Last Updated: 29 September 2026
Your First Home scheme is the government’s brand-new answer to Britain’s deposit crisis, announced on 26 September 2026 and set to be confirmed at the Autumn Budget. If you have been saving for years but still cannot scrape together a 10% deposit, this could change everything. The headline is striking: buy a new-build home with just a 2.5% deposit, backed by a government equity loan of up to 20%.
In this guide, we explain exactly how the Your First Home scheme works, who qualifies, the key dates to watch, and how it compares to the old Help to Buy programme. You will also see what the markets made of the announcement — housebuilder shares soared within hours — and the seven practical steps to take now so you are ready when pre-registration opens.
Your First Home scheme at a glance: Announced 26 September 2026, the Your First Home scheme lets first-time buyers in England purchase a new-build home with a 2.5% deposit plus a government equity loan of up to 20% of the property’s value, with an initial interest-free period. It will be formally confirmed at the Budget on 28 October 2026, with buyer pre-registration expected by the end of the year.
What Is the Your First Home Scheme?
Definition: The Your First Home scheme is a UK government equity loan programme for first-time buyers in England. Eligible buyers put down a 2.5% deposit, the government lends up to 20% of the property’s value as an equity loan, and a standard mortgage covers the remaining 77.5%. It applies only to new-build homes bought from developers signed up to the scheme.
The Ministry of Housing, Communities and Local Government unveiled the Your First Home scheme over the weekend of 26 September, with Chancellor John Healey due to set out the full details at the Autumn Budget on Wednesday 28 October. It is explicitly aimed at buyers without the “Bank of Mum and Dad” — the millions of renters who can afford monthly mortgage payments but cannot save a large lump sum.
The scheme is a revival of Help to Buy, which ran from 2013 to 2022 and helped more than a third of a million people onto the property ladder. Ministers argue the Your First Home scheme will do the same job while also stimulating housebuilding at a time when the new-build market faces rising construction costs and international economic headwinds.
How the Your First Home Scheme Works: The Numbers
The mechanics of the Your First Home scheme are refreshingly simple. Here is how the money stacks up on a typical £200,000 new-build home:
| Component | Percentage | Amount on £200,000 home |
|---|---|---|
| Your deposit | 2.5% | £5,000 |
| Government equity loan | 20% | £40,000 |
| Mortgage | 77.5% | £155,000 |
| Saving vs 95% mortgage | — | £35,000 less borrowing |
That £35,000 reduction in borrowing is the real prize. Because the equity loan carries an initial interest-free period, the government says buyers could save hundreds of pounds per month compared with a 95% mortgage on the same property. The loan must be repaid in full when you sell the home, within 25 years, or in line with your main mortgage — whichever comes first.
One crucial point: the government’s contribution is a loan, not a grant. The Your First Home scheme should not be treated as free money towards a deposit. As an equity loan, the amount you repay can rise or fall with the value of your home.
Who Qualifies for the Your First Home Scheme?
Eligibility for the Your First Home scheme is deliberately targeted. The confirmed criteria so far:
- First-time buyers only — you must never have owned a property before, in the UK or abroad.
- New-build homes in England — the property must be newly built and bought from a developer signed up to the scheme. Scotland, Wales and Northern Ireland are not covered.
- Household income cap — a maximum income threshold will apply, with the exact figure announced at the Budget.
- Local property price caps — maximum purchase prices will vary by region to keep support targeted at those who need it.
Full eligibility rules and the implementation timetable will be published by the Chancellor at the Budget. If you are currently renting and saving, it is worth checking whether your income and target area are likely to fall within the caps once they are announced.
Buying your first home also means navigating stamp duty. Read our guide to the stamp duty changes to understand the tax side of your purchase.
Key Dates for the Your First Home Scheme
Timing matters with the Your First Home scheme. Mark these dates:
- 26 September 2026 — the government announced the Your First Home scheme.
- 28 October 2026 — the Autumn Budget, when the Chancellor formally confirms the scheme and publishes costs, income caps and timelines.
- End of 2026 — pre-registration for buyers is expected to open, according to the government’s announcement.
Applications are not yet open, and no buyer can reserve a loan today. The official GOV.UK announcement of the new first-time buyer scheme stresses that further details, including costs and implementation timelines, will follow at the Budget.
Your First Home Scheme vs Help to Buy: What’s Different?
The Your First Home scheme is openly modelled on Help to Buy, but there are important differences:
| Feature | Help to Buy (2013–2022) | Your First Home scheme |
|---|---|---|
| Minimum deposit | 5% | 2.5% |
| Equity loan | Up to 20% (40% in London) | Up to 20% |
| Interest-free period | 5 years | Initial interest-free period (details at Budget) |
| Developer contribution | No | Yes — developers must contribute |
| Funding | New Treasury funding | Reprioritised existing budgets |
| Income/price caps | Regional price caps only | Household income cap + local price caps |
The standout change is the 2.5% deposit — half the old minimum. On a £250,000 home, that is the difference between a £12,500 deposit and just £6,250. For renters in expensive cities, that could cut years off the saving timeline.
The developer contribution is new too. Housebuilders signing up to the Your First Home scheme will be expected to help cover its costs — a condition that could affect which developments participate.
