Government Launches 'Your First Home' Scheme with 2.5% Deposit; Details Due October 28
The government announced a new first-time buyer scheme on 26 September 2026 combining a 2.5% deposit with a government-backed equity loan for new-build homes in England. Full scheme details, including caps and launch date, will be revealed at the Autumn Budget on 28 October 2026.
On 26 September 2026, the government unveiled "Your First Home," a new equity-loan scheme designed to help first-time buyers purchase new-build properties with a minimal deposit. The scheme aims to address housing affordability for entry-level buyers priced out by traditional mortgage requirements.
What's Confirmed So Far
The government has confirmed that the scheme will:
- Apply to first-time buyers only in England (Wales excluded; Help to Buy–Wales remains available until 31 March 2027).
- Allow buyers to purchase new-build homes from participating developers with a 2.5% cash deposit.
- Provide a government-backed equity loan covering part of the property price (likely around 20%, pending confirmation).
- Include an initial interest-free period on the loan portion.
- Set an income cap and local price caps to ensure affordability.
Pre-registration is expected to open by the end of 2026, but the Chancellor will confirm all remaining details—including the exact caps, interest rates after the interest-free period, repayment terms, and the official launch date—at the Autumn Budget on 28 October 2026.
Market Context
The scheme launches as house price growth stalls (1.4% annually as of July 2026) and mortgage rates remain elevated. Average two-year fixed rates stood at 5.93% in early October 2026. By targeting new-build properties and low deposits, the government hopes to stimulate both demand and construction without inflating existing house prices.
What this means for foreigners settling in the UK: If you are a first-time buyer planning to purchase a new-build home, watch for the scheme details on 28 October. Early registration in late 2026 could position you for a 2027 purchase with a much smaller deposit than traditional 5–10% requirements. However, the scheme is England-only, applies only to new builds from registered developers, and income/price caps may limit eligibility depending on your location and salary. Check scheme rules carefully before committing to a property search.
Sources
Independent app, not a government. General information, not advice. The official source:
