A £4.7bn, five-year equity loan scheme for eligible first-time buyers of newbuild homes in England. Buyers will contribute at least 2.5%, Government will provide a 20% equity loan and a participating lender will fund the balance. Developer registration is expected by the end of December 2026, customer applications from February 2027 and first completions from April 2027.
Your First Home: the key details
Your First Home combines a minimum 2.5% buyer deposit with a 20% Government equity loan, reducing the conventional repayment mortgage to 77.5% of the purchase price. It is more tightly targeted than Help to Buy and introduces a progressive transaction fee for participating developers.
| Buyer | First-time buyer; main residence; household income up to £110,000 outside London or £140,000 in London. |
| Home | Eligible new-build in England, sold by a participating developer and within the applicable local price cap. |
| Funding | Minimum 2.5% deposit, 20% Government equity loan and repayment mortgage from a participating lender. |
| Cost to developer | Progressive fee on each scheme sale: 1% for homes 1-100; 3% for homes 101- 250; 4% above 250, resetting annually. |
Main features
- £4.7bn funding over five years, including £700m in 2027/28 and £1bn in each subsequent year.
- 20% equity loan linked to the value of the home: the amount repaid will normally rise or fall with the property value.
- Interest-free for years 1-5; interest at 1.5% in year 6 and 3% from year 7. Interest payments do not reduce the equity loan.
- Buyer deposit between 2.5% and 15%; affordability and credit checks will remain matters for participating lenders.
- The full list of price caps by local authority is to follow. Outside London, caps will apply at local authority level; published examples include Reading £375,000, Manchester £355,000, North Devon £320,000 and Middlesbrough £220,000. The London caps are £650,000 for Inner London and £500,000 for Outer London.
- Developers of all sizes may participate, subject to meeting the scheme requirements and entering into a participation agreement. Developer contribution fees, based on final sale price, will apply to homes sold using the scheme.
Implementation timetable
| Now - November 2026 | Developer readiness Plan ahead, undertake relevant modelling and appraisals, keep up to date with scheme developments (including details relating to local caps, participation requirements and the form of participation agreement). Please see our suggestions below regarding steps that can be taken now. |
| By end December 2026 | Registration opens Government expects first developer registrations and customer pre-registration. Developers will need a participation agreement. Detailed requirements are still awaited. |
| February 2027 | Customer applications First formal buyer applications are expected. Participating lenders, full eligibility rules and detailed application guidance are to be published before opening. |
| April 2027 | First scheme sales Government expects the first purchases under Your First Home to complete. |
What is currently required to sign up?
- The Government has confirmed that participating developers must meet the scheme requirements and enter into a participation agreement, but further details are awaited.
- The first developer registrations are expected by the end of December 2026, so we expect the necessary details to emerge shortly so that developers can familiarise themselves with the requirements and put in place the necessary participation agreement.
When can purchasers engage?
- Government customer pre-registration is expected before the end of December 2026. It will not commit the customer to a purchase, but is intended to provide further information on eligibility and applicable price caps.
- Formal customer applications are expected from February 2027, with first completions from April 2027.
Developer contribution and viability
The developer contribution applies to the final sale price of each home sold through the scheme. Volumes are counted annually and the bands apply progressively.
| Homes sold each year through the scheme | Fee | Illustrative fee on a £300,000 home |
|---|---|---|
| Homes 1-100 | 1% | £3,000 |
| Homes 101-250 | 3% | £9,000 |
| Homes 251+ | 4% | £12,000 |
Worked volume example
For 500 scheme sales at an assumed uniform £300,000 sale price, the progressive fee would be £4.65m in aggregate: £0.30m on the first 100, £1.35m on the next 150 and £3.00m on the remaining 250.
This is a modelling illustration, not a Government forecast.
Potential developer pressure points
Pre-launch buyer delay: Prospective first-time buyers who may otherwise have taken steps to get on the housing ladder may now defer doing so while they await the implementation of the scheme.
Margin compression: A 1%-4% scheme fee must be absorbed alongside build-cost inflation, sales incentives, finance costs, planning obligations, Building Safety Levy exposure and other site-specific burdens.
