THE PROPERTY FILTER TAKE
The government says its Your First Home scheme in England is expected to support 2.5% deposits backed by 20% equity loans on new builds.
The number that matters: on a hypothetical £250,000 new build, the buyer would put down £6,250 and borrow £193,750 from a lender.
Consider reviewing any starter-home stock you hold or target near new-build sites before the Budget on 28 October 2026 sets the caps.
The Your First Home scheme is a new equity loan for first-time buyers in England, to be confirmed at the Budget on 28 October 2026. According to the GOV.UK announcement of 26 September 2026, it is expected to support 2.5% deposits backed by 20% government-backed equity loans. For landlords, the question is simple. Who rents your starter homes if more tenants can buy?
What has the government announced?
The scheme is expected to cover new-build homes bought from developers signed up to it (GOV.UK, 26 September 2026). An equity loan is a loan covering a share of the purchase price, alongside the buyer's deposit and mortgage. The repayment terms for Your First Home have not been published. Buyers get an initial interest free period on that loan. GOV.UK says users "could save hundreds of pounds per month" compared with a 95% mortgage.
The scheme will also set a household income cap with local property price caps (GOV.UK). Developers will be expected to make a contribution when they sign up, to help cover the scheme's costs. The government also frames the scheme as a stimulus for a new-build market facing rising construction costs and international economic pressures. The Chancellor will set out further details, including costs and implementation timelines, at the Budget.
The Budget date comes from the Chancellor's letter to the Treasury Select Committee. It confirms the Budget will be held on 28 October 2026. The caps will be set out at the Budget. The length of the interest free period is not in the announcement.
What does a 2.5% deposit look like on a new build?
Here is an illustrative example, not a scheme figure. On a property worth £250,000, a 2.5% deposit is £6,250. A 20% equity loan is £50,000. That leaves a mortgage of £193,750, or 77.5% of the price.
Compare a 95% mortgage on the same home. The deposit is £12,500 and the mortgage is £237,500. So the buyer needs half the cash up front and borrows £43,750 less from a lender. Whether a given home qualifies depends on the local price cap, which is not yet known. Our free stamp duty calculator covers the purchase tax side of the same deal.
I have not modelled monthly payments here. That needs a mortgage rate and the equity loan terms, and neither is in the announcement. Speak to your accountant or broker before you build any plan on these numbers.
What could it mean for buy-to-let investors?
This part is analysis, not announced policy. If the scheme lowers the cash barrier, some tenants saving for a first home may buy sooner. That could thin the tenant pool for starter flats and small houses near new-build sites. It may also add buyer competition for those homes.
The government describes the scheme as one for England, expected to cover new builds bought from signed-up developers (GOV.UK). On that description, older stock sits outside it. You may wish to check how much of your rental income depends on would-be first-time buyers. Our stress test calculator helps you test a deal if rents soften.
There is a precedent. Building reports that Help to Buy, an earlier equity loan, ran for all purchasers from 2013 to 2021. It was then restricted to first-time buyers and abandoned in 2023. Building reports that a recent independent evaluation for the Ministry of Housing, Communities and Local Government found Help to Buy delivered "very high value for money" for taxpayers. It also boosted housing supply beyond the homes sold through it, the evaluation found. Building also notes critics' argument that it inflates prices, with developers soaking up the stimulus through price rises. For wider context on balancing your portfolio, see our property investment strategies hub.
Key takeaways
Your First Home is expected to support 2.5% deposits with 20% government-backed equity loans on new builds in England (GOV.UK, 26 September 2026).
The Budget on 28 October 2026 will set the income cap, local price caps, costs and timelines.
On an illustrative £250,000 new build, the buyer puts down £6,250 and takes a £193,750 mortgage.
Landlords letting starter homes near new-build sites may wish to review tenant demand once the caps are published.
Help to Buy, the previous equity loan, ran from 2013 and was abandoned in 2023, according to Building.
Frequently asked questions
What is the Your First Home scheme?
When will the full details be announced?
Does the scheme apply in Scotland, Wales or Northern Ireland?
Can landlords or investors use it?
