Your First Home: what is the government’s new first time buyer scheme?

Your First Home is a new government scheme designed to help first-time buyers purchase a new-build home in England with a 2.5% deposit. The household earnings cap to benefit from the scheme is £110,000 per year, rising to £140,000 per year in London. The maximum property price will be based on local authority median prices, for example, up to £500,000 in outer London and £650,000 in London. Properties must be purchased from a developer that’s signed up.

The scheme was confirmed at the Autumn Budget on 28 October 2026. It isn’t open yet: pre-registration is due to open by the end of December 2026, with full applications from February 2027 and the first loans issued from April 2027. Here’s what’s been confirmed, what’s still to come, and what it could mean for you.

Author: The Setfords team | Last reviewed: 29 October 2026 | Read time: 6 minutes

Please note: This article was updated on 29 October 2026 to reflect the details confirmed at the Autumn Budget. The scheme is not yet open. We’ll review this page as any updates are announced. Most figures are from the Budget 2026 document and gov.uk. Setfords is not responsible for any inaccuracies in those figures.

Key takeaways

• Your First Home is a government equity loan for first-time buyers purchasing a new-build home in England from a developer signed up to the scheme.
• Confimed at the Autumn Budget 2026, you can buy with a deposit between 2.5% and 15%, alongisde a 20% equity loan from the government.
• The equity loan is interest-free for the first five years, with a gradual increase in the interest you pay after that: 1.5% in year 6 and 3% from year 7.
• Household income caps are £110,000 outside London and £140,000 in London.
• Property price caps will be based on local authority median prices, set at £650,000 in inner London and £500,000 in outer London.
• Pre-registration opens by the end of December 2026, with full applications from February 2027 and the first loans issued from April 2027.
• Funding is capped each year, so places on the scheme could be limited.
• The scheme doesn’t apply in Wales, but Help to Buy – Wales is open until 31 March 2027.

What is the Your First Home scheme?

Your First Home is a new first-time buyer scheme announced by the government on 26 September 2026 and confirmed at the Autumn Budget on 28 October 2026. It involves an equity loan, which means the government lends you part of the price of a new-build home. That leaves you needing a smaller deposit and a smaller mortgage.

The government has committed £4.7 billion to the scheme. It expects to help around 70,000 households in England buy their first home, and to support the delivery of around 20,000 new homes.

According to the government’s guidance, the scheme offers 20% government equity loans with deposits from 2.5%. You’ll pay no interest on the loan for the first five years. The government says this could save buyers hundreds of pounds a month compared with a standard mortgage.

The scheme is aimed at first-time buyers who wouldn’t otherwise be able to buy a home. The government hasn’t yet said how this will be assessed.

The scheme covers England only. It only applies to new-build homes bought from developers who sign up to it. Pre-registration opens by the end of December 2026. The exact date is yet to be announced.

What is an equity loan?

An equity loan is a loan secured against a share of your home’s value, rather than a fixed sum of money. When you sell or pay it back, you repay that same share of what the home is worth at the time. So, if your home’s value rises, the amount you owe rises too.

How does the Your First Home scheme work?

If your household income is under the cap, the scheme lets you buy a new-build home from a registered developer using three sources of money:

• Your deposit: between 2.5% and 15% of the price.
• A government equity loan: 20% of the price, interest-free for the first 5 years.
• A mortgage from a lender: the rest, between 65% and 77.5% of the price.

The 15% maximum means you can’t put down a larger deposit than that while using the scheme.

Here’s an illustration using round numbers.

On a £250,000 new-build home with the minimum 2.5% deposit:

• You’d put down £6,250 as your deposit.
• You’d borrow £50,000 through the scheme.
• You’d take a mortgage of £193,750 to cover the rest.

With the maximum 15% deposit on the same home:

• You’d put down £37,500 as your deposit.
• You’d borrow £50,000 through the scheme.
• You’d take a mortgage of £162,500 to cover the rest.

Bear in mind that these figures don’t cover legal fees, surveys or moving costs, so you’ll need to budget for those separately.

Figures are for illustration only. The scheme isn’t open yet, and the price cap in your area and your lender’s criteria will affect what you can buy.

