The guidance, published on 28 October 2026, confirms income limits, London property price caps and how the equity loan will work.
Applications are expected to open in February 2027.
The scheme will combine a smaller upfront deposit with a government equity loan worth 20% of the purchase price and a repayment mortgage from a participating lender.
It's aimed at those who can afford the ongoing cost of home ownership but have struggled to save for a deposit.
How will Your First Home work?
Under this new scheme, eligible first-time buyers can buy a home with a deposit from 2.5%, supported by a 20% government equity loan. You’ll then need a repayment mortgage to cover the remaining cost, subject to affordability and credit checks.
Financial Reporter reports that the maximum deposit will be 15% of the purchase price.
The equity loan from the government will be interest-free for the first five years. Interest will then be charged at 1.5% in year six and 3% from year seven. Note that these interest payments are separate from your mortgage and do not reduce the equity loan you owe.
The scheme will apply to eligible new-build homes bought from participating developers. You will own your home from completion; the government will not be a joint owner or your landlordE
Who will be eligible for Your First Home?
Those interested will need to be first-time buyers purchasing a new-build home in England within the relevant local price cap.
Total annual household income must be £110,000 or less outside London, or £140,000 or less within London.
Full eligibility rules will be published before applications open.
What are the property price caps?
In London, the property price cap will be £650,000 in inner London and £500,000 in outer London, using the areas defined in the London Plan 2021.
Examples elsewhere include £375,000 in Reading, £320,000 in North Devon and £355,000 in Manchester.
A full list of local authority price caps will be published shortly, with participating developer information available ahead of launch.
What could it look like in practice?
The government gives the example of a £300,000 home: a 2.5% deposit would be £7,500, the 20% equity loan would be £60,000 and the repayment mortgage would be £232,500.
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 |
Compare this to buying the same home with a standard 95% mortgage, which would typically mean a £15,000 deposit and a £285,000 mortgage.
How is it different from Help to Buy?
The broad structure is similar to Help to Buy which was introduced in 2013 and came to an official end in 2023. Help to Buy also used a government equity loan to reduce the deposit and mortgage buyers needed.
Its later version was limited to first-time buyers and applied regional property price caps.
The minimum 2.5% deposit under Your First Home is lower than the 5% required under Help to Buy.
Both schemes offer an initial five-year interest-free period, but the new scheme’s published interest rates are 1.5% in year six and 3% from year seven. Full eligibility and repayment guidance for Your First Home is still to come.
How will the equity loan be repaid?
The equity loan is linked to the value of your home, rather than being a fixed amount to repay.
If you borrow 20% of the purchase price, you will normally repay 20% of the home’s value when you repay the loan, based on an independent valuation. The amount can therefore rise or fall with the property’s value.
For example, a £60,000 equity loan on a £300,000 home would mean repaying £64,000 if the home were later valued at £320,000, or £56,000 if it were valued at £280,000.
The loan will normally be repaid when you sell, but you will also be able to repay some or all of it beforehand. An independent valuation may be required.
When will Your First Home launch?
Applications are not open yet. The government has set out the following timeline for the scheme:
By the end of December 2026: customer pre-registration and guidance, alongside the first developer registrations.
February 2027: first customer applications are expected to open.
April 2027: first property sales under the scheme.
What details are still to come?
Buyers are still waiting for the full eligibility rules, the complete list of local price caps, participating lenders and developers, and detailed application and repayment guidance.
The government will also explain how equity loan interest payments will be collected.
The government strongly recommends considering independent financial and legal advice.
How will the scheme be funded?
The government has allocated £4.7 billion over five years: £700 million in 2027 to 2028 and £1 billion in each of the following four years. Funding allocations will be managed with developers, and overall demand will be kept under review. (gov)
According to Financial Reporter, the government expects the scheme to help 70,000 households onto the housing ladder. This is an anticipated total, rather than a guarantee of how many buyers will benefit.
Developers of all sizes will be able to participate, subject to scheme requirements and a participation agreement.
Government also outlines action on empty homes
Alongside Your First Home, ministers have announced plans to strengthen the powers available to councils to bring empty properties back into use.
The aim is to make it easier for local authorities to use some of England’s vacant homes to meet local housing need.
Further details will be needed to show which properties could be affected, how quickly councils could act and how the costs of taking over, and managing a home would be handled.
