The Your First Home scheme is a new government equity loan scheme for first-time buyers in England. It is expected to let buyers purchase a new-build home with a 2.5% deposit, backed by a 20% government equity loan that is interest-free for an initial period. The scheme was announced on 26 September 2026 and full details will be confirmed at the Budget on 28 October 2026.
If you have been saving for years and still feel the deposit is out of reach, this is the most significant first-time buyer announcement since Help to Buy closed. Below, our conveyancing solicitors explain what has been confirmed, what is still unknown, how the numbers work, and the legal points to check before you reserve a new-build home.
Key facts at a glance
- Who: First-time buyers in England
- What: 2.5% deposit + 20% government-backed equity loan + mortgage for the rest
- Which homes: New builds from developers signed up to the scheme
- Cost of the loan: Interest-free for an initial period
- Limits: A household income cap and local property price caps
- When: Full rules at the Budget on 28 October 2026
What is the Your First Home scheme?
Your First Home is an equity loan scheme that reduces the deposit a first-time buyer needs for a new-build home to 2.5% of the price. The government lends up to 20% of the purchase price as an equity loan, and the buyer funds the remaining 77.5% with a standard repayment mortgage.
The scheme was confirmed by the Ministry of Housing, Communities and Local Government in its official announcement of the new first-time buyer scheme on 26 September 2026, published on the eve of the Labour Party conference in Liverpool. Prime Minister Andy Burnham presented it as support for young people who cannot rely on family money for a deposit – the so-called “bank of mum and dad”.
The government’s stated aims are to:
- tackle the deposit barrier for first-time buyers who could not otherwise afford a home
- make monthly costs lower than a 95% mortgage, with the government saying users could save hundreds of pounds a month
- stimulate the new-build market and boost housing supply at a time of rising construction costs
How does the Your First Home scheme work?
You pay a 2.5% deposit, the government lends 20% as an equity loan, and a mortgage lender provides the remaining 77.5%. Because the equity loan is interest-free at the start, your monthly outgoings are based mainly on a 77.5% mortgage rather than a 95% one.
Worked example: a £230,000 new-build home
| Funding | Share | Amount |
|---|---|---|
| Your deposit | 2.5% | £5,750 |
| Government equity loan | 20% | £46,000 |
| Mortgage | 77.5% | £178,250 |
| Total | 100% | £230,000 |
Compare this with a standard 95% mortgage on the same home: you would need £11,500 as a deposit and borrow £218,500 – over £40,000 more mortgage debt accruing interest from day one.
Worked example: a £450,000 new-build flat in London
| Funding | Share | Amount |
|---|---|---|
| Your deposit | 2.5% | £11,250 |
| Government equity loan | 20% | £90,000 |
| Mortgage | 77.5% | £348,750 |
| Total | 100% | £450,000 |
This London example is illustrative only. Local property price caps will apply, and they have not yet been published, so a £450,000 home may or may not qualify in your borough.
Who is eligible for the Your First Home scheme?
Based on the government’s announcement, you are likely to be eligible if you are a first-time buyer, your household income is under the scheme’s cap, and you buy a new-build home within the local price cap from a participating developer in England.
Confirmed so far by GOV.UK:
- First-time buyers only
- England only – Scotland, Wales and Northern Ireland are not covered
- New-build homes only, bought from a developer signed up to the scheme
- Household income cap – figure to be set at the Budget
- Local property price caps – figures to be set at the Budget
Still to be confirmed at the Budget:
- the exact income and price cap figures, and whether London has higher limits
- the length of the interest-free period and the fees charged afterwards
- how and when the loan must be repaid
- whether there is a cap on applicants’ savings, and how gifted deposits are treated
- any age limit, residency or immigration-status requirements
- the application process and opening date
Tip: Some reports have quoted specific figures for price caps, interest-free periods and repayment terms. These have not been confirmed by government. Do not commit to a reservation on the strength of unconfirmed numbers.
Your First Home vs Help to Buy: what’s different?
Your First Home is widely described as a successor to Help to Buy, but it asks for half the deposit (2.5% rather than 5%) and is targeted more tightly through income and local price caps.
| Feature | Your First Home (2026) | Help to Buy: Equity Loan (2013–2023) |
|---|---|---|
| Minimum deposit | 2.5% | 5% |
| Equity loan | 20% | 20% (up to 40% in London) |
| Property type | New build only | New build only |
| Buyers | First-time buyers | First-time buyers (from 2021) |
| Income cap | Yes – to be confirmed | No |
| Price caps | Local caps – to be confirmed | Regional caps |
| Developer contribution | Yes – developers pay to join | No equivalent |
| Status | Announced; rules due 28 October 2026 | Closed |
How does it compare with other first-time buyer schemes?
Your First Home sits alongside – not instead of – the existing government home ownership schemes, and in some cases you will need to choose between them.
| Scheme | Minimum deposit | How it helps | Best suited to |
|---|---|---|---|
| Your First Home | 2.5% | 20% equity loan, initially interest-free | Buyers of modest new builds with steady income but small savings |
| First Homes scheme | Typically 5% of discounted price | 30%–50% discount on market value, kept on resale | Local first-time buyers earning up to £80,000 (£90,000 in London) |
| Mortgage Guarantee Scheme | 5% | Government guarantee encourages lenders to offer 91%–95% mortgages | Buyers of new or existing homes |
| Shared ownership | 5%–10% of your share | Buy a share of the home and pay rent on the rest | Buyers who cannot afford a full mortgage |
You can compare all current options on the government’s affordable home ownership schemes page. If shared ownership looks like the better fit, our shared ownership purchase solicitors can guide you through the lease.
