New first-time buyer scheme Your First Home to be unveiled next month

The Ministry of Housing, Communities and Local Government announced on 26 September 2026 that a new equity loan scheme, Your First Home, will be confirmed at next month's Budget¹. The scheme is for England and is aimed at first-time buyers purchasing a new-build property from a developer signed up to it¹.

Under the plans, the scheme is expected to support 2.5% deposits backed by 20% government-backed equity loans¹. People will be able to access equity loans with an initial interest free period, which the department said could save those who use the scheme hundreds of pounds per month compared with a 95% mortgage¹. The scheme will also set a household income cap with local property price caps, with the detail to be set out at the Budget¹. Developers will be expected to make a contribution when signing up to help cover costs¹.

The department said the scheme will help tackle the deposit barrier for first-time buyers who would otherwise be unable to afford their first home, and that it will act as a stimulus to the new build market, which it said faces challenging headwinds from international economic pressures and rising construction costs¹. Further details, including costs and implementation timelines, will be announced by the Chancellor at the Budget¹.

A report on 1 November 2026 said the Labour Party government will unveil the scheme next month, and that debate is already under way over whether first-time buyers or housebuilders will be the biggest winners². The same report said 1.8 million households will see their existing fixed deals expire this year, including almost 750,000 borrowers coming off older, cheap fixed rates taken out up to five years ago². It cited Moneyfacts figures showing the average rate on a five-year fixed mortgage is now 6%, with the average two-year fixed at 5.97%².

The two accounts differ on who announced the scheme: the department's release attributes the announcement to the government, while the newspaper report says Prime Minister Andy Burnham announced plans for Your First Home¹. The department's release does not name the Prime Minister¹.

Why it matters for households

The scheme is aimed at first-time buyers in England who buy a new-build home from a participating developer, and who meet a household income cap and local property price caps that have not yet been set¹. On the figures given, a buyer would put down 2.5% of the purchase price and take a 20% government-backed equity loan, with an initial interest free period on that loan¹. The size of any monthly saving depends on the mortgage taken alongside it; the department's comparison is with a 95% mortgage¹. The caps, the length of the interest free period, the interest charged afterwards and the developer contributions have not been reported¹.

The scheme sits alongside existing help for first-time buyers, including Stamp Duty first-time buyer relief and the rules on who counts as a first-time buyer for property tax. Separate schemes operate across the UK, set out in the guide to first-time buyer schemes in England, Scotland, Wales and Northern Ireland, and the existing First Homes scheme in England is distinct from Your First Home¹.

For households remortgaging, the reported average fixed rates of 6% for five years and 5.97% for two years apply to new deals, not to the scheme². The report quoted Joseph Lane of Mortgage Lane saying mortgage pricing could move more in the eight days between the Budget and a subsequent decision than from anything in the Red Book, and that a giveaway that spooks the gilt market would take more out of homeowners' pockets than it puts back in².

What happens next

The Chancellor is due to set out further details, including costs and implementation timelines, at the Budget next month¹. The income cap, property price caps and developer contribution terms are among the details not yet published¹.