First-time buyers in England will be able to borrow 20% of the price of a new-build home from the government, interest-free for five years, under the Your First Home scheme announced in the Budget on 28 October. In London the price caps are £650,000 in inner London boroughs and £500,000 in outer London, and household income is capped at £140,000. The first homes are due to be bought under the scheme from April 2027.
The scheme is worth £4.7 billion over five years, and the government expects it to help around 70,000 households.
How the loan works
- New-build only. The home must be a new home from a participating developer; existing homes are not eligible.
- The loan. The government lends 20% of the price. The buyer needs a deposit of at least 2.5% and a repayment mortgage from a participating lender; press reports put the maximum deposit at 15%.
- Interest. None for the first five years, then 1.5% in year six and 3% from year seven, paid separately from the loan.
- Repayment. The buyer normally repays 20% of the home's value at the time, on sale or earlier, based on an independent valuation. If the home has risen in value, so does the amount owed.
- Who qualifies. Buyers will normally need to be first-time buyers and the home must be their main residence. Full eligibility rules are due before applications open.
What it means in London
Unlike the old Help to Buy scheme, which lent up to 40% in Greater London from 2016, Your First Home lends 20% everywhere. On a £600,000 new flat in an inner London borough, that is a £120,000 loan; with a 5% deposit of £30,000, the buyer would need a mortgage of £450,000.
Official figures put the average price paid by first-time buyers in London at £473,051 in August 2026, 2.4% lower than a year earlier. That average covers all types of home, not only new-builds, but it suggests that many London first-time buyers fall within the caps. Price caps for each local authority are to be published.
The timetable
- By the end of December 2026: pre-registration for buyers opens, with guidance and developer registration. Pre-registering does not commit a buyer.
- From February 2027: first applications.
- From April 2027: first purchases.
Still to be published are the participating lenders and developers, the full list of price caps, and the detailed rules on repayment and fees. The scheme is due to be reviewed in autumn 2027.
Saving for a deposit
The Budget also announced a First Time Buyer ISA to replace the Lifetime ISA for new savers from April 2029, with a 25% government bonus capped at £20,000 on a first home costing up to £450,000. From 29 October, the charge for using a Lifetime ISA towards a home above £450,000 fell from 25% to 20%, which matters in London where many homes cost more.
For sellers and landlords
Because the scheme applies only to new-build homes, it does not help a first-time buyer purchase an existing flat or house. Sellers of second-hand homes in the same price range may find some first-time buyers drawn towards new developments from next spring, which is worth bearing in mind when pricing a launch. None of this is financial advice; buyers should take mortgage advice before committing.
Dolce Vita handles sales and lettings across the UK from Mayfair, and helps clients buy abroad through partner agencies. If you are selling a home in this price range, or moving on from your first, Request a valuation; we acknowledge the same working day and return a written valuation within 24 to 48 hours.
Hanane Dawson, Founder
Sources: Ministry of Housing, Communities and Local Government, "Your First Home", 28 October 2026. gov.uk, "New first-time buyer scheme to be confirmed at Budget", 26 September 2026 (updated 20 October 2026). Mortgage Solutions, "Your First Home available up to £650,000: details revealed", 28 October 2026. MoneySavingExpert, Your First Home, 28 October 2026. Propertymark, Budget 2026 summary, 28 October 2026. gov.uk, Help to Buy equity loan scheme statistics to 31 May 2023. HM Land Registry and ONS, UK House Price Index for England, August 2026, published 21 October 2026. HM Treasury, Budget 2026: overview of tax legislation and rates, paragraphs 2.3 and 2.4, 28 October 2026.