Your First Home Scheme 2026: How Does It Work?

First-time buyers (FTBs) are the lifeblood of the housing market. Therefore, any government initiative aimed at making it easier for them to purchase is important to consider.

The new scheme announced by the government is called Your First Home. Following confirmation in the Autumn Budget on 28 October 2026, we now know more about how it will work. We also now know when buyers can apply.

With £4.7 billion committed to the scheme, it’s become an instant talking point for consumer groups and property professionals alike.

How will Your First Home work?

Your First Home will be restricted to new-build properties, and only those from participating house builders. In this regard, it’s like the Help to Buy scheme. Help to Buy ran for 10 years until 2023, and its later phase was aimed exclusively at first-time buyers.

Under Your First Home, buyers will have to pay a minimum 2.5% deposit on a new-build flat or house. That will then be supported by a 20% government equity loan. This means the buyer would have to secure a mortgage for the remaining 77.5% of the purchase price. This applies if putting down the minimum deposit.

The equity loan will be interest-free for the first five years, with interest charges gradually increasing after that. The entire scheme will apply only to England.

The government claims that FTBs who would otherwise need to save a 5% deposit and secure a 95% mortgage could save hundreds of pounds each month by using Your First Home instead.

The scheme is expected to support around 70,000 first-time buyers and help deliver an estimated 20,000 new homes.

Do the figures add up?

Using a property priced at £225,000 as an example, a traditional 5% deposit would be £11,250, while under Your First Home it would be only £5,625.

And from that point on, the government calculates repayments on a 77.5% mortgage, rather than a traditional 95% mortgage. The remaining 20% would be covered by the government equity loan.

This could make the initial cost of buying a home more manageable for some FTBs. In particular, this would benefit those struggling to save a larger deposit.

But remember that Your First Home will apply to new-build properties only, and they can carry a premium.

There’s no exact figure for the premium, as it varies depending on the property and location. However, new-build homes can cost more than similar-sized second-hand properties in the same area.

So, while a second-hand property might be valued at, say, £225,000, a similar-sized new-build home in the same area could cost more.

You would have to be sure that the Your First Home initiative makes sense for you and your finances, not just at the start. Moreover, you would also need to consider what happens after the five-year interest-free period ends. You should also think about how you would eventually repay the equity loan.

It’s important to remember that an equity loan is not free money. You will still need to repay it, and the amount owed could be affected by changes in your property’s value, depending on the final scheme terms.

You would also have to be happy with a new property as opposed to an older one.

More Your First Home details confirmed

The government’s Autumn Budget 2026 has now confirmed further details about who will be eligible and when the scheme will launch.

These include:

• Household income limits: £110,000 outside London and £140,000 within London.
• Property price caps: These will be based on local authority median house prices, with maximum limits of £650,000 in inner London and £500,000 in outer London.
• Deposit requirements: Buyers will need a minimum 2.5% deposit, with a maximum deposit of 15%.
• Interest-free period: The government equity loan will be interest-free for the first five years, with charges increasing gradually afterwards.
• Participating house builders: Developers will need to sign up to the scheme and make a financial contribution towards its costs.

Importantly, the government has also confirmed when first-time buyers can start applying.

The timetable is:

• By the end of December 2026: Pre-registration opens.
• February 2027: Full applications open.
• April 2027: The first equity loans are expected to be issued.

The scheme will initially be delivered by Homes England. Later, responsibility is expected to transfer to the National Housing Bank in the medium term, subject to the necessary legal and regulatory changes.

Further practical details, including participating developers and individual local property price caps, will still need to be confirmed before the scheme opens.

Will it be a success?

The government is likely to promote the scheme heavily as it will encourage more house building. This will help it work towards its target of 1.5 million new homes in England during this Parliament. Beyond that, it’s too early to tell how the initiative will pan out.

When the similar Help to Buy scheme ended in 2023, government figures showed it had helped more than 328,000 first-time buyers onto the ladder over a 10-year period.

This new scheme is arguably more accessible to FTBs struggling to save a deposit, as it requires a minimum of just 2.5%. In contrast, Help to Buy required a 5% deposit. The scheme is now closed to new applicants, but there are other government home-buying schemes worth exploring if you’re looking to get onto the property ladder.

However, a smaller deposit doesn’t necessarily mean a home will be more affordable in the long term. Mortgage repayments, the price of a new-build property and the eventual cost of repaying the government equity loan all need to be considered.

The devil is in the details, and while the Autumn Budget has provided much-needed clarity, buyers should still look carefully at the full terms before deciding whether Your First Home is right for them.

With pre-registration expected to open before the end of 2026, it won’t be long before we see how much interest the scheme attracts.6.

Last Updated: November 2nd, 2026