Your First Home: The New Equity Loan Scheme for First-Time Buyers

The government has announced Your First Home, a new equity loan scheme for first-time buyers in England. Full details are due in the Budget on 28 October.

What we know so far: buyers will need a 2.5% deposit, and the government will lend a further 20% of the price through an equity loan with an initial interest-free period. It applies only to new-build homes from developers signed up to the scheme. A household income cap and local price caps are still to be set.

Developers will pay a contribution to join, linked to property values. The level, the launch date and whether there is any minimum development size are still to be confirmed. Pre-registration is due to open by the end of the year.

This is a different scheme from First Homes. First Homes sells homes at a discount of at least 30%, secured through Section 106 as part of a site’s affordable housing. Your First Home is an equity loan on open-market new-builds, and so far it has no link to planning obligations.

For housebuilders, this means demand. New-build sales have been held back by rising construction costs, and a smaller deposit opens the market to buyers who can manage monthly payments but can’t save 5 or 10%.

Three things we’ll be watching at the Budget:

Where the local price caps sit, as this will shape unit mix and specification.
The size of the developer contribution, and whether it works for smaller builders.
How the scheme avoids the price inflation seen in some areas under Help to Buy.

If you’re weighing up a residential site in light of the scheme, we’re happy to talk it through.