What Is the Your First Home Scheme?
The Your First Home Scheme is a new government-backed initiative that Prime Minister Andy Burnham announced at Labour’s annual conference in Liverpool in September 2026. It aims to help first-time buyers in England get onto the property ladder with a much smaller deposit.
For buyers here in Manchester, the announcement has a local connection too. Andy Burnham served as Mayor of Greater Manchester before becoming Prime Minister, and the scheme is likely to attract strong interest from first-time buyers across the region.
Under the proposals, eligible buyers could put down a deposit of just 2.5%, with the government lending up to 20% of the purchase price through an equity loan. A standard repayment mortgage from a participating lender would then cover the rest.
Many see the scheme as a revival of the old Help to Buy equity loan, which closed to new applicants in 2022. We expect full details, including price caps, income limits and launch dates, in the Autumn Budget on 28 October 2026.
At Manchester Money, we help
first-time buyers across Greater Manchester understand their options. In this guide, we look at how the Your First Home Scheme is expected to work, the pros and cons, and what you should consider before deciding whether it’s right for you.
How Will the Your First Home Scheme Work?
Based on the details announced so far, the scheme is expected to combine three parts to fund your purchase. These figures are proposals at this stage and may change once the government publishes the full rules.
- Your deposit: a minimum of 2.5% of the purchase price
- Government equity loan: up to 20% of the purchase price
- Your mortgage: the remaining amount, around 77.5% of the purchase price
A Worked Example
On a £250,000 new build home, you would put down a deposit of £6,250. The government equity loan would cover £50,000, and you would need a mortgage of around £193,750 to cover the rest of the purchase price.
By comparison, buying the same home with a standard 95% mortgage would mean saving a deposit of £12,500 and borrowing £237,500. The scheme could therefore halve the deposit you need and reduce the size of your mortgage considerably.
Interest-Free Period
The equity loan should be interest-free for an initial period. Some reports suggest this will be five years, as it was with Help to Buy. However, the government hasn’t yet confirmed the length of this period or the charges that apply afterwards.
Who Is Eligible for the Your First Home Scheme?
The scheme is aimed at first-time buyers in England who may not have a large deposit or financial help from family. The government has confirmed that eligibility criteria will apply, but it hasn’t announced the exact limits yet.
- You must be a first-time buyer purchasing in England
- The property must be a new build home from a participating developer
- A household income cap will apply (reported to be around £90,000, or £110,000 in London)
- Local property price caps will apply, depending on where you buy
- You will still need to pass a lender’s mortgage affordability checks
Housebuilders taking part will also need to contribute towards the cost of the scheme. Until the government publishes the full rules, it’s worth speaking to a mortgage adviser before reserving a property on the basis of the scheme.
Pros of the Your First Home Scheme
For many first-time buyers, saving a deposit is the biggest barrier to buying a home. The scheme could make homeownership achievable much sooner. Here are the main advantages based on what we know so far.
A Much Smaller Deposit
With a minimum deposit of just 2.5%, buyers could get onto the property ladder years earlier than if they were saving for a 5% or 10% deposit. This could be especially helpful for those paying high rents while trying to save.
A Smaller Mortgage to Pass Affordability
Because the equity loan covers 20% of the price, your mortgage would only need to cover around 77.5%. A smaller mortgage can make it easier to pass a lender’s affordability checks and may give you access to a wider choice of mortgage deals.
Potentially Lower Monthly Repayments
The government says the scheme could save buyers hundreds of pounds a month compared with a 95% mortgage. With a smaller loan and an initial interest-free period on the equity loan, monthly costs could be lower in the early years of ownership.
Brand New Homes
New build homes usually come with a builder’s warranty, modern energy-efficient features and lower maintenance costs in the early years. For first-time buyers, this can mean fewer unexpected repair bills after moving in.
Good Choice in the North West
Research from Rightmove suggests the North West offers the widest choice of new build homes affordable to an average solo buyer under the scheme. With plenty of new developments across Greater Manchester, local buyers could be well placed to benefit.
Cons of the Your First Home Scheme
While the scheme could open the door to homeownership, it isn’t right for everyone. It’s important to understand the potential downsides before committing, as an equity loan is a long-term financial commitment.
The Equity Loan Is Not Free Money
The 20% equity loan is a loan, not a grant. You will need to repay it, usually when you sell the property, remortgage or reach the end of the loan term. Because the loan tracks your home’s value, you may repay more than you borrowed if prices rise.
