What we know so far, what is still to be confirmed, and what it could mean for you.
Saving for a deposit remains the single biggest hurdle for most first-time buyers. The government has now signalled it wants to lower that hurdle significantly, with a new scheme aimed at buyers of new-build homes in England.
What’s been announced?
On Saturday 26 September 2026, the government announced a new equity loan scheme called Your First Home, which will be confirmed at next month’s Budget.
It is expected to support deposits of just 2.5%, backed by a 20% government-backed equity loan, for first-time buyers purchasing a new-build property from a developer signed up to the scheme.
That is half the minimum deposit required under the old Help to Buy scheme, which asked for 5%. As a rough illustration, on a £230,000 property (the Rightmove average for first-time buyers), the deposit would be £5,750.
How will it work?
Buyers will be able to take out an equity loan with an initial interest-free period, which the government says could save users hundreds of pounds per month compared to a 95% mortgage.
The scheme will not be open to everyone. It will include a household income cap and local property price caps, with the exact thresholds to be set out in the Budget. Developers taking part will also pay a fee linked to property values, which will contribute towards the cost of running the scheme.
Some details are still unclear. The initial announcement does not explain exactly how the remaining 2.5% of the purchase price will be funded, although housebuilders will make a financial contribution and full details are expected in the Budget.
When can I apply?
Not yet unfortunately. Full details are due to be confirmed at the Autumn Budget on 28 October 2026, and the scheme is not yet open. Pre-registration is expected to open by the end of the year.
Things to keep in mind
A lower deposit can open doors, but it is worth going in with your eyes open.
Help to Buy attracted criticism for pushing up new-build prices, and one study from 2019 found that first-time buyers using it paid 10.3% more for their new-build home than those buying without the scheme. Comparing prices with similar new-build and resale homes outside the scheme will be important.
It is also worth remembering that an equity loan is still borrowing. Once any interest-free period ends, there will be costs to factor in, and the loan will need to be repaid, typically when you sell or remortgage. Getting advice on whether the monthly commitment remains affordable over the long term is essential.
What happens next?
We will be watching the Budget closely on 28 October. Until then, the key questions include:
- What the household income and local property price caps will be
- How long the interest-free period will last and what the equity loan will cost afterwards
- How and when the equity loan will need to be repaid
- Which lenders and developers will take part
We will keep you updated
As soon as we know more, we will update you. In the meantime, if you are thinking about buying your first home and would like to understand your options, get in touch with the Drake Mortgages team on 020 8301 7930
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