Your First Home scheme: what first-time buyers need to know
The government has announced plans for an equity loan scheme in England with a proposed 2.5% deposit. Here is what has been announced and what buyers still need to wait for.
A new route to a first home is proposed
The full scheme is due to be confirmed at the October Budget.
On 26 September 2026, the government announced plans for Your First Home, an equity loan scheme intended to help first-time buyers purchase a new-build home in England. It expects the scheme to support a 2.5% deposit alongside a 20% government-backed equity loan.
This is a proposal, not an open application scheme. The government says eligibility limits, costs and the implementation timetable will be set out at the Budget. If you are looking in Croydon, Mitcham, Sutton or Carshalton, those missing details will matter when deciding whether a particular home and household qualify.
Three figures and conditions to watch
These are the elements described in the government announcement, subject to final rules.
2.5% deposit
The scheme is expected to support buyers with a deposit of 2.5% of the purchase price. Buyers will still need to budget for other purchasing and moving costs.
20% equity loan
A government-backed equity loan is proposed, with an initial interest-free period. Its repayment terms and later costs have not yet been published.
Eligible new builds
The property would need to be a new-build home bought from a developer signed up to the scheme. Household income and local property price caps are also planned.
Look beyond the smaller deposit
An equity loan must be repaid under its terms. Before using the scheme, buyers will need to understand when repayments become due, what happens after the interest-free period and how the equity loan affects the cost of selling or moving. Those terms have not yet been announced.
A lower upfront deposit also does not guarantee an affordable monthly payment or a mortgage offer. Your income, spending, credit history, lender criteria and the property's costs will all influence what you can borrow and manage comfortably.
Allow for mortgage payments, legal and survey costs, insurance, moving expenses and any applicable new-build service charges or estate fees.
How South London first-time buyers can prepare
You can strengthen your buying plan while the final scheme details are pending.
Set a monthly budget
Work out a payment you could maintain alongside bills and other commitments. A lender's maximum borrowing figure is not a personal spending target.
Get your paperwork ready
Review your credit record and gather evidence of income, savings and deposit source. Keep funds aside for fees and moving costs.
Compare suitable homes
Research new-build developments and locations, while remembering that developers must sign up and the local price caps are still unknown.
Your First Home scheme FAQs
Is the Your First Home scheme available now?
No application or launch date was announced on 26 September 2026. The government says further details and the implementation timetable will be announced at the October Budget.
Can I use it to buy an existing home?
The announced proposal is for a new-build property from a developer signed up to the scheme. It does not describe purchases of existing homes.
Who will qualify for the 2.5% deposit scheme?
It is intended for first-time buyers. The government plans a household income cap and local property price caps, but has not yet published the figures or full eligibility rules.
Is the 20% equity loan free?
The proposed loan would have an initial interest-free period. Its full costs, repayment terms and the length of that period are still to be announced.
Will every new-build development take part?
No. The announcement refers to homes from developers signed up to the scheme. Participation should be checked once the scheme details and developer arrangements are confirmed.
Talk through your first-home options
Planning to buy in South London? Discuss your deposit, monthly budget and current mortgage options with Gordon Blair Financial Services while the government finalises Your First Home.