What is the Your First Home Scheme?
The Your First Home Scheme is a new government-backed initiative announced on 26 September 2026 to help first-time buyers in England purchase a new-build home with a much smaller deposit.
The scheme is expected to allow eligible buyers to purchase with a minimum deposit of just 2.5%, supported by a 20% government-backed equity loan. The remaining amount would normally be funded through a mortgage.
The government has confirmed that the full details of Your First Home will be announced at the next Budget, including the final eligibility rules, costs and implementation timetable.
How could Your First Home work?
The proposed structure could make a significant difference to first-time buyers who can afford monthly mortgage payments but struggle to save a large deposit.
For example, on a £250,000 new-build property:
- 2.5% buyer deposit: £6,250
- 20% government equity loan: £50,000
- Mortgage required: £193,750
This means the main mortgage would represent approximately 77.5% of the property value, rather than the buyer needing to arrange a 95% mortgage.
The government has also said the equity loan will include an initial interest-free period, although the length of that period and the charges that may apply afterwards have not yet been published.
This is important because mortgage rates are normally influenced by the loan-to-value, or LTV. A buyer borrowing around 77.5% of the property value may potentially have access to a different range of mortgage products compared with somebody borrowing 95%, although this will depend on which lenders eventually participate and their individual criteria.
If you are considering buying your first property, you can read more about my first-time buyer mortgage advice in Essex, including deposits, affordability and how much you may be able to borrow.
Who will be able to use Your First Home?
We do not yet have the full eligibility criteria.
The government has confirmed that the scheme is intended for first-time buyers purchasing new-build properties in England from developers participating in the scheme.
There will also be a household income cap and local property price caps, with the intention of targeting the support towards buyers who would otherwise struggle to purchase their first home. Developers joining the scheme will also be expected to contribute towards its costs.
The exact income limits and property price caps will not be known until the Budget.
For the official announcement and any future updates, you can also read the government’s information on the New first-time buyer scheme here.
Costs, Stamp Duty and what first-time buyers should do next.
Although a 2.5% deposit could make buying more accessible, the deposit is only one of the costs involved in purchasing a property.
First-time buyers should also budget for solicitor fees, surveys, mortgage fees where applicable, moving costs and insurance.
Will first-time buyers pay Stamp Duty?
Current Stamp Duty Land Tax rules in England give qualifying first-time buyers relief on properties costing up to £500,000.
Under the current rules, qualifying first-time buyers pay:
- 0% on the first £300,000
- 5% on the portion between £300,001 and £500,000
If the purchase price exceeds £500,000, First-Time Buyers’ Relief does not apply.
So on the £250,000 example above, an eligible first-time buyer would currently pay no Stamp Duty.
You can check the latest position using the official HMRC Stamp Duty Land Tax calculator.
What do we still need to know about Your First Home?
There are several important details that have not yet been announced.
These include the exact household income limits, local property price caps, length of the interest-free period, charges after the interest-free period, how and when the equity loan has to be repaid and what happens when the property is sold or remortgaged.
We also need to know which mortgage lenders and developers will participate.
Until those details are published, buyers should be cautious about assuming they will definitely qualify.
It is also important to remember that qualifying for the scheme will not automatically mean qualifying for the mortgage. Mortgage lenders will still assess income, expenditure, existing commitments, credit history and overall affordability.
If you want to get an idea of what mortgage payments could look like, you can use my mortgage calculator before arranging an appointment.
Should first-time buyers wait for the scheme?
Not necessarily. There are already mortgages available for first-time buyers with relatively small deposits, and whether waiting for Your First Home makes sense will depend entirely on your circumstances, how much you have saved and the type of property you want to buy.
Speaking to a mortgage adviser early can help you understand what is achievable now and how the new scheme might change your options once the final rules are announced.
I provide whole-of-market mortgage advice and regularly help first-time buyers across Essex and throughout the UK understand their affordability, deposit requirements and lender options.
If you are based locally, you can also read more about my mortgage advice in Romford.
The government has confirmed that the remaining details of Your First Home will be announced at the Budget, so I will update this guide as soon as the final criteria, lenders and launch timetable are confirmed.
Get in touch and book an appointment to see what’s possible. I can look at your deposit, income and circumstances, explain the options available now and how the new Your First Home scheme could fit in once the full details are confirmed.
We can then cover all of your options and help you understand the best route towards buying your first home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
