Your First Home Scheme: What First Time Buyers Need to Know

If you've been saving for a deposit and feel like you're getting nowhere, this one is worth your time.

On Saturday 26 September 2026, the government announced a new scheme called Your First Home. It will let first time buyers in England buy a new build home with a deposit of just 2.5%, backed by a government loan worth 20% of the price.

It isn't open yet. The full details will be confirmed at next month's Budget. But if you're a first time buyer, or you know one, here's everything we know so far, in plain English.

How the scheme works

The idea is simple. You put down a small deposit, the government lends you a chunk of the price, and a normal mortgage covers the rest.

• Your deposit: as little as 2.5% of the price.
• The government loan: 20% of the price. This is called an equity loan, which means the government owns a share of the value of your home until you pay it back.
• Interest free to start: you won't pay interest on the government loan for an initial period. How long that lasts will be confirmed at the Budget.
• Your mortgage: covers the remaining 77.5%.
• New builds only: the home must be a new build, bought from a developer who has signed up to the scheme.

The big win is that you need a much smaller mortgage than you would with a standard 95% deal. The government says this could save buyers hundreds of pounds a month.

What it could look like on a £200,000 new build

Let's say you're buying a £200,000 new build home near Bury. Here's how Your First Home compares with a standard 95% mortgage.

In this example, you'd need half the deposit and your mortgage payment could be around £175 a month lower.

These figures are for illustration only. The monthly payments assume a 4.5% rate over 30 years. Your actual rate, the length of the interest free period and the price limits in your area will all make a difference, so always speak to a mortgage adviser.

Who it's for

The scheme is aimed at first time buyers who can save a small deposit but don't have the Bank of Mum and Dad to help them.

To keep it targeted, the government has said there will be:

• Income limits, so people on higher salaries can't use it.
• A cap on savings, so people who already have a large deposit can't use it.
• Price limits on the homes you can buy, keeping it to more modest properties.

The exact figures haven't been published yet. We'll know more once the Budget confirms the rules.

Why the government is doing this

There are two reasons.

The first is to help first time buyers. Raising a deposit is one of the biggest things stopping young people from buying, especially if they have no family money behind them.

The second is to get the property market moving. New build construction has been slowing down. By helping more buyers into new homes, the government hopes to give developers the confidence to start building again.

How it compares to Help to Buy

If this sounds familiar, that's because it's very similar to the old Help to Buy scheme, which ran from 2013 and helped hundreds of thousands of people buy their first home.

The main differences are the smaller deposit and the tighter rules on who can use it.

Things to think about before you jump in

This could be a real help for a lot of people. But as an agent, I'd rather you went in with your eyes open.

• It's a loan, not a gift. The 20% has to be paid back, usually when you sell or remortgage. Because it's a share of your home's value, if your home goes up in value, the amount you pay back goes up too.
• Interest kicks in eventually. Once the interest free period ends, you'll start paying fees on the loan. Build that into your budget from day one.
• New build prices. Some critics worry schemes like this push new build prices up. Always compare the price with similar homes nearby.
• Negative equity. With only 2.5% of your own money in, a small drop in prices could mean you owe more than the home is worth. That matters if you need to move within a few years.
• You're limited to new builds. If your heart is set on a character terrace or an older family home, this scheme won't cover it.

None of this means you shouldn't use it. It just means you should get proper advice first.

When it starts and what to do now

1. Next month: the Chancellor confirms the full rules at the Budget, including income limits, price caps and how long the loan stays interest free.
2. By the end of 2026: pre registration is expected to open.
3. After that: buyers can start using the scheme on new builds from signed up developers.

In the meantime, here's what you can do:

• Keep saving. Even 2.5% on a £200,000 home is £5,000, and you'll also need money for legal fees and moving costs.
• Check your credit file and tidy up any old debts.
• Speak to a mortgage adviser about what you could borrow.
• Start looking at new build developments in your area so you're ready to move when it opens.

Thinking about buying your first home?

If you're a first time buyer in Bury, Bolton, Ramsbottom or the surrounding villages, I'm happy to talk you through your options. No pressure, just an honest, informal chat.

And if you know someone saving for their first home, send this to them. It could make a real difference.

Office: 01706 310171 Mobile: 07597 407219 88 Bolton Road West, Ramsbottom, BL0 9PD bowmanestatesltd.com Instagram: @bowmanestates_

Chris Bowman, Managing Director, Bowman Estates

Sources

• GOV.UK: New first time buyer scheme to be confirmed at Budget
• ITV News: New Your First Home scheme to help first time buyers
• Property Industry Eye: Your First Home scheme