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

Your First Home is a new government first-time buyer scheme that’s expected to help buyers purchase a new-build home in England with a 2.5% deposit. The full details will be confirmed at the Autumn Budget on 28 October 2026. Here’s what we know so far, what’s still to come, and what it means for you, whether you’re a first time buyer or home mover.

Author: The Setfords team | Last reviewed: 28th September 2026 | Read time: 13 minutes

Please note: This article reflects the scheme as announced by the government on 26 September 2026. Key details, including price caps, income caps and the length of the interest-free period, will be set out at the Budget. We’ll update this page once they’re published.

Key takeaways

• Your First Home is a government equity loan for first-time buyers purchasing a new-build home in England.
• It’s expected to work with a 2.5% deposit and a 20% equity loan with no interest for an initial period.
• Only new builds from developers signed up to the scheme will qualify, within local price caps and a household income cap also expected.
• The caps, the interest-free period and the launch date will be confirmed by Chancellor, John Healey, at the Autumn Budget on 28 October 2026.
• 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. It’s 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.

According to the government’s announcement, the scheme is expected to support 2.5% deposits, backed by 20% government equity loans. You’ll have an initial period where you pay no interest on the loan. The government says this could save first time buyers hundreds of pounds a month compared with a 95% mortgage.

The scheme covers England only. It applies to new-build homes bought from developers who sign up to it. Pre-registration is expected to open by the end of 2026, with the full rules confirmed at the Autumn Budget.

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?

Based on what’s been announced, it’s expected that the scheme enables you to buy a new-build home using three sources of money:

• Your deposit: at least 2.5% of the price.
• A government equity loan: 20% of the price.
• A mortgage from a lender: the remaining 77.5%.

Here’s an illustration using round numbers.

On a £250,000 new-build home:

• 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.

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

This example assumes the scheme works as announced. The figures are for illustration only.

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 at first. The government has confirmed there will be an initial interest-free period, but it hasn’t said how long that period lasts or what you’ll pay afterwards.

For comparison, Help to Buy was interest-free for five years. In year six, you paid 1.75% of the amount borrowed. That rate rose every year after. Some press reports have suggested Your First Home will also be interest-free for five years. However, that hasn’t been confirmed by the government yet.

Is Your First Home the same as Help to Buy?

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

Who is eligible for the Your First Home scheme?

Based on the announcement, you’ll need to:

• be a first time buyer
• be buying a new-build home in England
• buy from a developer that has signed up to the scheme
• have a household income below the scheme’s cap
• buy a home priced below the local price cap for your area

The income cap and price caps will be set at the Autumn Budget. The government hasn’t yet 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 taking 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?

That hasn’t been confirmed. Under Help to Buy, buyers in London could borrow up to 40% of the price. So far, the government has only mentioned a 20% loan for Your First Home, with local price caps. Whether London gets a larger loan should become clear at the Autumn Budget.

When does Your First Home start?

The government expects to open pre-registration by the end of 2026. The Chancellor will set out the costs and timeline in the Budget on 28 October 2026. No date has yet been given for when you’ll be able to complete a purchase using the scheme.

What’s confirmed and what isn’t yet?

• Confirmed: the scheme name, England only, first-time buyers only, new builds from participating developers, an income cap, local price caps, an initial interest-free period, and pre-registration by the end of 2026.
• Still to be confirmed: the cap levels, the length of the interest-free period, interest and fees afterwards, repayment rules, age limits, and the launch date.

Thinking about buying your first home?

Understand your options and your timeline. Talk to a Setfords solicitor when you’re ready.

Get a fixed-fee conveyancing quote

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

Nothing announced so far 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 on the Autumn Budget announcement for the rules.

How does it compare with a 95% mortgage?

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 you can use on both new and existing homes.

With Your First Home, your deposit would be smaller, but thanks to the equity loan, your mortgage would cover around 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.

Can home movers use the scheme?

No. Your First Home is 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. Buyers using Your First Home can only purchase new builds, so they won’t be able to use it to buy your home.

The government’s own evaluation found Help to Buy is likely to have pushed up prices slightly, across all homes and not only new builds. The effect was larger in areas that were already expensive.

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. However, the real effect will depend on the price caps, income cap and developer contribution confirmed at the Autumn Budget, though it’s unlikely to have a drastic impact on property prices.

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.

What will your conveyancer need to do?

The exact process for Your First Home hasn’t been published yet. 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.

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

Common mistakes to avoid

• Assuming you’ll repay what you borrowed. You’re likely to repay a share of your home’s future value. Check the repayment terms before you commit.
• Relying on press figures. Numbers like a £600,000 price cap haven’t been confirmed. Wait for the official rules after the Autumn Budget.
• Forgetting the other costs. The deposit and equity loan don’t cover legal fees, surveys or moving costs. Make sure you budget for these from the start.
• Leaving your solicitor until late. Developer and scheme deadlines can be short. Consider lining up a conveyancing solicitor before you reserve.
• Overlooking the costs after the interest-free period. Ask what you’ll pay once that period ends, so you can plan ahead.

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?

Not yet. The government expects pre-registration to open by the end of 2026. Full details, including how to apply, should become clear at the Autumn Budget on 28 October 2026.

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. 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. The rules for Your First Home should become clear after the Budget.