600) and solicitor involvement (£1,500–£3,000 in legal fees per transaction). For a detailed walkthrough of the staircasing process, costs, and SDLT treatment, see our shared ownership staircasing guide.

Lease Length and Mortgage Requirements

Most lenders require a minimum of 85 years remaining on the lease at the point of application, with some requiring 90 years. Shared Ownership leases are typically granted at 99 or 125 years — but older Shared Ownership properties may now be approaching the threshold where lease extension becomes urgent.

Extending a Shared Ownership lease works differently from extending a standard leasehold flat. You have the right to a lease extension but only once you own 100% — unless your housing association agrees to extend earlier. This is a significant gotcha: if you haven't fully staircased, you may not be able to extend your lease through the standard statutory route. See our guide to extending a leasehold flat lease for the statutory process and costs.

Service Charges and Ground Rent

As a Shared Ownership leaseholder, you pay 100% of the service charge even though you may own only 25% of the property. Service charges on new builds have averaged £1,500–£3,500 per year; some developments charge significantly more for managed amenities, concierge, or cladding remediation. Under the Leasehold Reform (Ground Rent) Act 2022, ground rent on new leases is capped at a peppercorn (effectively zero), but older Shared Ownership leases may still carry reviewable ground rent clauses.

For a full checklist of leasehold due diligence before buying, see our buying a leasehold flat UK checklist.

The Repair and Maintain Obligation

Shared Ownership leases require the leaseholder to maintain and repair the property to the landlord's standard — even if you own only 10%. You cannot claim against the housing association for internal repairs. This is different from standard renting, where the landlord holds repair obligations under Section 11 of the Landlord and Tenant Act 1985. Budget for maintenance from day one.

Restrictions on Selling

If you own less than 100%, your housing association has a nomination period — typically 8 to 12 weeks — during which they have the right to find a buyer before you can market on the open market. The nominated buyer must be eligible for Shared Ownership. This slows the sales process significantly compared to selling a freehold or fully-owned leasehold.

Costs of Staircasing

Transaction	Typical Cost
Desktop valuation (1% annual staircase)	£300–£400
Full RICS valuation (5%+ staircase)	£300–£600
Solicitor fees per staircase transaction	£1,500–£3,000
Housing association admin fee	£150–£300
Land Registry fee	£20–£295 (scale fee based on share value)

If you staircase in three or four separate transactions on your way to 100%, total fees can exceed £15,000 — on top of the share purchase costs.

When Shared Ownership Makes Financial Sense

Shared Ownership can make sense when:

You are buying in a high-value area where a full purchase is out of reach but renting is also unsustainable
You plan to staircase progressively as your income grows
The combined cost of mortgage + rent + service charge is materially lower than local rents for a comparable property

It is unlikely to make sense when:

The service charge is very high (check three years of accounts from the housing association before buying)
The available share percentage is very low (10–20%), meaning your mortgage is tiny but your rent is substantial
You plan to sell within 2–3 years and won't recoup the staircasing transaction costs

What to Do Next

Check the First Homes register for your target area at gov.uk/first-homes — availability varies significantly by local authority
If considering Shared Ownership, ask the housing association for three years of service charge accounts and the current sinking fund balance before exchanging
Instruct a solicitor who specialises in Shared Ownership — standard conveyancers often miss lease-specific issues
Model the full cost (mortgage + rent + service charge + maintenance) against local market rent before committing