A new scheme to support first time buyers is to be introduced at the upcoming budget set to take place on Wednesday 28 October 2026. A Ministry of Housing, Communities and Local Government (MHCLG) announcement over the weekend confirmed a new equity loan scheme would be introduced in England by chancellor John Healey in the Autumn budget.
Your First Home would support 2.5% deposits, backed by 20% government-backed equity loans, for prospective first-time buyers purchasing a new-build property from a developer signed up to the scheme. The scheme would offer access equity loans with an initial interest free period, with the government saying it would enable those who used the scheme to “save hundreds of pounds per month compared to a 95% mortgage.”
The government added: “The Your First Home scheme will help tackle the deposit barrier for first-time buyers who would be unable to afford their first home otherwise, building on the government’s existing work to help more young people and families onto the housing ladder. The scheme will also set a household income cap with local property price caps to further ensure support is targeted at those who need it, the detail of which will be set out at Budget.”
Concluding the announcement the government said the scheme would “act as a much-needed stimulus to support the market and boost housing supply.” Earlier this month housing secretary Angela Rayner admitted there is only “a slim chance” the government will meet its target of building 1.5 million new homes within this parliament. The government have acknowledged the new build housing market faces “challenging headwinds driven by international economic pressures and rising construction costs”. According to the latest English Housing Supply update from Savills, 202,7000 homes were built in the year to Q2 2026, reflecting only a 0.4% rise compared to the last quarter. As a result Savills predicts housing delivery will remain static and well short of the 300,000 new homes needed each year to meet the 1.5 million target.
Further details on costs and implementation timelines will be announced by the Chancellor at the Budget next month although it is understood developers will be expected to make a contribution when signing up to the scheme to help cover costs.
A further housing announcement over the weekend will see reform of Empty Dwelling Management Orders (EDMOs) which enable councils to take over the long term management of empty properties, returning them to occupation for up to seven years while ownership remains with the property owner.
The changes will see the current two year period a property must be empty before it becomes eligible for an EDMO reduce to six months. The government say the reforms will allow councils to act sooner where homes have been left vacant and preventing properties from falling into serious disrepair.
Industry Reaction
Solange Chamberlain, CEO Retail Banking, NatWest Group said: “We welcome the Government’s commitment to helping more people onto the property ladder and support the introduction of the new ‘Your First Home’ scheme. Making home ownership more accessible can create opportunities for aspiring buyers, unlock housing market activity and support economic growth across the UK.
“Supporting first-time buyers has long been a priority for NatWest. As one of the UK’s largest mortgage lenders, we already help thousands of customers buy their first home each year and stand ready to support the delivery of this scheme. Together, we can help more people realise their ambition of owning a home.”
Emma Toms, Chief Executive of the New Homes Quality Board: “Support to help people buy homes is welcome, but it is critical that all new homes are built to a high standard. The government has already made an important commitment to creating a statutory new build quality code. It should now introduce it urgently, ensuring taxpayer-backed homes are covered by consistent, universal requirements that safeguard buyers and shore up market confidence.”
Rob Houghton, founder and CEO of reallymoving: “This will be exciting news for the many first time buyers out there struggling to raise a deposit without financial help from their families. Our research found it takes the average First Time Buyer in England almost a decade to save enough to get on the housing ladder, including moving costs, and that’s assuming they can put aside 10% of their earnings every month.
“The Your First Home scheme will bring the possibility of home ownership within reach far sooner. A 2.5% deposit on the average first time buyer purchase price in England of £250,000 would be just £6,250 – an amount some will already have saved. Suddenly the dream of home ownership isn’t so far away.
“There is a risk, however, that boosting the buying power of first time buyers and channelling it into just one part of the housing market could artificially inflate prices. Our research in 2019 found that First Time Buyers in England using the old Help to Buy scheme paid 10.3% more for their new build home compared to those buying new builds without the scheme. As buyers with limited means to raise a deposit were funnelled into the scheme, unable to consider other options, developers had scope to charge higher prices.”
