The government announced a new housing initiative designed to assist first-time buyers in England who lack family financial support. The scheme, titled Your First Home, represents an evolution of the previous Help to Buy program that concluded in 2023. It applies exclusively to new-build residential properties and offers government-backed equity loans to qualifying participants.
Under the program’s structure, eligible buyers receive an interest-free equity loan equivalent to 20% of their property’s purchase price during the initial five-year period. Participants are required to provide a minimum down payment of 2.5%, with a maximum deposit cap of 15%. This arrangement means buyers finance the remaining 77.5% of the property value through a standard mortgage. According to government projections, this configuration could result in monthly savings of several hundred pounds compared to conventional mortgage arrangements.
The initiative includes eligibility restrictions to prevent misuse by affluent purchasers. Household income limits are set at £110,000 annually outside London and £140,000 within London. Regional property price caps vary by location, with inner London capped at £650,000 and outer London at £500,000. Other example caps include Manchester at £355,000, Reading at £375,000, and Middlesbrough at £220,000.
The equity loan terms specify that interest becomes applicable after the initial five years, beginning at 1.5% in year six and increasing to 3% from year seven forward. The loan amount adjusts with property value fluctuations—if home values rise, outstanding loan amounts increase proportionally, and vice versa. Repayment typically occurs at property sale, though early partial or full repayment is permitted. Registration opened by the end of December, with applications commencing in February 2027 and initial loans anticipated from April 2027, drawing from a total £4.7bn allocation over five years.
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