The government has published details of Your First Home, a new scheme designed to help first-time buyers purchase an eligible new-build home in England from participating developers with a smaller deposit and a mortgage.
The scheme is expected to open for applications in February 2027, following customer pre-registration and the first developer registrations by the end of December 2026. The scheme will be open to developers of all sizes that meet its requirements and enter into a participation agreement.
The first property sales under the scheme are expected from April 2027.
£4.7 billion of funding is available for the scheme over five years (£700 million is allocated in 2027 to 2028 and £1 billion in each of the subsequent years).
Under the guidance published by the government yesterday, eligible buyers will normally need to:
The government says full eligibility rules will be published before applications open.
Eligible purchasers will be able to fund their purchase using:
The buyer will own their home from completion. The government will not be a joint owner or landlord. Participating lenders will still undertake affordability and credit checks before making a lending decision.
For example, the government illustrates the purchase of a £300,000 home with a £7,500 deposit, £60,000 government equity loan and £232,500 repayment mortgage. The government guidance compares this with a standard 95% mortgage, under which a purchaser would typically require a £15,000 deposit and £285,000 repayment mortgage for the same property.
The scheme will support eligible new-build homes from participating developers.
Local property price caps will apply, with separate caps for inner and outer London. The examples currently published by the government include:
| Area | Price cap |
| Reading | £375,000 |
| North Devon | £320,000 |
| Manchester | £355,000 |
|
Middlesbrough
|
£220,000 |
| Inner London | £650,000 |
| Outer London | £500,000 |
The government says a full list of price caps by local authority will be published shortly and information on participating developers will be made available ahead of the launch.
The equity loan will be interest-free for the first five years and will be linked to the value of the property being purchased.
The following interest rates will then apply to the equity loan (meaning that purchasers’ actual monthly costs will depend on the home they buy, the mortgage rate they are offered and their personal circumstances):
Interest payments are separate from mortgage payments and do not reduce the equity loan itself. The government says further details of how the interest will be collected will be published before applications open.
Developers will pay a participation fee on properties sold through the scheme, based on the final sale price of the property. The fee structure will increase progressively according to the number of homes sold through the scheme each year, helping to keep participation accessible for small and medium-sized developers.
The fee rates payable by developers will depend on the number of homes a developer sells through the scheme each year and will apply progressively:
As the equity loan is linked to the value of the property, where the original loan represented 20% of the purchase price, a buyer will normally repay 20% of the home’s value at the point the loan is repaid, based on an independent valuation.
Consequently, the amount repayable can increase or decrease as the value of the property changes. The government therefore shares in both increases and decreases in the home’s value.
The loan will normally be repaid when the owner sells the property, although the guidance states that buyers will also be able to repay some or all of the loan before selling.
Full guidance covering minimum repayment amounts, valuation requirements, any fees that may apply and how repayment works when selling or remortgaging is yet to be published.
Applications are not yet open. The government says customer pre-registration will open before the end of 2026. Pre-registration will not commit an individual to purchasing through the scheme but will provide further information about their eligibility and the applicable price cap in their area.
Your First Home is a positive step, but sustainable change requires action on both sides of the housing market: helping people afford to buy while creating the conditions developers need to deliver more homes. Without addressing both affordability and the barriers to housing delivery, increasing access to home ownership will remain a challenge.