Do you pay back more than you borrow?

You might, if your home rises in value. Under the previous Help to Buy scheme, you repaid the same percentage of your home’s value, not the cash sum you borrowed. The government’s Help to Buy evaluation gives the example of a 20% loan on a £100,000 home. If that home is later worth £120,000, you’d owe £24,000.

It works the other way too: if your home falls in value, you repay less. The government hasn’t yet confirmed the repayment rules for Your First Home. However, because it’s described as an equity loan, it’s likely to work in a similar way.

Will you pay interest on the equity loan?

Not for the first five years. The Budget confirmed a five-year interest-free period, with a gradual increase in interest paid after that. In year 6, you’ll pay 1.5% interest on the loan. This rises to 3% interest from year 7.

For comparison, the Help to Buy scheme was also interest-free for five years. In year 6, you paid 1.75% of the amount borrowed. That rate rose every year after.

Eligibility, caps and timing

Is Your First Home the same as Help to Buy?

IIt’s similar, but not identical. Help to Buy closed in England in 2023. Your First Home follows the same equity loan model, with some key differences.

Figures from the Budget 2026 document.

Who is eligible for the Your First Home scheme?

Based on the details confirmed so far, you’ll need to:

• be a first time buyer
• be buying a new-build home in England from a developer that has signed up to the scheme
• have a household income below the scheme’s cap (£110,000 per year outside London and £140,000 in London)
• buy a home priced below the local price cap for your area
• use the property as your main home
• be able to get a mortgage from a participating mortgage lender

Price caps will be based on median house prices in each local authority area. So far, we know that in London, the caps are £650,000 in inner London and £500,000 in outer London. Caps for other areas haven’t been published yet.

The scheme is also aimed at people who wouldn’t otherwise be able to buy, though the government hasn’t said how this will be checked. It also hasn’t confirmed whether there’s an age limit, or how joint purchases will be treated.

Can you use the scheme to buy an older or second-hand home?

No. The scheme is for new-build homes only, bought only from developers who’ve signed up to take part. If you’re buying an older home, you’ll need to look at other options, such as a standard mortgage or a 95% mortgage.

Does the scheme apply in Wales?

No. Your First Home covers England only. If you’re buying in Wales, the Welsh Government runs its own scheme, Help to Buy – Wales. It has been extended until 31 March 2027 and works on a 5% deposit with an equity loan of 20%, for new builds up to £300,000 from registered developers.

Wales also has Land Transaction Tax rather than Stamp Duty Land Tax (SDLT), so the tax rules on your purchase are different. A conveyancing solicitor can explain what applies to you.

Will there be a 40% loan in London?

No larger London loan was announced at the Budget. Under Help to Buy, buyers in London could borrow up to 40% of the price. Your First Home offers 20% equity loans across England, with higher caps in London instead: a £140,000 household income cap, and price caps of £650,000 in inner London and £500,000 in outer London.

What is the earnings cap for Your First Home?

The earnings cap is £110,000 per year for households outside London, and £140,000 per year for households in London, as confirmed at the Autumn Budget 2026.

When does Your First Home start?

Your First Home isn’t open yet, so you can’t use it to buy a home at the moment. The Budget confirmed this timeline, with no exact dates yet:

• Pre-registration: by the end of December 2026
• Full applications: from February 2027
• First loans issued: from April 2027

Homes England will run the scheme at first, with the National Housing Bank expected to take it over in the medium term. The government will need to pass legislation for that handover.

Funding for the scheme is capped each year, although the government says it will work with developers and lenders to monitor demand.

What’s confirmed and what isn’t yet?

The Budget confirmed most of the scheme’s key details, but the full rules haven’t been published yet. Here’s where things stand:

• Confirmed: the scheme name, England only, first-time buyers only, new builds from participating developers, a 20% equity loan, a deposit of between 2.5% and 15%, the income caps, price caps based on local median prices (including the London caps), a five-year interest-free period rising to 1.5% in year 6 and 3% from year 7, and the rough timeline for pre-registration, applications and first loans.
• Still to be confirmed: price caps outside London, repayment rules, how eligibility will be assessed, age limits, joint purchases, Lifetime ISA and stamp duty treatment, how interest will be collected, and which developers are taking part.