What the Experts Say: Market Reaction to the Scheme
The City’s verdict on the Your First Home scheme arrived within hours. On Monday 28 September, London-listed housebuilders surged: Barratt Redrow jumped 12.9%, while Persimmon, Taylor Wimpey, Bellway and Vistry added between 10% and 15%. Building materials suppliers joined the rally, with Ibstock up 22.3% and Marshalls up 13.8%, lifting the FTSE 250 by 0.72%.
“The UK government’s new equity loan scheme could be the catalyst the UK homebuilding sector has been waiting for. While the finer print will matter, anything that lowers the deposit barrier for first-time buyers should translate into stronger demand.”
Jack Fletcher-Price, equity analyst at Morningstar
Industry bodies welcomed the move. Kate Davies, executive director of the Intermediary Mortgage Lenders Association, noted that around 3.5 million households who might historically have become first-time buyers have failed to do so since the financial crisis — a measure of the deposit barrier the Your First Home scheme is trying to dismantle.
Not everyone is cheering. A Reuters analysis of the homebuilder rally carried a sceptical Breakingviews take, calling the plan a “subpar sequel” to Help to Buy and questioning whether it will genuinely boost supply or simply inflate new-build prices. That is the central debate to watch: does the Your First Home scheme help buyers, builders, or both?
7 Steps to Get Ready Before Applications Open
You cannot apply for the Your First Home scheme yet — but you can get ahead. Here is your preparation checklist:
- Check you are a genuine first-time buyer. If you have ever owned property anywhere in the world, you are excluded from the Your First Home scheme.
- Start saving the 2.5% now. On a £220,000 home that is £5,500 — plus solicitor fees, surveys and moving costs, which the scheme does not cover.
- Get a mortgage agreement in principle. Lenders will still assess affordability on the 77.5% mortgage; a decision in principle strengthens your position.
- Research new-build developments near you. Only developers signed up to the Your First Home scheme qualify — watch for announcements after the Budget.
- Track the income and price caps. When the Chancellor publishes them on 28 October, check immediately whether you fall inside the limits.
- Understand equity loan risk. If your home rises in value, you repay more than you borrowed; if it falls, you repay less. Get independent financial advice.
- Register your interest. Pre-registration is expected by the end of 2026 — sign up the moment it opens, as demand will be intense.
Could the Your First Home Scheme Push Up House Prices?
Every demand-side housing scheme faces the same awkward question: will the Your First Home scheme simply inflate the prices of the new-build homes it covers? It is what critics said about Help to Buy, and early analysis suggests the debate will run again.
The bullish case is that the Your First Home scheme expands the buyer pool rather than bidding up existing stock. Because it applies only to new-builds from signed-up developers, extra demand should translate into extra construction — which is precisely why ministers paired the announcement with a stimulus argument for the building sector.
The bearish case is subtler. Developers who know buyers arrive with a 20% government loan may feel less pressure to keep prices competitive, particularly on sought-after plots. The required developer contribution to the Your First Home scheme could also be quietly priced into asking prices.
For buyers, the practical takeaway is to treat the Your First Home scheme as a financing tool, not a reason to overpay. Compare the new-build premium against comparable existing homes nearby, negotiate hard on extras and incentives, and remember that the equity loan magnifies both gains and losses when you eventually sell.
Frequently Asked Questions
What is the Your First Home scheme?
The Your First Home scheme is a UK government equity loan programme announced on 26 September 2026. First-time buyers in England can purchase a new-build home with a 2.5% deposit, a government equity loan of up to 20% of the property’s value, and a mortgage covering the remaining 77.5%. It will be confirmed at the Autumn Budget on 28 October 2026.
When does the Your First Home scheme start?
The scheme was announced on 26 September 2026 and will be formally confirmed at the Autumn Budget on 28 October 2026, when full details including costs and timelines are published. Pre-registration for buyers is expected to open by the end of 2026. Applications are not open yet.
How much deposit do I need for the Your First Home scheme?
You need a minimum deposit of just 2.5% of the property’s value. On a £200,000 new-build home, that is £5,000. You will also need to cover solicitor fees, surveys and moving costs separately, as the scheme does not pay these.
Is the Your First Home equity loan interest-free?
The equity loan comes with an initial interest-free period, which the government says could save buyers hundreds of pounds per month compared with a 95% mortgage. The exact length of the interest-free period and subsequent charges will be confirmed at the Budget. The loan must be repaid in full on sale, within 25 years, or in line with your main mortgage.
Can I use the Your First Home scheme on any property?
No. The scheme applies only to new-build homes in England purchased from developers signed up to the programme. It cannot be used for existing homes, and Scotland, Wales and Northern Ireland are not covered. Household income caps and local property price caps will also apply.
Do I have to pay the equity loan back?
Yes. The government’s 20% contribution is a loan, not a grant. It must be repaid in full when you sell the property, within 25 years, or alongside your main mortgage. Because it is an equity loan, the repayment amount rises or falls with your home’s value.
Conclusion: Is the Your First Home Scheme Right for You?
The Your First Home scheme is the most significant boost for first-time buyers since Help to Buy ended. A 2.5% deposit plus an interest-free equity loan could bring homeownership years closer for renters locked out by the deposit barrier.
But it is not free money, and the details that matter — income caps, price limits, interest terms — land on 28 October. Use the waiting time wisely: save your deposit, secure a mortgage agreement in principle, and research participating developments.
Set a reminder for Budget day, register your interest as soon as pre-registration opens, and get independent financial advice before you sign. The Your First Home scheme rewards the prepared — make sure that is you.
