Key Stage: KS5
Year group: Year 12 / Year 13
Age range: 16–18
Duration: 50 minutes
Subject: PSHE / Economics / Citizenship
Cost: Free

Learning aim

Students can compare renting, shared ownership, and full home ownership for a 21-year-old; explain how a Lifetime ISA accelerates a first home deposit; and apply basic mortgage affordability calculations.

CURRICULUM National Curriculum links

PSHE Association KS5 H30: housing decisions, mortgages, the rent-vs-buy framework
Citizenship KS5: the housing market and government schemes (LISA, Shared Ownership)
Maths A-Level: percentage of income, ratios, compound calculation

RESOURCES What you'll need

Sample regional house prices (London £450k, Manchester £225k, Nottingham £180k)
Mortgage affordability rule of thumb (4.5× salary)
LISA bonus calculator (25% on contributions up to £4,000/year)
Stamp Duty Land Tax bands for first-time buyers (0% to £300k, 5% £300k-£500k)
UK Tax Drag's LISA vs ISA for first home for teacher prep

LESSON Lesson structure (50 minutes)

Opening
HOOK

Show three 21-year-olds: Aisha in London (rent £950/month flatshare), Ben in Manchester (rent £550/month studio), Carlos in Nottingham (lives with parents, saves £400/month). Ask: who is in the best position to buy a home by 25? Take 3 answers, then say: "It depends on more than just income — let's see why."

Direct teach
TEACH

Define the three main housing options: (a) Renting — flexible, no equity, market exposure. (b) Shared Ownership — buy 25-75% of the property, pay rent on the rest, government-backed scheme. (c) Full purchase — usually needs ~10% deposit + costs. Explain LISA: £4,000/year contributions, 25% bonus, must be used for first home up to £450k or age 60+ withdrawal. Penalty for other use = 25% on the full pot.

Pupils apply
GUIDED

Calculate Carlos's deposit timeline. He saves £400/month from age 21. Half (£200) goes into a LISA, getting +25% bonus (£50/month = £600/year bonus). Other £200 in regular S&S ISA. At 25 (4 years): LISA pot = £200 × 48 + bonus £2,400 = £12,000. ISA pot = £200 × 48 + ~10% growth = ~£10,500. Total deposit pot: £22,500. Mortgage at 4.5× salary £32k = £144,000. House price he can afford: £144,000 + £22,500 = £166,500. In Nottingham average prices: that buys a small flat or terrace.

Stretch / depth
CHALLENGE

Now Aisha in London: she earns £35,000 but rents at £950/month, leaving ~£300/month saved. Over 4 years: ~£14,400 deposit (no LISA bonus if not used). Average London first-flat: £350,000. Mortgage at 4.5× = £157,500. She's £178,000 short. Discuss: what could Aisha do? Move out of London, parental help, partner buying together, wait until 28-30.

Close
PLENARY

Each pupil writes one thing they'd advise themselves about housing decisions when they're 21. Share three. Land on: open a LISA the moment you turn 18, save consistently, consider regional choice, don't rush — renting is fine as a base.

DIFFERENTIATION Adapting for all learners

Support (working below ARE)

Focus only on the LISA bonus calculation. Skip mortgage affordability. Use simple "save £X for Y years = £Z deposit" without bonus complexity.

Stretch (working above ARE)

Pupils research Shared Ownership scheme rules in their region. Calculate the total monthly cost (rent + mortgage) for a 25% shared-ownership purchase of a £200,000 property and compare to renting equivalently.

SEND SEND adaptations

For pupils with autism: provide a visual decision tree "do you want to live somewhere fixed for 5+ years? Yes → buy. No → rent." For dyscalculia: focus on the qualitative comparison rather than detailed mortgage arithmetic.

EAL EAL support

Vocabulary: "deposit", "mortgage", "Shared Ownership", "Lifetime ISA", "stamp duty", "first-time buyer". Sentence frames: "I could afford a £___ property because my deposit is ___ and my salary is ___."

