Your First Home: What England’s proposed buyer scheme offers and what remains unclear

Your First Home, a proposed government-backed equity-loan scheme in England, could let eligible first-time buyers purchase a new-build home with a deposit of 2.5% and an equity loan worth 20% of the price. The government announced the plan on 26 September and says it will confirm the scheme at next month’s Budget. The eligibility limits and full loan terms have yet to be published.

The proposal is aimed at people who have an income but struggle to save a deposit or cannot draw on family help. In an interview with the Guardian, Prime Minister Andy Burnham said it was intended particularly for buyers who cannot rely on the ‘bank of mum and dad’. The plan also seeks to give developers confidence to build, he said.

What has been announced

The government says the scheme is expected to cover first-time buyers purchasing a new-build property from a developer that signs up. A buyer putting down the minimum 2.5% deposit would receive a government-backed equity loan for 20% of the purchase price, leaving the remaining 77.5% to be financed through a mortgage. The announcement applies to England.

The equity loan would have an initial interest-free period. The government says participants could save hundreds of pounds a month compared with taking out a 95% mortgage, but that is its estimate, not a quoted saving for every buyer. It has not said how long the interest-free period would last or what charges would apply afterward.

When could buyers apply?

The government says the Budget will provide further details, including the scheme’s cost and implementation timetable. The Guardian reported that officials expected registration to open by the end of 2026. That reported registration target is distinct from a confirmed start date for purchases, which has not been announced.

Developers that join will be expected to contribute toward the scheme’s costs, according to the government. The Guardian reported that funding would come from reprioritising existing budgets, while saying it was unclear whether that would draw on money already earmarked for housebuilding or require cuts elsewhere. The government has not published a total cost.

What the earlier scheme can tell us

Your First Home follows the earlier Help to Buy equity-loan programme, which operated in England from 2013 to 2023. An independent evaluation commissioned by the housing ministry examined that programme and recorded more than 387,000 purchases, including 328,000 by first-time buyers. The predecessor also used equity loans for new-build homes, though its eligibility and loan terms changed over its lifetime.

The evaluation estimates that Help to Buy caused about 15% of the new-build homes completed in England during 2013–23 to be built. That is an estimate of the programme’s effect on construction over a decade, under the conditions then prevailing. The evaluators say Help to Buy initially stimulated demand in a depressed market and increased developer confidence and housing supply.

Whether the assistance reached people who otherwise could not buy was more mixed. In the evaluation’s customer survey, 46% said they could not have bought a home without Help to Buy. The other 54% said they could have bought without it, although some used the scheme to obtain a different or better property. The evaluators also found that effects on home ownership differed between areas, with little effect in places that were already relatively unaffordable and where prices rose most.

The study found positive effects on developers’ revenue, pre-tax profit and profit margins, with the strongest evidence for small and medium-sized developers. It estimated house prices near the England–Wales border were around 2% higher than they would otherwise have been; price effects varied elsewhere, and the effect around London was unclear. Those findings describe Help to Buy, not an established outcome for Your First Home.

The questions the Budget must settle

Burnham rejected the suggestion that increasing buyer demand would simply raise prices, telling the Guardian that the government was also working to increase housing supply. The earlier evaluation shows why both access and market effects matter, but it cautions that economic and housing conditions now differ from those at Help to Buy’s launch. It cannot predict how the proposed scheme will affect prices or construction.

The Guardian reported that Help to Buy’s equity loan was interest-free for five years and that subsequent charges rose annually by consumer price inflation plus 2%. No equivalent schedule has been announced for Your First Home. Before buyers can assess its long-term cost, they will need the duration of the interest-free period, the later charges, repayment rules and the income and property-price caps. Those details, along with the implementation timetable, are due to be clarified at the Budget.