The Budget has set out the details of Your First Home, a £4.7 billion scheme offering 20% equity loans to first-time buyers in England, aimed at helping around 70,000 households take their first step onto the housing ladder. Buyers will need a deposit of at least 2.5% and at most 15% of the purchase price, with the equity loan interest-free for five years and then subject to a gradual increase, and the government says the scheme will also support the delivery of an estimated 20,000 new homes.

How the 20% equity loan works

Income caps will be set at £110,000 per household outside London and £140,000 inside London, and price caps will be based on local authority median prices, with inner and outer London caps of £650,000 and £500,000 respectively. Developers will be expected to make a contribution when signing up to the scheme, set on a sliding scale to protect smaller developments, and funding will be capped annually, with the government working with developers and lenders to monitor demand. The scheme will open for pre-registration by the end of December 2026, with full applications from February 2027 and the first loans issued from April 2027.

Caps, dates and industry reaction

The reaction from the mortgage industry has been welcoming but impatient: SPF Private Clients chief executive Mark Harris said it was a shame the scheme is not being launched until the spring, and a missed opportunity that it was not extended to all buyers and existing homes as well as first-time buyers and new builds. The Budget documents also note that people can already save into a Lifetime Isa, with a 25% government bonus up to £1,000 a year on savings of up to £4,000 a year, although withdrawals for reasons other than buying a first home or retirement can attract a 25% charge.

Sources: PA via Glasgow Times and Mortgage Strategy.