Stamp Duty for first-time buyers using the scheme
First-time buyers in England pay no Stamp Duty Land Tax on homes up to £300,000, and 5% on the portion between £300,001 and £500,000. Above £500,000, first-time buyer relief is lost entirely. These are the current first-time buyer Stamp Duty rates on GOV.UK.
Using the examples above:
- £230,000 home: £0 Stamp Duty
- £450,000 London flat: £7,500 Stamp Duty (5% of £150,000)
You can check your own figure with HMRC’s Stamp Duty calculator. Remember to budget for Stamp Duty, legal fees and moving costs on top of your 2.5% deposit.
Legal risks to check before you buy with an equity loan
An equity loan is not free money – it is a secured debt linked to your home’s value, and new-build purchases carry their own legal risks. These are the issues our conveyancing solicitors check on every new-build and equity loan purchase.
1. The loan usually tracks the property’s value
Under equity loan models, you repay a percentage of the home’s value at the time of repayment, not the cash amount you borrowed. If your home rises in value, you repay more. The Your First Home repayment rules are due at the Budget – read them carefully.
2. Costs after the interest-free period
The loan is interest-free only for an initial period. Plan now for the fees or interest that will follow, and factor them into your long-term budget.
3. The loan is secured on your home
Equity loans are normally registered as a charge on your property alongside your mortgage. This can restrict letting, remortgaging, extending or selling without consent. Your solicitor should explain every restriction before you exchange contracts.
4. New-build contract pitfalls
Developer contracts often include non-refundable reservation fees, long-stop completion dates, and the right to vary the specification. Check the build warranty, estate management charges and – for flats – the lease, ground rent and service charges.
5. Deposits from family and joint buyers
The scheme is aimed at buyers without large family gifts, and reports suggest savings limits may apply. If anyone is contributing to your deposit, your lender and the scheme may need a gifted deposit declaration. Where a guarantor or contributor needs separate advice, we provide independent legal advice for property transactions. Joint buyers should also consider a declaration of trust recording who paid what.
6. Immigration status
The government has not yet said whether residency or immigration requirements will apply. If you hold time-limited leave in the UK, speak to our immigration solicitors as well as your mortgage adviser before you commit.
How to prepare for the Your First Home scheme now
You cannot apply yet, but you can get ready so you are first in line when the scheme opens.
- Save into a Lifetime ISA – the government adds a 25% bonus of up to £1,000 a year on savings of up to £4,000, and it can be used towards a first home. See the Lifetime ISA rules on GOV.UK.
- Check your credit file and clear any errors or small debts.
- Get a mortgage agreement in principle for around 77.5% of your target price.
- Research developers and ask whether they plan to join Your First Home.
- Instruct a CQS-accredited conveyancing solicitor early so your purchase is not delayed by the paperwork. See how long conveyancing takes.
- Watch the Budget on 28 October 2026 – we will update this guide as soon as the rules are published.
How Adam Bernard Solicitors can help
Adam Bernard Solicitors is an SRA-regulated law firm accredited under the Law Society’s Conveyancing Quality Scheme (CQS), acting for first-time buyers across London from offices in High Holborn and Upton Park.
Our conveyancing solicitors in London handle new-build and equity loan purchases from reservation to registration with HM Land Registry. We will:
- review the developer’s contract, warranty and any lease
- explain the equity loan terms and restrictions in plain English
- liaise with your mortgage lender and the scheme administrator
- manage exchange, completion and your Stamp Duty return
See our property purchase service and fixed conveyancing fees, or book a free consultation. Call 0207 100 2525 – available 24/7, with free video consultations by Zoom, Teams, WhatsApp or Skype.
Frequently asked questions
What is the Your First Home scheme?
Your First Home is a government equity loan scheme for first-time buyers in England. It is expected to allow a 2.5% deposit on a new-build home, backed by a 20% government equity loan with an initial interest-free period.
When does the Your First Home scheme start?
Full details, including costs and implementation timelines, will be announced at the Budget on 28 October 2026. The government has not yet confirmed an opening date for applications.
Can I use the Your First Home scheme to buy an existing home?
No. Based on the government announcement, the scheme only applies to new-build homes bought from developers signed up to it.
Is the Your First Home scheme available in London?
Yes, the scheme covers England, including London. Local property price caps will apply, and the London figures will be confirmed at the Budget.
Is Your First Home the same as Help to Buy?
It is similar but not the same. Your First Home requires a 2.5% deposit rather than 5%, adds a household income cap and local price caps, and requires developers to contribute to the scheme’s costs.
Do I pay Stamp Duty with the Your First Home scheme?
First-time buyer relief still applies. You pay no Stamp Duty on homes up to £300,000 and 5% on the portion from £300,001 to £500,000. There is no relief above £500,000.
Do I have to repay the equity loan?
Yes. An equity loan must be repaid, usually when you sell or remortgage, or at the end of the loan term. The exact Your First Home repayment rules will be set out at the Budget.
Do I need a solicitor for an equity loan purchase?
Yes, in practice. Your lender and the scheme will require a conveyancer to handle the legal transfer, register the loan charge and confirm the scheme conditions are met.
This article is for informational purposes only and does not constitute legal or financial advice. Scheme details are based on the government announcement of 26 September 2026 and may change at the Budget.
