This article explores how shared ownership, rent to buy and no or low deposit mortgages can help essential workers with homeownership amid the housing crisis.
30/12/2025By Pauzible Team · Editorial Team
The Housing Crisis Facing Essential Workers
Essential (or “key”) workers, from NHS staff and care workers to teachers, police and transport employees, have found it increasingly difficult to buy homes amid the country’s housing affordability crisis. Years of increasing house prices, wage stagnation and high rents have pushed homeownership out of the reach of many of these key workers. A Guardian analysis found that low-paid key workers could not afford an average-priced home in 98% of Great Britain, as rising prices, pay freezes and steep rents mean that they struggle to save for a deposit [1]. As a result, even vital community members, such as those who kept society running during the pandemic, are often priced out of living in the communities they serve.
This housing crisis is part of a broader trend. In 2024, the median home in England cost 7.7 times the median full-time salary (and 5.9 times in Wales), far above historical affordability levels [2]. Even the typical first-time buyer needs a decent deposit and large mortgage, which essential workers on moderate incomes find hard to attain. Many key workers end up channelling a large share of their income into rent, leaving little ability to save. The average UK rent hit £1,339 per month in 2025 [2]. A combination of factors has thus created a pressing need for new pathways to homeownership that can help essential workers.
Innovative Homeownership Models and Schemes
In response to the housing crisis, a range of emerging models and support schemes are offering essential workers alternative routes on to the property ladder. These innovative approaches aim to reduce upfront costs or provide stepping stones from renting to owning. We explore below some of the key pathways, from discounted purchase schemes to “rent-to-buy” arrangements and low or no-deposit mortgages, that are creating opportunities for essential workers to become homeowners.
1. First Homes – Discounted House Prices for Key Workers
One relatively recent initiative is the First Homes scheme in England, which allows first-time buyers to purchase a home at a 30%-50% discount to its market price [3]. These discounted new-build homes (or resales of homes previously sold as discounted new homes) are intended to remain affordable in perpetuity. When the owner sells, the same percentage discount is passed on to the next buyer. Local authorities can prioritize key workers, as well as local residents or lower-income applicants, for First Homes [3].
For example, a nurse, teacher or police officer meeting the first-time buyer and income criteria (capped at £80,000 household income or £90,000 in London) could buy a new home under this scheme below the market price. Whilst the buyer must still qualify for a mortgage on at least half of the home’s value, but the hefty upfront cost is dramatically reduced. By slashing prices up to 50%, First Homes can make ownership viable for essential workers who would otherwise be priced out.
2. Shared Ownership and Lease-to-Own Options
Another long-standing route that continues to evolve is Shared Ownership. This allows a buyer to purchase a share of a property, often 25%–75% to start with, although some newer schemes allow as little as 10%, and pay rent on the remaining portion. Many housing associations and developers offer shared ownership homes. Over time, the owners can “staircase” by buying more shares of the property as and when they can afford it, eventually buying up to 100% of it. Shared ownership means lower initial deposit and mortgage requirements since you only need financing for the share you are buying, a significant help for those with limited savings and lower incomes.
There are also emerging “lease-to-own” or “rent-to-buy” models that bridge renting and owning. Under the government’s Rent to Buy program in England, housing providers offer homes for rent at 20% below market rent to eligible tenants so that they can save money towards a deposit [3]. Tenants can typically rent at the discounted rate for several years, often five years, while they continue to accumulate savings. They then have the option of purchasing the home either outright or through shared ownership, once they have saved a sufficient deposit and obtained a mortgage [3]. In essence, the scheme gives renters financial breathing space to transition to ownership. London has a similar London Living Rent program with below-market rents to help tenants, including key workers, eventually buy. These lease-to-own approaches directly tackle the deposit-savings hurdle that so many essential workers struggle with, by lowering rent and earmarking that benefit toward their future purchase.