Interest Charges After the Initial Period
Once the interest-free period ends, you can expect to pay charges on the equity loan. Under Help to Buy, these fees increased each year. Make sure you factor these future costs into your long-term budget, not just the first few years.
New Build Homes Only
The scheme only covers new build homes from participating developers, which narrows your choice. If you would prefer an older property or a particular area without new developments, the scheme may not suit your plans.
Risk of Paying a New Build Premium
New build homes often cost more than similar existing homes. Industry experts have warned that directing buyer support into new builds could push prices higher, as happened under Help to Buy. It’s sensible to compare prices with similar resale homes nearby.
Less Protection Against Negative Equity
With only a 2.5% deposit, you would have a small buffer if house prices fell. New build homes can also lose some value once they are no longer new, which could make it harder to remortgage or move home in the first few years.
Price and Income Caps
Local price caps could limit the homes available to you, particularly larger family homes. Household income caps may also exclude some buyers. Until the Budget confirms these limits, it’s difficult to know exactly who will benefit.
Your First Home Scheme vs Help to Buy: What’s the Difference?
The new scheme has many similarities to the Help to Buy equity loan, which helped more than 350,000 buyers purchase new build homes between 2013 and 2023. However, there are some key differences based on the details announced so far.
- Deposit: Help to Buy required a 5% deposit, while the new scheme is expected to require just 2.5%
- Equity loan: both offer up to 20%, although Help to Buy offered up to 40% in London
- Income cap: Help to Buy had no income cap, while the new scheme will include one
- Price caps: both use price caps, but the new scheme will use local caps rather than regional ones
The final years of Help to Buy capped property prices at £224,400 in the North West. The government hasn’t announced caps for the new scheme yet, so we don’t know how far budgets will stretch in Manchester and the surrounding areas.
Is the Your First Home Scheme Right for You?
Whether the scheme is suitable will depend on your income, savings, future plans and the type of property you want to buy. It may suit buyers who have a steady income but have struggled to save a large deposit.
It may be less suitable if you plan to move again within a few years, would prefer an older home, or are unsure how you would repay the equity loan in the future. Thinking about your long-term plans now can help you avoid surprises later.
Other Options for First-Time Buyers
Your First Home isn’t the only route onto the property ladder. Depending on your circumstances, you could also consider
100% mortgages,
shared ownership mortgages or a standard 95% mortgage. A 95% mortgage would let you buy any type of property, new or old. MoneyHelper also has a useful overview of other
government schemes for first-time buyers.
How Manchester Money Can Help
At Manchester Money, we can help you understand whether the scheme could work for you once the full details are out. We’ll look at your income, deposit and wider circumstances before explaining the options available to you.
We can also compare the scheme with other first-time buyer options, such as a standard 95% mortgage or shared ownership, so you can make an informed decision. Our
First Time Buyer Guide is also a useful place to start if you’re new to the process.
If you’d like an idea of your budget in the meantime, you can try our
mortgage affordability calculator or read our guide on
how much mortgage you can afford.
Your First Home Scheme FAQs
When will the Your First Home Scheme launch?
The government hasn’t confirmed a launch date yet. We expect full details in the Autumn Budget on 28 October 2026, and reports suggest pre-registration could open by the end of 2026.
Can I use the scheme to buy an existing home?
No. Based on the details announced so far, the scheme is only available for new build homes from participating developers in England.
Do I have to pay back the equity loan?
Yes. The equity loan is not a grant, so you will need to repay it, typically when you sell the property, remortgage or reach the end of the loan term. The government has yet to confirm the full repayment terms.
Is the Your First Home Scheme available in Scotland and Wales?
The government has announced the scheme for England only. Scotland, Wales and Northern Ireland have their own housing policies and may offer different support for first-time buyers.
Will I still need to pass mortgage affordability checks?
Yes. You will still need a mortgage from a participating lender, and they will assess your income, outgoings and credit history in the usual way before deciding how much they are willing to lend.
Can a mortgage broker help with the Your First Home Scheme?
Yes. A mortgage broker can help you understand whether you’re eligible, compare the scheme with other options and find a suitable mortgage from a lender that supports it once the scheme launches.
Ready to Explore Your Options?
The scheme could make buying your first home more achievable, but it’s important to weigh up the pros and cons and understand the long-term costs before committing.
At Manchester Money, we can review your circumstances and help you explore the most suitable route onto the property ladder, whether that’s through the new scheme or another first-time buyer mortgage option.
Speak to Manchester Money Today
