For many first-time buyers, saving thousands of pounds for a deposit is seen to be the biggest obstacle to getting onto the property ladder, especially taking into consideration the everyday costs of living.
This is the reason why Prime Minister, Andy Burnham’s, announcement of the new ‘Your First Home’ scheme is attracting so much attention; but what does this mean exactly?
For many prospective first-time buyers, the issue is not whether they can afford the monthly mortgage repayments, it’s getting together enough money to purchase the property in the first place. Under the proposed scheme, eligible first-time buyers in England could potentially purchase a qualifying new-build home with a deposit of just 2.5%, alongside a government equity loan of 20% of the property value.
The scheme was announced on Saturday 26 September 2026 with an advertised initial interest-free period for the equity loan. More details on this are to follow in the next Budget, which is due to take place on the 28 October 2026.
The proposal is designed to help first-time buyers with regular income who struggle to save for a deposit in the traditional way. The important thing to remember is that the government isn’t simply gifting buyers 20% of the property value, the incentive would be a repayable equity loan on adequate new-build homes only. The precise repayment arrangements, eligibility criteria and other qualifying conditions are yet to be confirmed.
The government further confirmed that the scheme is designed to help people specifically who cannot rely on the so-called help of ‘Bank of Mum and Dad’. It will be interesting to see how the government will establish eligibility in such circumstances.
It’s important to remember that the 2.5% deposit is not the only expense that you can expect when purchasing your first home, prospective buyers must take into consideration the following:
Mortgage-related costs
20% equity repayment costs
Solicitor conveyancing fees
Search and survey fees
Insurance
Moving costs
Mortgage broker fees
The above list is not exhaustive. First-time buyers should budget for a number of potential expenses rather than putting all available funds towards the deposit.
Whilst a lot of information associated with the scheme remains uncertain, we are here to provide advice and help with simplifying the conveyancing process and making the experience as stress free as possible.
If you’re thinking about taking the leap and stepping onto the property ladder, our experienced conveyancing team are here to help. Click here to speak to a member of the team.
