New 'Your First Home' scheme launches for London buyers
Government-backed equity loan and deposit support aims to help first-time buyers onto the property ladder.
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A new government initiative, 'Your First Home', is set to launch, offering first-time buyers in London support with their initial property purchase. The scheme provides a 2.5% deposit and a 20% government-backed equity loan on new-build properties. This initiative aims to help address the challenges faced by aspiring homeowners in the capital, many of whom are struggling with high rents and the difficulty of saving for a substantial deposit.
Scheme Details and Eligibility
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Under the 'Your First Home' scheme, eligible buyers can secure a new-build property with a minimal deposit. The government will provide an equity loan covering 20% of the property's value, which is interest-free for the first five years. Purchase prices are capped at £650,000 for properties within inner London and £500,000 for those in outer London. Additionally, a household income limit of £140,000 applies to potential buyers in the capital.
The scheme is designed to assist individuals and couples who, despite earning decent salaries necessary for London living costs, find saving for a deposit a significant hurdle. For many, rent payments consume a large portion of their income, making homeownership feel increasingly out of reach. The lower deposit requirement is seen as a key benefit, potentially allowing more people to get onto the property ladder sooner.
Market Context and Launch Dates
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The launch of 'Your First Home' comes at a time when London's property market has experienced a notable lack of optimism. Housebuilders have faced decreased demand, rising construction costs, and new legislation. Data from Molior London indicates that in the first quarter of this year, only 600 new homes were sold to individual buyers in London. Between mid-2025 and mid-2026, just 6,325 new private-sector homes were started in the city.
Pre-registration for the 'Your First Home' scheme is scheduled to open in December 2026. Prospective buyers will be able to submit full applications from February 2027, with the first loans expected to be issued in April 2027. This timeline follows the closure of the previous Help to Buy scheme in October 2022.
Developer and Broker Perspectives
Industry professionals have offered mixed views on the scheme's potential impact. Some developers welcome the lower deposit requirement as a significant step towards helping people move out of renting. However, concerns have been raised by mortgage brokers regarding the scheme's potential to exclude lower-income earners, who may struggle to secure the necessary mortgage for the remaining purchase price. Property consultancy Montagu Evans estimates that the price caps may limit the number of available homes to around a third of those on the market in London.
Chancellor John Healey stated that the government is taking action for young people paying high rents and dreaming of homeownership. The government also hopes that by stimulating buyer demand, the scheme will encourage developers to build more housing, addressing the shortfall in new home starts compared to the Mayor's targets.
Questions this report answers
+What support does the 'Your First Home' scheme offer?
The 'Your First Home' scheme offers first-time buyers a 2.5% deposit and a 20% government-backed equity loan on new-build properties. The equity loan is interest-free for the first five years, aiming to reduce the initial financial barrier to homeownership.
+What are the price and income caps for the scheme in London?
In London, the 'Your First Home' scheme caps purchase prices at £650,000 for inner London properties and £500,000 for outer London properties. Additionally, the household income of potential buyers cannot exceed £140,000.
+When can first-time buyers apply for the 'Your First Home' scheme?
Pre-registration for the 'Your First Home' scheme opens in December 2026. Full applications will be accepted from February 2027, with the first loans scheduled to be issued in April 2027.
+How many new homes were started in London recently?
Between mid-2025 and mid-2026, only 6,325 new private-sector homes were started in London. This figure represents a small fraction of the Mayor's overall annual housing target.
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