What is the 'Your First Home' scheme and what should first-time buyers do before reserving a new build?

What is the 'Your First Home' scheme?

The government announced the 'Your First Home' scheme on Saturday, 26 September 2026, describing it as a new equity loan scheme for first-time buyers purchasing new build homes in England. Costs, the implementation timetable and eligibility rules will follow at the Budget on 28 October 2026. Until then, buyers, developers and advisers are all working from a press release, not scheme rules. That gap matters, particularly for anyone tempted to reserve a plot on the strength of a headline. The full announcement is available on GOV.UK.

How will the 2.5% deposit and equity loan work?

Under the scheme as announced, a first-time buyer purchasing an eligible new build property would pay a deposit of just 2.5% of the purchase price. The government would then provide an interest-free equity loan representing 20% of the purchase price, leaving the buyer needing a mortgage for the remaining 77.5%. The loan will only be available on new build properties bought from a developer signed up to the scheme.

Household income caps and local property price caps will also apply, so that support is targeted at buyers who need it most. In our view, the income cap is the detail worth watching for. It will decide whether the scheme genuinely reaches first-time buyers who cannot otherwise save a deposit, or simply adds demand to developments that are already selling well. The figures for both caps, and the length of the interest-free period, will not be known until the Budget.

What is the difference between Help to Buy and the 'Your First Home' scheme?

'Your First Home' uses the same basic structure as Help to Buy, which ran in England from 2013 until 2023. This was a government equity loan on a new build property, alongside a mortgage and a deposit. The headline difference announced so far is the deposit. Help to Buy required a minimum deposit of 5%, while 'Your First Home' is expected to require just 2.5%, with the government equity loan making up the same 20% of the purchase price in both cases. This would leave a slightly larger mortgage under the new scheme, at 77.5% of the purchase price rather than 75%.

Beyond the deposit, the two schemes share features that caused real difficulty for some Help to Buy buyers, and are worth understanding from the outset this time. The equity loan is interest-free for an initial period, but the interest rate that then applies typically rises annually, adding to the ongoing cost of the loan. More importantly, on repayment, the government's share is calculated as a percentage of the property's value at the time of repayment, not as a fixed amount. We have seen Help to Buy clients assume that a 20% loan simply meant a 20% repayment, full stop. It does not. If the property has gone up in value, the government is owed 20% of the higher figure, which can be a considerably larger sum than the amount originally borrowed. Whether the repayment mechanism carries over unchanged to 'Your First Home' is one of the details still to come. Conveyancers play a central role in making sure buyers understand terms of this kind before they commit to a purchase, since misunderstandings of this sort can lead to financial hardship and disputes.

What should first-time buyers do before reserving a new build home under the scheme?

Before reserving a new build property under 'Your First Home', first-time buyers should:

• Seek independent financial advice before reserving a new build property. Speak to a qualified financial adviser about how the scheme fits into your long-term financial plans, not just the monthly cost of the mortgage.

• Ask your conveyancer to explain the repayment structure and interest provisions carefully, and do not be afraid to ask as many questions as you need. There is no such thing as a stupid question when it comes to a government charge over your home.

• Obtain valuation advice from a specialist surveyor on the purchase price and the property's potential for gain or loss.

• Compare new build prices carefully against similar existing homes nearby. There is never a guarantee that a property will hold its value, and new build premiums can mean slower price growth - in some cases, values fall shortly after purchase.

• Wait to check the eligibility criteria and price caps once these are confirmed at the Budget, before paying a reservation fee.

VWV's Residential Conveyancing team supports first-time buyers using government home-buying schemes. We explain the equity loan terms, liaise with developers and lenders, and check the paperwork reflects what has actually been agreed before exchange of contracts.

Download our free First-Time Buyer's Guide and Checklist

For a step-by-step overview of the new build buying process, including the questions to ask before reserving a property under a government scheme, download VWV's First-Time Buyer's Guide and Checklist. The guide covers instructing a conveyancer, understanding equity loan and shared ownership terms, budgeting for the full cost of buying. This includes searches, surveys and Stamp Duty Land Tax and what to check before exchange of contracts and completion.

Complete the short form to receive your copy by email: Access the First-Time Buyer's Guide and Checklist

If you need legal support with buying a new build home under a government scheme, please contact Fiona Baker in our Residential Conveyancing team, on 01923 919 353 or complete the form below.