Owning a home in the Home in the United Kingdom is harder year after year. A buyer will have to save up a huge sum of money to even think about purchasing a home. A recent Halifax study in 2016 shows the average price needed for the first time is £400,000. That is not going to encourage low-income earners to pursue a dream of buying a home. However, fortunately there are some government schemes and policies to help provide solutions for people with small budgets for their first home.

As a government initiative to allow more people to own homes, these are the different scheme to help low-income individuals.

Help to Buy ISA

Help to Buy ISA is tax-free saving account scheme for which the government will add 25% bonus up to £3,000 for your first home. It means for every £200 you deposit, the government ads in £50. The good news is that multiple first-time buyers can claim the benefit to buy a property. Property prices below £250,000 (£450,000 in London) are eligible for this scheme.

This is not high considering the average prices of homes, but it is free money. You should definitely consider signing up if you are looking to buy your first home.

Lifetime ISA

Lifetime ISA allows individuals to save money towards a first home. With the government contributing a 25% bonus for the amount collected before the individual is 50 years. There’s a bonus limit of £1,000 per year per individual. The price cap for this scheme is set at £450,000 anywhere in the United Kingdom.

The scheme is effective from April 4^th, 2017 and you have to be under the age of 40 to qualify. Better hurry up if your 40^th birthday is near.

Help to Buy Equity Loans

This scheme allows individuals to borrow 20% of the value of the property from the government when you deposit a small 5%. The property you are planning to buy does have to be worth less than £600,000. You do not need to pay interest on the loan for five years and is linked to inflation.

The equity loan scheme is ideally suitable to lower the mortgage rates from a lender. Since you are borrowing 75% rather than 95%, it will reduce your financial burden.

Shared ownership scheme

Shared ownership allows you purchase 25 to 75 percent share of property for buyers with less than £80,000 annual income. A process termed as “staircasing” allows the buyer to buy more chunks of the property until they own 100% of the house.

The scheme is available for resale and new-build homes. As you use staircasing, the value of the chunks is calculated on current market value. This is done by the Housing Association and requires a valuer’s fee every time.

Starter Homes

The scheme was launched in March of 2015. The plan is to get 200,000 new homes built to facilitate new home buyers aged between 23 and 40. Starter Homes provides 20% discount to properties of the market price. The price cap for starter homes are set at £250,000 (£450,000 in London), and they cannot be sold or rented during the first five year of first purchase.