For many people, buying their first home is an exciting goal, but saving enough for a deposit can feel like the biggest obstacle. With the cost of living, mortgage affordability and the challenge of getting onto the property ladder all weighing on prospective buyers, any new support is likely to attract attention.
The government has announced plans for a proposed first-time buyer scheme called Your First Home, which could allow eligible buyers to purchase a new-build property in England with a deposit of just 2.5%.
The scheme is expected to include a government-backed equity loan, alongside an initial interest-free period. However, important details are still to be confirmed at the Budget on 28 October 2026.
So, what could this mean if you’re hoping to buy your first home? And what should you be considering while you wait for more information?
What is the Your First Home scheme?
Your First Home is a proposed government initiative intended to help more first-time buyers overcome the financial barriers to home ownership.
Under the plans announced so far, eligible buyers are expected to be able to purchase a qualifying new-build property with a deposit of 2.5% of the purchase price. A government-backed equity loan of 20% is also proposed, with an initial interest-free period.
The first-time buyer scheme is intended to make buying a home more accessible. Especially for people who may be able to afford monthly repayments but struggle to save a large deposit.
However, the first-time buyer scheme has not yet launched, and the final rules have not been published. Eligibility requirements, income limits, property price caps and the terms of the equity loan are all expected to be clarified.
It’s also important to remember that the scheme is expected to apply to eligible new-build homes rather than the entire property market.
How much deposit could you need?
One of the most significant aspects of the proposed scheme is the possibility of buying with a smaller deposit.
For example, if you were looking at a property priced at £200,000, a 2.5% deposit would be £5,000. With a more traditional 5% deposit, you would need £10,000.
That difference could make a real impact on how quickly some buyers are able to save for their first home.
| Property price | Proposed 2.5% deposit | Example 5% deposit |
| £150,000 | £3,750 | £7,500 |
| £200,000 | £5,000 | £10,000 |
| £225,000 | £5,625 | £11,250 |
| £250,000 | £6,250 | £12,500 |
These figures are examples for illustration only. The 2.5% deposit is based on the proposed scheme and is not yet a confirmed requirement. The 5% figures represent an alternative deposit amount, rather than a guarantee that a mortgage will be available.
You’ll also need to budget for other costs associated with buying a property. These could include legal fees, surveys, moving expenses and any applicable Stamp Duty Land Tax.
How would the scheme work alongside a mortgage?
Although the proposed scheme could reduce the amount buyers need to save upfront, a mortgage would still be an important part of the purchase.
The government-backed equity loan is expected to cover 20% of the property’s value. While the buyer would provide their deposit and arrange a mortgage for the remaining amount.
For example, on a qualifying property priced at £200,000, the proposed arrangement could look like this:
- Your deposit: £5,000 (2.5%)
- Government-backed equity loan: £40,000 (20%)
- Mortgage: £155,000 (77.5%)
This is a simplified illustration based on the proposed structure. The final arrangements will depend on the scheme rules and participating mortgage lenders.
It’s worth remembering that a smaller deposit doesn’t automatically mean a mortgage will be affordable or available. Lenders will still assess factors such as income, regular expenditure, existing borrowing, credit history and the ability to meet monthly repayments.
The interest-free period on the equity loan could also help reduce initial costs. But the length of that period and the interest payable afterwards have not yet been confirmed.
If you’re thinking about buying your first home, understanding your budget and the options available to you is an important first step. A mortgage adviser can help you explore suitable mortgage products and explain the borrowing requirements, while an estate agent can help you understand the properties available within your budget.
At DDM Residential, we can help you explore the local property market and identify homes that fit your requirements.
Should you wait for the new scheme before buying?
If you’re saving for your first home, it’s understandable to wonder whether you should wait until the proposed scheme becomes available.
The answer will depend on your individual circumstances, your savings, your borrowing position and the type of property you’re hoping to buy.
Waiting could be worthwhile if you’re particularly interested in a new-build property that may qualify for the scheme. However, there is currently no guarantee that a particular development or property will be included, and the final eligibility criteria are still to be announced.
Equally, you may find that buying an existing property or exploring other home-buying options suits your needs better.
Rather than putting your plans on hold completely, you could use this time to prepare. Building your savings, reviewing your monthly outgoings and speaking to a mortgage adviser about your borrowing options can help you understand what may be achievable.
It’s also a good opportunity to start researching the areas you’d like to live in and the types of properties available within your budget.
What other options are available to first-time buyers?
Your First Home is not the only potential route into home ownership. Depending on your circumstances, there may already be options worth exploring.
Low-deposit mortgages
Some mortgage products are available with deposits of 5%, although the amount you need and the interest rate offered will depend on the lender and your financial circumstances.
A smaller deposit can help you buy sooner, but it may also mean borrowing a greater proportion of the property’s value. This can affect the mortgage products available and the overall cost of borrowing.
Shared Ownership
Shared Ownership allows eligible buyers to purchase a share of a property and pay rent on the remaining share. It can reduce the initial amount needed to buy, although buyers must consider both mortgage repayments and rent, as well as any service charges.
First Homes
The First Homes scheme was introduced to help eligible first-time buyers in England purchase certain new-build homes at a discount to their market value. Availability and eligibility depend on the properties and scheme requirements in the relevant area.
These options have different terms and conditions, so it’s worth checking the current rules and seeking appropriate advice before deciding which route may work best for you.
How DDM Residential can help with your first home search
Buying your first home involves more than finding a property you like. You’ll want to consider the location, your day-to-day needs, your future plans and the costs involved in making a move.
Our local teams understand the property markets across Scunthorpe, Grimsby, Gainsborough, Brigg, Barton and the surrounding villages. Whether you’re looking for a first home in a town or hoping to find something in a nearby village, we can help you understand what’s available and guide you through the property search.
We can help you explore suitable homes, arrange viewings and answer your questions about the buying process.
You don’t need to wait until the new scheme is finalised to start exploring your options.
Thinking about buying your first home?
The proposed Your First Home scheme could provide another opportunity for eligible buyers who are struggling to save a deposit. However, the full details are still to come, and it’s important to consider all your options before making a decision.
In the meantime, you can start researching local areas, getting a feel for property prices and identifying the features that matter most to you.
Get in touch with DDM Residential to talk about your first home search. Our friendly, knowledgeable team can help you explore the local market, find properties that suit your needs and take the next steps towards finding a place of your own.
Your first home may be closer than you think, and we’re here to help you explore the possibilities.