ASSESSMENT Assessment criteria

Pupils can: (1) compare renting, shared ownership, and buying; (2) calculate a LISA deposit pot over a stated period; (3) apply the 4.5× salary mortgage rule; (4) articulate the trade-off between London earnings and London prices.

HOME Homework pack

Three activities applying housing-decision math. ~40 minutes.

Regional comparison

What pupils do: Research average first-time-buyer property prices in three UK cities (your choice). Calculate the deposit needed (10%) and the mortgage required for each. Use £30,000 salary as the affordability anchor.

Expected output: Table with 3 rows and 4 columns (price, deposit, mortgage, affordability gap).

Marking guidance: 8 marks — 2.5 per city + 0.5 conclusion.

5-year LISA plan

What pupils do: Build a 5-year deposit plan using a LISA starting at age 18. Maximum contribution. Show monthly accumulation, bonus accrual, and total deposit pot at age 23.

Expected output: Monthly breakdown with annual subtotals.

Marking guidance: 6 marks — 3 for contribution accuracy, 3 for bonus accuracy.

Shared vs full ownership

What pupils do: In 250 words, compare Shared Ownership with full purchase for a 22-year-old earning £25,000. Cover: monthly cost, equity build-up, exit flexibility.

Expected output: 250-word comparison.

Marking guidance: 6 marks — 2 per dimension.

SAFEGUARDING Classroom safeguarding

Note for teachers: Do not ask pupils about their own family's tax band, salary, or income. Frame all examples through fictional salaries. Be aware some pupils may be unsure of family financial circumstances — focus on the public-spending side of the lesson, not personal income.

ANSWERS Answer key & differentiation

Answer guide

Guided check (Carlos): LISA £200 × 48 = £9,600 + 25% bonus £2,400 = £12,000; S&S ISA £9,600 + growth ≈ £10,500; deposit pot £22,500; mortgage 4.5 × £32,000 = £144,000; budget ≈ £166,500.
Stretch check (Aisha): £300 × 48 = £14,400 saved; 4.5 × £35,000 = £157,500; against a £350,000 flat she is ~£178,000 short — the point is that London pay does not close the London price gap on one income.
Homework "Regional comparison" is research-based, so mark the method: deposit = 10% of price; mortgage = price − deposit; affordability gap = mortgage − (4.5 × £30,000 = £135,000). Full marks need internally consistent rows and a conclusion naming the most realistic city.
Homework "5-year LISA plan" at maximum contributions: £4,000/year + £1,000 bonus/year → contributions £20,000 + bonuses £5,000 = £25,000 at age 23 before any interest (award the bonus marks only if the 25% is applied to each year's contribution, not once at the end). Remind pupils the bonus stops counting for a home above £450,000 and a non-house withdrawal before 60 loses 25% of the whole pot.
Homework "Shared vs full ownership" strong answers cover: 25% share of £200,000 = £50,000 (small mortgage and deposit); rent of roughly 2.75% a year on the unowned £150,000 ≈ £340/month plus service charge; equity builds only on the owned share; staircasing and resale restrictions reduce exit flexibility; full purchase needs the bigger deposit but keeps all equity and freedom. Credit pupils who know newer schemes allow initial shares from 10%.

Support (scaffold)

LISA-only sum with round numbers: "£100 saved → £125 in the pot" — then scale up (×2 for £200/month, ×40 for £4,000/year).
Give the 4.5× rule as a fill-in strip: salary → ×4.5 → mortgage; price − mortgage → deposit needed.
Keep one worked row of the regional table on the board as the model to copy.

Stretch (challenge)

Add stamp duty to the picture: first-time buyers pay 0% up to £300,000 (relief available up to £500,000 in 2026/27), so Carlos's £166,500 flat attracts £0 SDLT — but ask what happens if a parent who already owns property buys with him (the 5% additional-property surcharge can apply to the whole price).
Shared-ownership total-cost model: 25% share mortgage (~£45,000 over 30 years at ~5% ≈ £242/month) + £344 rent + ~£100 service charge ≈ £686/month — compare with renting the same flat outright and with full purchase.
Ask pupils to stress-test the 4.5× rule: what happens to each of the three characters if rates rise 2 percentage points at remortgage?

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