CONTACTThe new Your First Home scheme has now been confirmed, offering eligible first-time buyers the opportunity to purchase a home with a deposit from just 2.5%, supported by a 20% government-backed equity loan.
Announced as part of the UK Government's Budget on 28 October 2026, £4.7 billion has been committed to Your First Home. The scheme is expected to help around 70,000 households in England onto the property ladder and support the delivery of an estimated 20,000 new homes.
For first-time buyers finding that saving a deposit is one of the biggest barriers to homeownership, it could significantly reduce the amount of money needed upfront.
Here's what we know so far.
Your First Home is a new government-backed equity loan scheme designed to help eligible first-time buyers who would otherwise not be in a position to purchase a home.
Under the scheme, eligible buyers will be able to access a 20% equity loan, alongside their own deposit and a mortgage.
The minimum deposit will be 2.5% of the property's purchase price, while buyers will be able to contribute a deposit of up to 15%.
The Government has allocated £4.7 billion to the programme.
For an eligible purchase, the funding could be made up of:
The government equity loan will be interest-free for the first five years, after which interest will gradually increase.
That means buyers could potentially purchase with significantly less money saved for a deposit than they would need using a conventional mortgage alone.
Let's take an example of a first-time buyer purchasing a £450,000 home.
With the minimum 2.5% deposit:
This simple illustration shows why Your First Home could make a substantial difference to buyers struggling with the upfront cost of purchasing.
Importantly, buyers will still need to meet the relevant eligibility criteria and satisfy a mortgage lender's own affordability and lending requirements.
Who will be eligible for Your First Home?
Your First Home is aimed at first-time buyers who would otherwise not be in a position to purchase a residential property.*
The confirmed household income limits are:
Property price caps will also apply.
Within London, these have been confirmed as:
The London classifications are therefore particularly important when considering whether a property may qualify.*
According to the government's Budget announcement:
Initially, the programme will be delivered by Homes England. Responsibility is expected to move to the National Housing Bank in the medium term, subject to the required legal and regulatory changes.
The Government expects Your First Home to support the delivery of an estimated 20,000 new homes, and developers wishing to participate will be expected to make a financial contribution towards the scheme, with contributions set on a sliding scale.
For buyers considering a new-build home, it is therefore worth checking whether their chosen development and property will participate in and qualify for Your First Home once the scheme opens.
Your First Home shares one important characteristic with the former Help to Buy Equity Loan scheme: government support takes the form of an equity loan.
However, buyers should not assume the schemes have identical rules.
The confirmed Your First Home scheme will provide a 20% equity loan, allow deposits from 2.5%, apply household income and property-price caps and offer a five-year interest-free period on the equity loan.
Buyers should therefore assess Your First Home according to its own eligibility criteria and terms rather than treating it as a direct continuation of Help to Buy.
Yes.
Your First Home reduces the proportion of the property price that needs to be funded using the buyer's deposit and mortgage, but buyers will still need to secure the necessary mortgage finance.
A smaller deposit does not automatically mean a buyer will qualify for a mortgage. Individual lenders will make their own affordability and lending decisions.
Yes. It is an equity loan, rather than a grant.
The Budget confirms that the equity loan will have a five-year interest-free period, with a gradual increase in interest after five years.
Buyers considering the scheme should make sure they understand the full equity-loan terms and longer-term costs when the detailed scheme documentation becomes available.
Could Your First Home make buying a home more affordable?
For some first-time buyers, the biggest challenge isn't necessarily making monthly mortgage payments. It's accumulating a large enough deposit while continuing to pay rent and everyday living costs.
Reducing the minimum deposit requirement to 2.5% could make that initial hurdle considerably smaller for eligible purchasers.
On a £500,000 property, for example:
5% deposit = £25,000
compared with
2.5% deposit = £12,500
That's £12,500 less needed for the initial deposit.
The scheme's 20% equity loan would then represent £100,000 of a £500,000 purchase price.
Of course, this doesn't mean every first-time buyer purchasing at that price could borrow the remaining amount. Mortgage affordability, income, expenditure, credit history and individual lender criteria will continue to matter.
If you're thinking about buying your first home, you don't need to wait for Your First Home to launch to start planning your next move.
There are a few things you can start exploring now:
Getting prepared now can help you understand whether Your First Home could be an option for you when applications open.
Our sales team is here to help you explore the homes available and talk through the different routes that could help you take your first step onto the property ladder.
Your First Home FAQs
What deposit do I need for Your First Home?
The minimum deposit has been set at 2.5% of the property purchase price. Buyers may contribute up to 15%.
How much will the Government contribute?
Eligible buyers will be able to access a 20% government-backed equity loan.
What is the Your First Home income limit in London?
The household income cap will be £140,000 in London. Outside London, it will be £110,000.
What is the Your First Home property price limit in London?
The cap will be £650,000 in Inner London and £500,000 in Outer London.
When will Your First Home launch?
Pre-registration is due to open by the end of December 2026, followed by full applications in February 2027 and the first equity loans from April 2027.
Is the government equity loan interest-free?
It will be interest-free for the first five years, with interest gradually increasing after that point.
How do I know if a home qualifies?
Eligibility will depend on factors including the buyer, household income, property value and participation in the scheme. Buyers should check the final scheme criteria for their chosen property when applications open.
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