A new government-backed equity loan scheme could soon make it easier for first-time buyers to take their first step onto the property ladder.
The Your First Home Scheme was announced by Prime Minister Andy Burnham on 26 September 2026. While the full rules and eligibility details won’t be confirmed until the Autumn Budget on 28 October 2026, there is already plenty of interest from prospective buyers and the property industry.
Here’s what we know so far about the proposed scheme, how it could help first-time buyers and what industry experts are saying.
The Your First Home Scheme is designed to help eligible first-time buyers purchase a new-build home in England with a smaller deposit.
Under the proposals announced so far, eligible buyers could purchase a new-build property with a minimum deposit of just 2.5%. This could significantly reduce the amount buyers need to save upfront, particularly for those currently paying high rents while trying to build up a deposit.
The scheme will also include a 20% government-backed equity loan, reducing the amount buyers need to borrow through a traditional mortgage. The equity loan will initially be interest-free.
The aim is to make home ownership more achievable while potentially reducing monthly mortgage costs compared with taking out a 95% mortgage.
New-build developers will be expected to make a financial contribution when they sign up to the scheme. Importantly, only new-build homes in England sold by developers participating in the scheme will qualify.
This means buyers will need to choose a property from a housebuilder registered with the Your First Home Scheme.
At this stage, the government has confirmed that the scheme will be available to first-time buyers purchasing new-build homes. Existing properties will not be eligible.
There will also be local property price caps and household income caps. However, some important questions remain unanswered, including whether there will be an age limit and whether household income caps will be based on individual or joint incomes.
These finer details are expected to be confirmed in the Autumn Budget at the end of October.
The Home Builders Federation (HBF), alongside a number of housebuilders, has been calling for a new scheme since the former Help to Buy programme ended.
Help to Buy ran from 2013 to 2023. Initially, it allowed buyers to purchase new-build homes with a 5% deposit and a government-backed equity loan. From 2021 onwards, the scheme was restricted to first-time buyers and regional property price caps were introduced.
The scheme proved popular and helped stimulate demand for new homes, giving developers greater confidence to build.
Data from Homes England shows that returns made on Help to Buy loans amounted to £1.24 billion for the Treasury. The scheme also helped around a third of a million first-time buyer households get onto the housing ladder.
Increased demand also contributed to greater housing supply and supported thousands of jobs across the housebuilding industry.
However, since Help to Buy ended, planning permission for new-home building sites in England has fallen to levels not seen since data collection began in 2006.
The HBF has pointed to high mortgage rates and a lack of government support as contributing factors, which is why it has welcomed the proposals for the new Your First Home Scheme.
The initial response from the property and construction markets has been positive. Following news of the scheme, shares in several housebuilders rose by more than 10%, while construction companies and building materials suppliers also saw their share prices increase.
However, the scheme has also attracted criticism and there are several potential challenges to consider.
One concern is that today's higher interest rates could make the scheme less effective than Help to Buy was in the past. A smaller deposit may make it easier to purchase a property, but buyers still need to be able to afford their monthly mortgage payments.
The regional property price caps will also be important. If the caps are set too low in areas where house prices are higher, some first-time buyers could find that relatively few properties qualify.
Another criticism is that increasing demand through a government-backed equity loan could potentially push house prices higher, rather than making homes more affordable in the long term.
Housebuilders are also facing a more challenging environment than during the Help to Buy era, with higher inflation, increased costs from new building levies and requirements, and ongoing delays affecting the supply of materials.
There are still plenty of details to be confirmed before we know exactly how the Your First Home Scheme will work.
The Autumn Budget on 28 October 2026 should provide greater clarity on the eligibility requirements, household income limits, regional property price caps and other key aspects of the scheme.
Pre-registration is expected to open by the end of 2026, so there could soon be another opportunity for first-time buyers looking to purchase a new-build home.
The Your First Home Scheme won’t be the only route into home ownership. If you’ve already explored your mortgage options with an independent financial adviser and are ready to take the next step, why not explore the latest new-build homes available across the country?
Searching for your new home is quick and easy, with properties available from a wide range of housebuilders.
Start your search today and find your next home.
