NEWS·SEPTEMBER 2026
The government has announced plans for a new equity loan scheme designed to help first-time buyers purchase new-build homes in England with a deposit of 2.5%.
Called Your First Home, the scheme is expected to provide a government-backed equity loan worth 20% of an eligible property's value. A mortgage would fund the remaining balance, with an initial interest-free period applying to the equity loan.
Full costs, eligibility thresholds and implementation dates have not yet been confirmed. These details are due to be set out at the Budget in October.
The announcement is significant for both buyers and the housebuilding sector. Raising a deposit remains one of the largest barriers to home ownership, particularly for households without family support. Reducing the required cash contribution to 2.5% could bring a new group of purchasers into the market.
The scheme will apply to new homes sold by participating developers. Household income limits and local property price caps are expected to focus support on those considered most in need. Developers will also be required to contribute towards the cost of participation.
For housebuilders, this is a direct demand-side intervention at a time when sales rates, borrowing costs and construction inflation continue to affect delivery. A larger pool of eligible purchasers could support reservations and improve confidence around development programmes.
The previous Help to Buy programme demonstrated that equity support can stimulate new-build demand, but it also raised questions about value, pricing and the long-term position of purchasers holding an equity loan.
The design of Your First Home will therefore matter as much as its headline terms. Local price caps will influence where the scheme has the greatest impact, while income limits will determine the depth of the buyer pool. The length of the interest-free period, repayment structure and treatment of future property value changes will also be central to affordability.
From a development perspective, the scheme could strengthen sales assumptions on suitable projects, but it should not be treated as a substitute for sound fundamentals. Location, specification, pricing and mortgage availability will remain decisive.
Your First Home has the potential to support housing delivery by addressing a genuine constraint on first-time buyer demand. The proposed 2.5% deposit is a material intervention, particularly where mortgage affordability is otherwise achievable but the initial deposit is not.
The market should, however, wait for the Budget detail before assessing the full effect on viability and land values. A well-targeted scheme could help unlock sales and improve delivery confidence. Its success will depend on careful eligibility rules, lender participation and a structure that remains fair to buyers over the full period of ownership.
Sources: UK Government announcement and Reuters reporting.
NEWS·SEPTEMBER 2026
The government has announced plans for a new equity loan scheme designed to help first-time buyers purchase new-build homes in England with a deposit of 2.5%.
Called Your First Home, the scheme is expected to provide a government-backed equity loan worth 20% of an eligible property's value. A mortgage would fund the remaining balance, with an initial interest-free period applying to the equity loan.
Full costs, eligibility thresholds and implementation dates have not yet been confirmed. These details are due to be set out at the Budget in October.
The announcement is significant for both buyers and the housebuilding sector. Raising a deposit remains one of the largest barriers to home ownership, particularly for households without family support. Reducing the required cash contribution to 2.5% could bring a new group of purchasers into the market.
The scheme will apply to new homes sold by participating developers. Household income limits and local property price caps are expected to focus support on those considered most in need. Developers will also be required to contribute towards the cost of participation.
For housebuilders, this is a direct demand-side intervention at a time when sales rates, borrowing costs and construction inflation continue to affect delivery. A larger pool of eligible purchasers could support reservations and improve confidence around development programmes.
The previous Help to Buy programme demonstrated that equity support can stimulate new-build demand, but it also raised questions about value, pricing and the long-term position of purchasers holding an equity loan.
The design of Your First Home will therefore matter as much as its headline terms. Local price caps will influence where the scheme has the greatest impact, while income limits will determine the depth of the buyer pool. The length of the interest-free period, repayment structure and treatment of future property value changes will also be central to affordability.
From a development perspective, the scheme could strengthen sales assumptions on suitable projects, but it should not be treated as a substitute for sound fundamentals. Location, specification, pricing and mortgage availability will remain decisive.
Your First Home has the potential to support housing delivery by addressing a genuine constraint on first-time buyer demand. The proposed 2.5% deposit is a material intervention, particularly where mortgage affordability is otherwise achievable but the initial deposit is not.
The market should, however, wait for the Budget detail before assessing the full effect on viability and land values. A well-targeted scheme could help unlock sales and improve delivery confidence. Its success will depend on careful eligibility rules, lender participation and a structure that remains fair to buyers over the full period of ownership.
Sources: UK Government announcement and Reuters reporting.