First-time buyers in England could soon buy a new-build home with a deposit of just 2.5%. Prime Minister Andy Burnham announced the “Your First Home” scheme on 26 September 2026, as Labour’s conference opened in Liverpool. The government would lend buyers 20% of the price, interest-free at first, and a mortgage would cover the rest.
The full rules arrive with the Autumn Budget on 28 October. Here is what we know so far, what is still unclear, and what to weigh up before you get your hopes, or your savings, set on it.
How the scheme works
You put down 2.5%, the government lends 20% as an equity loan, and your mortgage covers the remaining 77.5%. Using Rightmove’s average first-time buyer price of £230,000, that is a £5,750 deposit and a government loan of up to £46,000 (The Star).
| Your First Home (proposed) | Help to Buy (closed 2022) | |
|---|---|---|
| Minimum deposit | 2.5% | 5% |
| Government equity loan | 20% | Up to 20% (40% in London) |
| Interest-free period | Not yet confirmed | 5 years |
| Income cap | Expected £90,000 (£110,000 in London) | None |
| Homes covered | New builds in England from participating developers | New builds in England |
Comparison from HomeOwners Alliance.
It isn’t open yet. Pre-registration is expected by the end of 2026. The Budget on 28 October should confirm the price caps, how long the loan stays interest-free, what it costs after that, and how and when it is repaid. Funding is due to come from existing government budgets, with housebuilders paying towards running costs.
Supporters and critics
The government’s case is that saving a deposit is now the biggest barrier for buyers without family help. Burnham said the scheme “will get them the keys to their own front door”, and Housing Secretary Angela Rayner said it would make the first rung of the ladder “just that bit easier” (The Star).
Critics say it adds debt rather than making homes cheaper. Shadow Housing Secretary Katie Lam said buyers would take on more borrowing and that a levy on developers could push new-build prices up. Housebuilders’ shares rose sharply on the news: Persimmon was up 15%, and Taylor Wimpey, Bellway and Barratt about 14% each (Mouthy Money).
The main risk for buyers is negative equity. With only 2.5% of your own money in, a small fall in value can leave you owing more than the home is worth. In one worked example, a £300,000 new build slips into negative equity if it loses just over 3% of its value. New builds also tend to cost more than similar older homes, so that premium can disappear quickly when you come to sell.
What it means if you’re buying your first home
Don’t put your search on hold. The scheme isn’t open, the details aren’t final, and it will only cover new builds. Other routes already exist, including 5% deposit mortgages, smaller-deposit products and shared ownership.
If you’re interested, get ready now.
- Check what you could borrow, and get a mortgage agreement in principle.
- Keep saving. A bigger deposit still means a lower rate and a safer cushion.
- Compare any new-build price with recent sales of similar older homes nearby on HM Land Registry. The gap is what you would need to recover when you sell.
- Read the small print after 28 October: how long the loan is interest-free, what it costs afterwards and when it must be repaid.
- Take independent mortgage advice before committing.
Whichever way you buy, the right home often goes quickly. Set up a free Flash search on CopperFlash, including new builds, and we will tell you the moment one matches what you are looking for. Create your free search.