Could the new first-time buyer scheme help you get on the property ladder

In summary

• The government has announced a new first-time buyer scheme called Your First Home, which is expected to allow eligible buyers to purchase a new-build home with a deposit of 2.5%
• For a typical first-time buyer home with an average asking price of £225,199, a 2.5% deposit would be approximately £5,630
• The scheme is expected to include a 20% government-backed equity loan and an initial interest-free period to help reduce upfront home-buying costs
• Many important details are still to be confirmed in the Budget at the end of October, including eligibility criteria, property price caps, lender participation and the longer-term cost of the equity loan

The government has announced plans for a new first-time buyer support scheme called Your First Home, which it says will help more people onto the property ladder. The scheme is due to be confirmed in full at the Budget at the end of October.

At a time when mortgage rates remain elevated and saving a deposit is one of the biggest hurdles facing first-time buyers, the prospect of buying a home with a deposit of just 2.5% is understandably grabbing headlines.

So what is the scheme, and who could benefit? Here's what we know so far.

What is the Your First Home scheme?

According to the government's announcement, Your First Home will be a new equity loan scheme designed to support first-time buyers purchasing a new-build home in England.

The government says the scheme is expected to offer:

• A minimum deposit of 2.5%
• A 20% government-backed equity loan
• An initial interest-free period on that equity loan
• Access to participating new-build properties from developers signed up to the scheme
• Support targeted at first-time buyers who otherwise may struggle to buy a home

The government has also said the scheme will include household income caps and local property price caps, although the details have not yet been published.

How much deposit could you need?

One of the scheme's biggest selling points is the proposed 2.5% deposit requirement. The average asking price of a typical first-time buyer home, which we define as a property with 0-2 bedrooms, is currently £225,199.

Based on that average price, a 2.5% deposit would be around £5,630.

For many prospective buyers, reducing the savings needed upfront could make home ownership feel more achievable.

However, it's important to remember that the scheme has not yet launched and the final eligibility criteria are still to be announced.

Buying your first home now vs waiting for the Your First Home scheme

Why is the government introducing the scheme?

The announcement comes at a challenging time for both first-time buyers and the new-build sector.

At the same time, borrowing costs have risen. The average two-year fixed mortgage rate is currently 5.49%, compared with 4.53% a year ago and 4.25% in February 2026 before the war in Iran started.

The government says the scheme is designed both to tackle deposit barriers for buyers, and to support the delivery of new homes. It has described the scheme as a way to provide a much-needed boost to the new-build market while helping more people achieve home ownership.

Could it save buyers money each month?

Potentially. The government says the initial interest-free period means buyers using the scheme could save hundreds of pounds per month compared with taking out a standard 95% mortgage.

However, the exact savings will depend on factors such as:

• The value of the property
• The size of the mortgage
• Future mortgage rates
• The length of the interest-free period
• The cost of the equity loan once interest begins

Once the full scheme rules are published, some of the above points will become clearer.

What do we still need to know about Your First Home?

Although the broad outline of the scheme has been announced, some of the most important details are still missing.

How long the interest-free period will last

The government has confirmed there will be an initial interest-free period, meaning there will be no interest on the part of your mortgage that's government-backed. But it has not yet revealed how long that period will last.

What interest rate will apply afterwards

We know interest will eventually apply to the equity loan, but the government has not yet announced what that rate will be.

Regional property price caps

The government has said there will be local property price caps, but the specific limits will likely be published at the Budget.

What will lenders will offer

Mortgage lenders will ultimately decide how much they are prepared to lend under the scheme. Those lending criteria have not yet been confirmed.

Which developers will take part

The scheme will only apply to developers that choose to participate. Once there's more detail available around which homes you can purchase under the scheme, we'll make sure these are easily identifiable on Rightmove.

When applications open

The government says implementation timelines will be announced at the Budget, including details of how to register for the scheme.

What support is already available for first-time buyers?

If you're considering buying your first home, it's worth remembering that support already exists and buyers don't necessarily need to wait for the new scheme.

Existing options include Shared Ownership, First Homes and a range of low-deposit mortgage products.

Take a look at our guide to current first-time buyer mortgage schemes.

Depending on your circumstances, one of these existing options may already help you make your move.

Is Your First Home the same as Help to Buy?

Some might notice similarities between Your First Home and the government's previous Help to Buy equity loan scheme.

Help to Buy ran in England from 2013 until 2023 and was designed to help buyers purchase a new-build home with a smaller deposit. Under the final version of the scheme, buyers could purchase a new-build property with a 5% deposit, while the government provided an equity loan of up to 20% of the property's value (40% in London), with buyers taking out a mortgage for the remainder. The equity loan was interest-free for the first five years.

Based on the details announced so far, Your First Home appears to follow a similar approach. The government has said the new scheme is expected to offer a 20% government-backed equity loan for first-time buyers purchasing eligible new-build homes, alongside an initial interest-free period.

However, the headline deposit requirement is expected to be lower at 2.5%, and the government has indicated that household income caps and local property price caps will be used to make sure support is targeted to where it's most needed. Full eligibility rules and the details of the interest-free period will be announced in the Budget at the end of October.

What does Rightmove think?

Alex Slater, our Director of New Homes, says: "Any measures that help more first-time buyers access home ownership are welcome, particularly at a time when new homes developers are facing some of the toughest market conditions in years."

"Developers continue to manage a combination of challenges, including competition from a high level of resale homes on the market. Schemes like this should focus on helping to unlock greater affordability, improve confidence to bring forward new developments, and support the delivery of much-needed new homes across Great Britain."

The proposed Your First Home scheme could become one of the most significant first-time buyer support measures introduced in recent years.

A deposit of just 2.5%, combined with a government-backed equity loan and an initial interest-free period, has the potential to help more people onto the property ladder.

But while the headline announcement is eye-catching, many of the details buyers need to make an informed decision are still to come.

Prospective buyers can keep an eye on the Budget, which takes place on 28 October. While we wait for the detail to be released, first-time buyers can continue to explore mortgages, as well as the first-time buyer schemes already available today.

We'll share more information on this new scheme as it becomes available. In the meantime, you can read more guides for first-time buyers here.

Sources: Rightmove House Price Index (September 2026), Podium Solutions mortgage rate data, gov.uk

Please note: Your home may be repossessed if you do not keep up repayments on the mortgage. Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.