UK government commits £4.7bn to Your First Home scheme
The programme targets first-time buyers without family financial support in England. The government expects applications to open in February 2027.
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The programme targets first-time buyers without family financial support in England. The government expects applications to open in February 2027.
The UK government has committed £4.7bn over 5 years to Your First Home, a programme for first-time buyers in England. Chancellor John Healey confirmed the funding in this week’s budget, targeting buyers without family financial support, The Guardian said on 30 October.
The government first announced the scheme on 26 September 2026, ahead of the budget confirmation. It says the programme aims to help buyers who cannot otherwise afford a deposit and to support new-home building.
The funding is a commitment to a forthcoming scheme, rather than assistance already delivered. Applications are not yet open; government guidance says they are expected to open in February 2027.
Government guidance says buyers would normally need to be first-time buyers purchasing a new-build main home in England within the relevant local price cap. They must also obtain a mortgage from a participating lender and meet the household income limit.
| Location | Maximum household income |
|---|---|
| Outside London | £110,000 |
| Within London | £140,000 |
The government says full eligibility rules will be published before applications open.
Under the announced Your First Home terms, eligible first-time buyers purchasing qualifying new-build homes in England can seek a 20% equity loan with a deposit from 2.5%. Applications are scheduled to open in February 2027.
Eligible buyers would put down a deposit of at least 2.5%, take a repayment mortgage from a participating lender and receive a government equity loan covering 20% of the purchase price. An equity loan is borrowing whose repayment amount is linked to the home’s value.
The government’s illustration for a £300,000 home shows how the scheme could reduce both the deposit and the mortgage compared with a standard 95% mortgage.
| Funding | Your First Home | Standard 95% mortgage |
|---|---|---|
| Buyer’s deposit | £7,500 | £15,000 |
| Repayment mortgage | £232,500 | £285,000 |
| Government equity loan | £60,000 | None |
The equity loan would normally be repaid when the home is sold. A loan initially covering 20% of the purchase price would normally require repayment of 20% of the home’s independently assessed value at that point. The amount owed could therefore rise or fall with the property’s value.
| Period | Interest rate |
|---|---|
| Years 1 to 5 | 0% |
| Year 6 | 1.5% |
| From year 7 | 3% |
These interest payments would be separate from the mortgage and would not reduce the equity loan owed.
The funding confirmation comes as buyers face higher mortgage costs. Nationwide’s figures show annual UK house-price growth of 0.5% in October, the slowest pace in more than 2 years. Moneyfacts' figures put average fixed mortgage rates close to 6% on Thursday.
| Fixed-rate period | Average rate |
|---|---|
| 5 years | 5.99% |
| 2 years | 5.97% |
Tom Bill, head of UK residential research at Knight Frank, said rising mortgage costs outweighed any support measure in the budget. He said the absence of major budget shocks might produce a modest relief bounce in coming months, but asking prices would need to reflect buyers' tougher financial circumstances.
Rob Wood, chief UK economist at consultancy Pantheon Macroeconomics, said the scheme could give the market a modest boost, while house prices were likely to remain subdued next year.
Nationwide chief economist Robert Gardner said house prices were likely to fall further. He cited weak new-buyer inquiries reported by surveyors and declining consumer confidence during October.
The government allocates £700m in 2027–28 and £1bn in each subsequent year of the 5-year programme.
Before applications open, the government says it will publish full operating guidance and terms. These will include details of eligible homes, participating developers and lenders, how to apply, how interest will be collected and the requirements for repaying the equity loan.
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