In an announcement issued on Saturday 26 September 2026, the government said a new first-time buyer scheme called Your First Home will be confirmed at next month’s Budget in England. The stated aim is to help more households into home ownership at a point when deposit requirements remain the main obstacle for many would-be buyers. The release is notable for what it does and does not say. Ministers have set out the broad structure of the proposed support, but the main operating rules, costings and delivery timetable have been held back for the Budget itself.
According to the government announcement, the scheme is expected to allow eligible first-time buyers to purchase a new-build home with a 2.5% deposit, supported by a 20% government-backed equity loan, provided the developer has signed up to the programme. That arrangement would reduce the size of the conventional mortgage needed at the point of purchase. The government also said the equity loan will have an initial interest-free period and that this could save buyers hundreds of pounds each month when compared with a 95% mortgage. The announcement does not yet set out the length of that interest-free period, any later charging structure or the detailed repayment terms.
In plain terms, an equity loan sits alongside a mortgage rather than replacing it. On the outline released by the government, the buyer would bring a small cash deposit, borrow part of the purchase price through a standard mortgage and use the state-backed loan to bridge the remaining gap. That can lower monthly mortgage costs at the start because the mortgage itself is smaller than it would be under a very high loan-to-value product alone. The trade-off is that the buyer is taking on a second layer of support whose full conditions will not be known until the Budget documents are published.
The targeting is narrower than a broad market-wide home ownership offer. Eligibility will be limited to first-time buyers purchasing a new-build property in England, with participation also restricted to developers that choose to join the scheme. Ministers have further said there will be a household income cap and local property price caps, with the detailed thresholds due at the Budget. That point matters because the reach of the policy will depend not only on the headline 2.5% deposit but also on where those caps are set in higher- and lower-cost areas.
The government has framed the policy in two ways: as support for buyers and as support for the new-build market. The announcement says the measure is intended to help households who would otherwise be unable to afford a first home, while also responding to headwinds in housebuilding linked to international economic pressure and rising construction costs. In policy terms, the scheme is therefore being presented not only as a route into ownership but also as a demand-side measure that could support housing supply by improving sales conditions for developers. The scale of that effect will depend on the final size of the scheme and how quickly it can be implemented.
One of the few cost-control signals in the release is the statement that developers will be expected to make a contribution when signing up. That suggests the Treasury is seeking some sharing of financial risk rather than placing the full cost of the intervention on the public balance sheet. Even so, the government has not yet published the total fiscal cost, the expected number of households to be supported or the point at which applications would open. The release states that further details, including costs and implementation timelines, will be announced by the Chancellor at next month’s Budget.
For first-time buyers, the scheme could widen access for households with enough income to meet monthly payments but too little savings for a standard deposit. For housebuilders, a targeted equity loan model may help convert demand in a segment of the market where financing conditions have become tighter. The Budget will therefore need to do more than confirm the scheme’s name. It will need to set out the income cap, local price caps, developer terms, repayment rules, costings and start date before a clear judgement can be made on how far Your First Home changes access to ownership in England.