We’ll start with the Autumn Budget's announcements on Your First Home, the cash ISA allowance and the planned First Time Buyer ISA, before looking at the wider announcements on affordable housing, rental income and household bills.
What the Budget means for first-time buyers
Your First Home: new-build homes with deposits from 2.5%
The Budget has confirmed £4.7 billion in government-backed lending for Your First Home, the new equity-loan scheme for first-time buyers in England.
Eligible buyers will be able to buy a new-build home from a participating developer with a deposit of between 2.5% and 15%, alongside a government-backed equity loan worth 20% of the purchase price. A mortgage covers the rest. With the minimum 2.5% deposit, that means borrowing 77.5% of the price through a mortgage.
The government website provides the following example:
Buying a £300,000 home
Source of funding | Amount |
|---|---|
Your deposit (2.5%) | £7,500 |
Government equity loan (20%) | £60,000 |
Repayment mortgage | £232,500 |
Total purchase price | £300,000 |
Who can use the scheme?
Household income must be no more than £140,000 in London or £110,000 outside of London.
Property price caps will also apply: £650,000 in inner London and £500,000 in outer London, with caps elsewhere based on local authority median prices. Buyers will still need to meet their lender’s affordability checks.
What happens after the interest-free period?
The equity loan will be interest-free for the first five years, with interest charges increasing gradually afterwards. It is a loan, not a grant, so buyers need to consider the cost of repaying it as well as their mortgage payments and any fees.
Participating developers will contribute towards the scheme’s costs, with contributions set on a sliding scale to protect smaller developments.
Funding will be capped annually, so meeting the eligibility rules will not by itself guarantee access.
The scheme will open for pre-registration by the end of December 2026 and full applications from February 2027 with the first loans issued from April 2027.
Saving for your first home: cash ISAs and the new First Time Buyer ISA
The planned reduction in the annual cash ISA allowance is no longer going ahead. The £20,000 limit has been retained which lets savers continue using their overall annual ISA allowance for cash savings.
If you're a first-time buyer building a deposit, this preserves the amount you can save in cash ISAs without paying tax on the interest. Note that it is a reversal of a planned restriction, not an increase in the existing allowance.
The government also announced a new First Time Buyer ISA to replace the Lifetime ISA. It pledged that if the home you want to buy costs more than the scheme’s price limit, you’ll get back "at least the money you put in". The full details are still to be confirmed.
Shared Ownership income limits set to rise in 2027
Separately, ahead of the Budget, the government also announced that Shared Ownership household income limits will rise in 2027. They will rise from £90,000 to £110,000 in London and from £80,000 to £90,000 outside of London. Read our guide to the upcoming Shared Ownership income cap changes for more information.
Other housing and living-cost announcements
Property-income tax increase: implications for landlords and renters
The Budget has confirmed that tax rates on property income will rise by two percentage points from April 2027.
For private landlords that are affected, higher tax on rental profits will reduce their after-tax returns. The effect on tenants is less direct: the announcement does not automatically increase rents, and any wider impact will depend on landlords’ decisions and local demand.
More funding pledged for social and affordable homes
Ahead of the Budget, the government pledged more than £1 billion in additional funding for social and affordable housing in England. The announced top-up would take the ten-year Social and Affordable Homes Programme above £40 billion, up from the £39 billion already committed.
Additional funding could help councils and housing associations bring forward more affordable homes. Bear in mind that it is a funding commitment, rather than homes already built, and its impact will depend on allocations, construction costs, and delivery timescales.
Preferential borrowing to support local housing and infrastructure
Pre-Budget reporting also outlined plans to widen access to preferential borrowing rates for councils investing in housebuilding. Separately, a new £1.5 billion borrowing facility is to be designed with mayors from 2028 to support local investment, potentially including housing and transport infrastructure.
Access to lower-cost borrowing could help local authorities fund developments and the infrastructure needed to support them.
Energy support: help with the cost of running a home
A £100 household energy payment has been announced for this winter for around 20 million households in council tax bands A - D. The payment will go directly into bank accounts.
For qualifying homeowners and renters, the payment offers short-term support with the cost of living. The devolved governments will receive funding to decide their own arrangements.
Electricity VAT relief extended until July 2027
The temporary zero rate of VAT on electricity bills has been extended until July 2027, rather than ending in March. This keeps the tax relief in place through the winter and spring.
For households paying their own electricity bills, the extension avoids the return of 5% VAT during that period. The benefit will vary with consumption and tariffs; it does not guarantee a reduction in every household’s bill.
Gas standing charges to be removed: savings will depend on usage
Plans were announced to remove gas standing charges from 2027. These are the fixed daily charges households pay regardless of how much gas they use. The costs will instead be recovered through the unit rate.
Lower-use households stand to gain, while those using more gas could pay more overall.
What does the Budget mean for buyers, homeowners and renters?
For first-time buyers, Your First Home could reduce the deposit and mortgage needed to buy an eligible new-build home. Buyers will need to budget for the equity loan as well as their mortgage. Keeping the cash ISA allowance also preserves an existing way to save towards a deposit.
For homeowners and renters, energy measures provide support with household bills.
For some landlords, the property-income tax rise will put pressure on after-tax rental returns.
The impact of these changes on the wider market will depend however on borrowing costs, household incomes, and the number of homes available, as well as the detailed implementation of each policy.
Key takeaways from the Autumn Budget 2026
Your First Home: Eligible first-time buyers in England can use deposits from 2.5% alongside a 20% equity loan, interest-free for five years. Household income caps are £140,000 in London and £110,000 elsewhere; London property caps are £650,000 in inner London and £500,000 in outer London. Applications are expected to open in February 2027.
Affordable housing supply: A pre-Budget pledge of more than £1 billion extra would take the ten-year social and affordable housing programme above £40 billion, alongside plans to improve access to borrowing for local investment.
Deposit savings: The planned cash ISA allowance cut has been reversed, retaining the £20,000 limit within the overall annual ISA allowance.
Landlords: Property-income tax rates will rise by two percentage points from April 2027, affecting after-tax rental returns.
Home running costs: A £100 payment for qualifying households and extended electricity VAT relief provide support with energy bills.
Gas charges: Removing standing charges changes how costs are recovered, with lower-use households more likely to benefit.