Can you still get first-time buyer stamp duty (SDLT) relief?

Nothing announced for Your First Home changes first time buyer stamp duty relief. In England, first-time buyers pay no SDLT on the first £300,000 of a home’s price. You pay 5% on the portion from £300,001 to £500,000. If the price is over £500,000, you can’t claim the relief and must pay stamp duty at the regular rate.

Under Help to Buy, SDLT was worked out on the full purchase price, not just your share. It will likely be the same for the Your First Home scheme, but this hasn’t been confirmed.

Can you use a Lifetime ISA with Your First Home?

This hasn’t been confirmed yet. You can currently use a Lifetime ISA towards a first home costing £450,000 or less, and buyers could use one alongside the previous Help to Buy scheme. If you’re saving into a Lifetime ISA, keep an eye out for the full scheme rules.

How does it compare with a 95% mortgage?

Your First Home and 95% mortgages are not the same thing. A 95% mortgage means borrowing 95% of the price from a lender, with a 5% deposit. The availability of these mortgages is supported by the government’s Mortgage Guarantee Scheme, which is currently live and can be used on both new and older homes.

With Your First Home, your deposit could be smaller, and thanks to the equity loan, your mortgage would cover between 65% and 77.5% of the price. That could mean lower monthly payments, but you’d also owe a share of your home’s value to the government. Which suits you better depends on the home you want and your finances. A mortgage adviser can help you compare the two.

I’m not a first time buyer, can I use the scheme?

No. Your First Home will be for first-time buyers only, so you can’t use it if you’re selling one home and buying another. The Mortgage Guarantee Scheme, helping increase the number of 91-95% mortgages available, remains open to home movers who want a smaller deposit.

Can you be a first-time buyer again?

Generally not. For schemes like Help to Buy, and for stamp duty relief, you couldn’t count as a first-time buyer if you’d ever owned a home, anywhere in the world. That included homes you’d inherited or owned jointly. The government hasn’t published the definition for Your First Home, but a similar rule is likely.

What does the scheme mean if you’re selling your home?

If you’re selling a starter home, you may face more competition from new builds once the scheme opens in 2027. Buyers using Your First Home can only purchase new builds, so they won’t be able to use it to buy your home.

Will the new scheme affect house prices?

The scheme is designed to help stimulate the housing market and make getting on the property ladder more affordable for more people.

Some critics have suggested Your First Home will push up the price of new build homes, especially if developers pass on the cost of joining the scheme. The Budget confirmed developers will pay a contribution when they sign up, on a sliding scale designed to protect smaller developments. Price caps based on local median prices are also intended to keep support targeted. The real effect on prices won’t be clear until the scheme is running.

Looking at the previous Help to Buy scheme, the government’s own evaluation found that it was likely to have increased prices slightly. In England, the evaluation found that new builds sold for around 5% higher than similar older homes, while those bought with Help to Buy sold for around 6% higher. So, the scheme added an increase of around 1% on top.

What this could mean for you

If you’re buying with the scheme, compare the price with similar homes nearby, including older ones. Bear in mind you won’t be able to use the scheme to purchase these, so you will need a larger deposit.

If you’re selling a starter home, remember that scheme buyers can only purchase new builds. You may find yourself competing with nearby developments, so pricing realistically against them can help.

If you buy with the scheme and sell later, bear in mind that the new-build premium can fade once a home becomes second-hand. Your buyer also won’t be able to use the scheme to buy it from you.

What if you already have a Help to Buy equity loan?

Nothing changes for you. Your existing loan stays on its original terms, including its interest and repayment rules. Because you already own a home, you won’t be able to use Your First Home for your next purchase.

If you’re planning to remortgage or pay off your Help to Buy loan, you’ll still need an approved valuation and the loan administrator’s consent. Your conveyancer handles the paperwork to remove the government’s charge when you sell.

Conveyancing, common mistakes and FAQs

What will your conveyancer need to do?

