Saif Ali Khan
London: A new government-backed housing scheme designed to help first-time buyers overcome the deposit barrier is set to be confirmed in the October Budget.
The “Your First Home” scheme will allow eligible first-time buyers in England to purchase a new-build property with a deposit of as little as 2.5 per cent. The government is expected to provide an equity loan worth up to 20 per cent of the property price, reducing the amount buyers need to borrow through a conventional mortgage.
The government says the scheme is particularly aimed at people who can afford monthly mortgage payments but struggle to accumulate a large deposit, including those without financial assistance from the so-called “Bank of Mum and Dad”. The government equity loan will initially be interest-free, potentially reducing monthly mortgage costs compared with a 95 per cent mortgage.
However, the scheme will not be open to every buyer. The government has said there will be household-income limits and regional property-price caps, with the precise thresholds to be announced by Chancellor John Healey in the 28 October 2026 Budget. Developers participating in the scheme will also be expected to make a contribution.
The initiative is intended not only to help households buy their first property but also to stimulate the new-build housing market at a time when higher construction costs and mortgage rates have weakened demand.
The scheme bears similarities to the former Help to Buy programme, which ended in 2023, but the government says the new initiative will be more targeted. Analysts have nevertheless warned that increasing purchasing power without a corresponding increase in housing supply could put upward pressure on house prices.
The government has indicated that pre-registration could begin by the end of 2026, although the final terms and implementation timetable remain subject to the Budget announcement.
Important distinction: “Your First Home” is a new proposed equity-loan scheme. It is not the same as the existing First Homes scheme, under which eligible buyers in England can purchase certain properties at discounts of at least 30 per cent.
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