3. No-Deposit and Low-Deposit Mortgages
Skipton Building Society recently launched the UK’s first no-deposit mortgage since 2008 that does not require a guarantor. Branded the “Track Record” mortgage, it is aimed squarely at the “Generation Rent” cohort of reliable renters. The product enables first-time buyers with a strong 12+ month history of on-time rent and bill payments to get a mortgage with a 0% deposit, leveraging their rent payment track record instead of a deposit. This 100% mortgage is a five-year fixed rate deal with the maximum monthly payment capped at what the borrower has been paying in rent to ensure that mortgage payments will be no more than their proven rent affordability [4] . Skipton’s innovation recognizes that many essential workers manage high rents every month, effectively proving that they could also handle a mortgage, yet have zero left to save for a deposit. By removing the deposit requirement, this path opens the door to homeownership for those who are otherwise stuck renting despite reasonable finances. It is a safety-checked 100% mortgage using rental history and credit checks in place of family guarantors or collateral.
In addition to true no-deposit options, some lenders have introduced “low-deposit” mortgages requiring just 1%–5% deposit. In 2024, Yorkshire Building Society began offering first-time buyers a mortgage with only a £5,000 deposit, which could equate to as little as 1% of the property price for homes of up to £500,000, while lending the other 99% of the value [5]. This 99% loan-to-value product, available through Yorkshire Building Society’s Accord Mortgages arm, is a 5-year fixed deal with an interest rate of around 5.99%. It still requires borrowers to pass rigorous affordability and credit checks, and excludes new-build flats to limit risk [5]. For an essential worker who might only have a few thousand pounds in savings, this can be a game-changer. It also aims to level the playing field for those without the “Bank of Mum and Dad”. Currently, about 40% of first-time buyers get family financial help with deposits [5], a resource many key workers do not have. Other lenders offer similar 95-99% loan-to-value deals, often with conditions such as a family member providing some security (e.g. Barclays’ family springboard mortgage where relatives park savings as indemnity) [5]. The government has also backed a Mortgage Guarantee Scheme incentivizing lenders to offer 95% mortgages, which has helped keep low-deposit options available. For essential workers, these mortgages mean that a deposit is no longer an insurmountable barrier to buying a home.
4. Builder and Community Support for Key Workers
Beyond financial products, there are instances of housebuilders and local communities stepping in to help essential workers on to the property ladder. Some major developers offer key worker discounts or deposit contributions on new homes. For example, certain builders provide £5,000–£20,000 toward the deposit or knock a fixed percentage off the price for NHS staff, teachers and police etc [6]. These incentives, while not universal, can potentially supplement other schemes and make a housing development more affordable to those in public service roles.
Local councils and employers are also recognizing the need for action. A few forward-thinking NHS Trusts and local authorities have started to explore building dedicated affordable homes for rent or sale to key workers (sometimes on public land). For instance, London’s Mayor has promoted “intermediate housing” for key workers and some hospitals have invested in on-site staff accommodation that could convert to ownership opportunities down the line [7]. While such projects are still in their early stages, they represent a growing acknowledgment that retaining essential workers may require providing housing options in high-cost areas. Community-led housing initiatives such as community land trusts have also included key worker provisions, selling homes at below-market rates to local essential service providers, with resale price caps to keep them affordable long-term.
Informing and Empowering Essential Workers
With an array of pathways to homeownership, it is crucial that essential workers are informed about the options available. Many still assume that owning a home is unattainable, given the traditional 10-20% deposit requirements and high house prices. But as outlined above, solutions such as First Homes discounted properties, shared ownership, rent-to-buy tenancies, 5% or even 0% deposit mortgages, and special key worker incentives are increasingly in place to help. By reducing the upfront costs and aligning with what key workers can afford (for example, structuring mortgage payments around current rent levels), these schemes make the once-impossible goal of ownership potentially achievable.
Equally important is ensuring that essential workers can access expert guidance on navigating these programmes. Mortgage brokers and affordable housing providers can assist in matching individuals to the right scheme, be it a nurse qualifying for a First Home in her area or a pair of teachers using a 99% mortgage to buy their starter home. Each pathway comes with its own conditions and considerations (for example, shared ownership involves rent and maintenance charges on the unsold share; 100% mortgages carry higher interest and risk of negative equity if prices fall). Therefore, financial education and advice go hand-in-hand with the rollout of these new homeownership models.
