13/10/2026
Your First Home: a new government-backed house buying scheme announced for first-time buyers.
The Government has announced the launch of Your First Home, a brand-new equity loan scheme designed to help first-time buyers get on the property ladder with just a 2.5% deposit.
The new scheme, which will be officially launched at the upcoming Budget, aims to break down the deposit barriers faced by some potential buyers when trying to buy their first home. It marks the return of a government-backed equity loan scheme in England, something which hasn’t been available since the closure of Help to Buy.
While all the details are yet to revealed, here’s what we know so far.
A smaller deposit:
Under the scheme, potential buyers will need just a 2.5% deposit – for example, £8,750 for a property worth £350,000.
The Government will then provide a loan worth 20% of the property’s value to help pay for the purchase. For example, on our £350,000 home, the equity loan would provide a further £70,000 towards the purchase.
That extra buffer means a borrower would require a smaller mortgage, compared to if they were buying with a 5% deposit alone.
An interest-free loan:
Similar to Help to Buy, the equity loan will have an initial interest-free period, meaning in our example, there will be no interest to pay on the £70,000 for a set period. Details on how long and how it will work are expected to be confirmed as part of the Budget.
By combining the interest-free equity loan and a smaller mortgage, it is designed to reduce monthly housing costs compared to someone borrowing 95% of the property’s value. By how much? The Government believes it could be as much as “hundreds of pounds per month” compared to a 5% deposit and a 95% loan-to-value (LTV) mortgage.
Only available on new builds:
The scheme will be available on new-build properties brought through developers signed up to the scheme. Further details of which developers and where are yet to be confirmed. However interest is expected to be high from housebuilders keen to tap into the additional demand the scheme could create.
Following the announcement of the scheme, shares at major housebuilders – including Taylor Wimpey, Persimmon and Barratt Redrow all recorded double-digit gains.
Caps and limits:
The Government has said the scheme will include a household income cap and local property price caps. In simple terms, this means the scheme won’t be available to first-time buyers above a certain salary or new-build property price.
The income gap is intended to focus support on buyers who need help getting onto the property ladder, while the local property price caps will likely aim to keep scheme for houses that are most suitable for a first-time buyer. The property price limits are expected to vary depending on where you are buying, reflecting the differences in house prices across England.
The exact income and property price caps are yet to be announced and are expected to be confirmed at the Budget. If you are considering the scheme, these will be important figures to check once the full details are released.
Is it time to buy your first home?
Your First Home could open the door for more first-time buyers, but with full details yet to be confirmed, it is important to understand what the scheme could mean for your own circumstances.
Speaking to a mortgage adviser now can help you work out what you could realistically afford, understand your budget and prepare for when the scheme goes live. An adviser can also look at the full range of mortgage options available to you, rather than just focusing solely on the new scheme.
There are mortgage options already available to help first-time buyers, while looking beyond new-build properties could open up more choice. An adviser can help you understand the options available now and consider whether waiting for the new scheme could be right for your circumstances.
With the upcoming Budget expected to provide more detail on the scheme, getting advice early could put you in a stronger position to make an informed decision when the time comes.
To start your home buying journey, speak to a mortgage adviser today!
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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Please note: As the First Home Scheme has not yet officially launched and further details are expected to be confirmed in the upcoming budget, the information contained within this article is based on what is currently known and may be subject to change.
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