The exact process for Your First Home hasn’t been published yet, and the scheme is not yet open. However, based on how Help to Buy worked, you can expect these stages. These stages are indicative only.

• Eligibility check. After you reserve a home, the developer and a government agent check that you and the property qualify. If you do, you’ll receive an authority to proceed, which usually has a deadline.
• Legal checks and documents. Your conveyancer explains the equity loan terms and helps you sign the loan documents. They also confirm the price, mortgage and deposit match what was approved.
• Authority to exchange. The agent confirms the funding is in place before contracts are exchanged. Exchange is when your purchase becomes legally binding.
• Completion and registration. On completion, your lender and the government both register a charge against your home at HM Land Registry. A charge is a legal record that the loan is secured on the property.

New-build purchases often come with tight deadlines from the developer. Instructing a solicitor early gives you the best chance of keeping to them.

When to speak to a solicitor

If you’re thinking about using the Your First Home scheme, it helps to speak to a conveyancing solicitor before you reserve a property. They can explain the loan terms in plain English and flag anything unusual in the contract. They’ll also keep your purchase moving against the developer’s deadlines.

A solicitor can help you:

• Understand what you’ll owe on the equity loan, and when
• Check the developer’s contract and reservation terms
• Work out your stamp duty position
• Handle the scheme paperwork and deadlines
• Plan ahead for selling or remortgaging later

Frequently asked questions

Can I register for Your First Home now? Is the scheme live?

You can’t register for Your First Home yet. Pre-registration opens by the end of December 2026, with full applications from February 2027. The government hasn’t yet said where you’ll register, but Homes England will run the scheme at first.

How much deposit do I need for Your First Home?

You’ll need a deposit of at least 2.5% of the price, and no more than 15%. The government lends you 20% through the equity loan, and a mortgage covers the rest.

How long is Your First Home interest free for?

The equity loan is interest-free for five years. After that, the rate of interest you’ll pay on the loan gradually increases. In year 6, you’ll pay 1.5% interest, rising to 3% interest from year 7.

Is there an age limit for the Your First Home scheme?

The government hasn’t confirmed whether there’s an age limit. We’ll update this article once the scheme rules are published.

Can I buy with someone who has owned a home before?

This hasn’t been confirmed. Under Help to Buy, everyone buying the home had to be a first-time buyer (someone who hasn’t owned a property anywhere in the world before, including inherited property and only owning a share). A similar rule is likely to apply to Your First Home.

Will developers put their prices up because of the scheme?

Some industry commentators have raised this concern. Developers will also pay a contribution to join the scheme. The government’s evaluation of Help to Buy found it likely pushed prices up slightly. Comparing prices on similar homes nearby can help you judge value.

Can I combine Your First Home with shared ownership or the First Homes scheme?

This hasn’t been confirmed. The previous Help to Buy scheme couldn’t be combined with shared ownership. We’ll update this article once the full scheme rules are published.

What other help for first time buyers was announced at the Autumn Budget?

The main other change is a new First Time Buyer ISA, which will replace the Lifetime ISA for new savers from April 2029. Based on the Budget announcement:

• You’ll be able to pay in up to £4,000 a year and get a 25% government bonus, up to a maximum bonus of £20,000.
• The bonus can be used towards a first home costing up to £450,000, the same price cap as the Lifetime ISA.
• Unlike the Lifetime ISA, there’s no upper age limit.
• Existing Lifetime ISAs will carry on under their current terms, but you won’t be able to transfer a Lifetime ISA into the new account.

There’s also an immediate change for Lifetime ISA savers. From 29 October 2026, if you use your Lifetime ISA to buy a first home costing more than £450,000, the withdrawal charge falls from 25% to 20%. That means you should get back at least what you paid in, although you won’t keep the government bonus.

The Budget didn’t change stamp duty, so first-time buyer relief stays as it is.

This article is general information about the Autumn Budget 2026 and property and is not legal or tax advice. The law and timescales can change, and every situation is different, so please speak to a qualified conveyancing solicitor, and a tax adviser where relevant, about your circumstances. Most figures in this article are from the Budget 2026 document and gov.uk. Setfords is not responsible for any inaccuracies in those figures.