A Brighter Outlook for Those Who Support Us
For the UK to address its housing crisis, it must find ways for those who support society, including nurses, paramedics, teachers, police officers, caregivers and others, to live in the communities they serve. The emerging models for homeownership provide much-needed hope and opportunity. By lowering the hurdles of huge deposits and leveraging innovative financing, essential workers are being given new paths to becoming homeowners. These paths not only reward their contributions but also help ensure that our towns and cities retain the key workers who keep them running.
While no single scheme will solve the affordability challenge overnight, each of these initiatives is a step toward a more inclusive housing market. From lease-to-own arrangements that turn rent into a future home to mortgages that recognize steady salaries and good rental histories in lieu of cash deposits, the landscape is starting to shift. Policymakers, lenders and communities are realizing that creative solutions can make the difference. For essential workers dreaming of stability and owning their own home, these innovations mean that homeownership is increasingly within reach, not a distant dream reserved only for those with high incomes or family wealth. The continued expansion and success of such programs will be key to turning the tide on the housing crisis and opening the door for those who take care of us all.
FAQs
Q. Who actually counts as an “essential” or “key” worker for affordable housing pathways?
A. In most government guidance, a key-worker is someone whose job is critical to keeping society running, such as health and social-care staff, teachers and childcare workers, police, fire and rescue service workers, prison and probation officers, transport and border workers, food-supply staff and workers in certain local-government and utility roles. Local councils can refine this list when they allocate discounted or priority homes, so it is worth checking your council’s definition before you apply.
Q. Can I really buy a home with no deposit if I am an essential worker?
A. Yes, some lenders now offer 100 % loan-to-value (LTV) mortgages aimed at long-term renters with a spotless 12-month rent record. They cap the monthly mortgage payment at (or below) what you already pay in rent and fix the rate for five years, so it mirrors your proven affordability. You will still need good credit, and the property must meet the lender’s valuation and price limits, but the usual 5-10 % cash deposit is waived.
Q. How does Rent-to-Buy work?
A. Under England’s Rent to Buy programme (and London Living Rent in the capital), a housing provider lets you rent a new-build home at about 20 % below the local market rent for up to five years. The saving you make is designed to help you build a deposit. During or at the end of that period you get first refusal to purchase the property, either outright or through Shared Ownership. If you decide not to buy, you can usually move on without a penalty.
Q. What is the First Homes discount and am I eligible?
A. First Homes lets first-time buyers purchase certain new-build (or resold) properties at 30 %–50 % below full market value. You must:
be a first-time buyer with household income under £80,000 (or £90,000 in London);
secure a mortgage for at least 50 % of the discounted price;
plan to live in the home as your main residence.
Local authorities can give priority to key workers when the properties first go on sale, improving your chances of securing one.
Q. If I don’t qualify for a 0 % mortgage, what’s the smallest deposit I might need? (H4)
A. Several mainstream lenders now offer 99 % LTV deals that accept just a £5,000 deposit (roughly 1 % on a home priced up to £500,000). These loans are five-year fixes with rigorous affordability and credit checks, and they generally exclude new-build flats to limit risk, so you will need to pick your property carefully.
Q. Are there any risks in taking a very low- or no-deposit route?
A. Low-deposit borrowing gets you on the property ladder sooner, but it carries extra considerations:
Negative-equity risk – with only 0-1 % equity, a modest fall in prices could leave you owing more than the home is worth.
Higher initial interest rates – 100 % and 99 % LTV mortgages are typically priced above standard 90 % LTV deals.
Limited property choice – some products exclude new-builds or flats.
Affordability still matters – lenders stress-test your income against higher future rates.
About the author
Pauzible Team
Editorial Team
The Pauzible Team consists of finance professionals and property market specialists dedicated to reinventing home ownership and BTL financing. With deep expertise across UK real estate and innovative financial products like Equity Partnership Agreements, we provide landlords and homeowners with the insights they need to unlock equity, navigate market volatility, and build sustainable wealth through property. Our mission is to make complex property finance simpler, quicker, and more accessible for everyone.
housing crisislease to ownrent to buy houseno deposit mortgage1 deposit mortgage
Ready to see what Pauzible could unlock?
Explore how accessing equity from your BTL property could support your business investment plans.
No obligation. Just a clear view of what might be possible.