Viability and land value: If the scheme materially changes net sales receipts, residual land value may need revisiting, particularly for sites with a high first-time-buyer mix.
Caps set too low: It is imperative that local caps are set at an appropriate level that will ensure that ordinary local homes (that would typically form part of a developer’s product mix) fall within the scheme’s requirements and are not excluded. Until the full list of local authority caps has been published and there has been an opportunity to analyse the appropriateness of the level of those caps, there is a significant risk that the caps may be prohibitive to development proposals and developers could be deterred from constructing much needed homes, or the type of homes that there is local demand for, in a local authority where the cap is set too low.
Operational friction: New eligibility, lender, reservation, legal and drawdown checks and processes may extend the timescales to exchange or completion until systems and teams settle.
Funding allocation: Government says it will manage the allocation of available funding with developers. The details of how this will be managed in practice have not yet been published and may be a key consideration for developers intending to sign up to the scheme.
Customer affordability: A smaller deposit does not remove lender affordability tests or the later equity loan interest burden. Potential purchasers will still need to balance their interests in getting on the housing ladder with the medium-term implications of repaying the equity loan in addition to their mortgage with a participating lender.
Product and planning mix: Rebalancing future schemes towards cap-compliant smaller homes may require planning amendments and may not be viable on prospective development sites that are already within the planning cycle.
The opportunities for housebuilders
Wider first-time-buyer reach
The 2.5% minimum deposit and smaller repayment mortgage could bring forward buyers who are deposit-constrained but otherwise mortgageable.
Reservation and build-rate confidence
A clearer source of effective demand may support site-opening and build-rate decisions where qualifying product and local caps align.
Targeted scheme design
In the interim period, Developers can consider the potential impact of the property caps (once fully published) on sales rates, potential uptake in the scheme and viability for a prospective development and make necessary adjustments.
Potential output upside
While there are concerns around the impact in the short term of reduced reservations and sales until April 2027, the scheme could significantly boost sales volumes in the medium term.
Early-mover advantage
Developers ready for registration, lender engagement and customer communication may be better placed to convert pre-registered demand when applications open.
What developers could do now
- Model the developer contribution by site and group: Run sensitivities at 1%, 3% and 4% of final selling price, taking account of expected annual scheme volumes, product mix, incentives and local price caps.
- Revisit viability and land appraisals: Distinguish genuinely additional sales from transactions that would otherwise have completed without the scheme. Test the resulting assumptions against gross margin, return on capital, cash timing and residual land value.
- Map eligible stock: Overlay current and forecast plots against published/ example caps, buyer profile, anticipated legal completion dates and planning restrictions.
- Establish governance: Nominate legal, sales, finance, tax, treasury, IT/ data and customer-service leads and create a system for recording key details and decisions relating to the scheme.
- Prepare the legal workstream: Plan for review and negotiation of the participation agreement and the impact of the scheme requirements on plot sales documentation.
- Scenario-plan launch timing: Assess the pipeline impact if prospective customers delay on reservations or completions until the scheme is in operation. Decide how reservations, longstops and incentives should be managed during the transition.
- Prepare communications and training: Provide information now to prospective purchasers explaining how they could benefit from the scheme, set up uniform processes for dealing with enquiries relating to the scheme (including carefully caveated customer FAQs) and consider the training that will need to be provided to sales teams ahead of February 2027, when the scheme is expected to open for applications from prospective purchasers.
- Engage lenders and advisers: Monitor participating lender announcements and align legal, mortgage and sales processes early.
- Track Government publications: Update assumptions when details relating to the full local authority price cap tables, participation document and eligibility rules are published.
What remains outstanding/ other considerations
- Full local authority property price cap table outside London and confirmation of how caps will be maintained (and potentially adjusted) during the five-year scheme.
- Full buyer eligibility rules.
- Participating lender list and mortgage product requirements.
- Form of participation agreement, registration route and developer eligibility criteria.
- How the allocation of available funding with developers will be managed in practice.
- Detailed transaction process, timescales, authority-to-proceed arrangements, drawdown and completion requirements.
- Full equity loan repayment, valuation, staircasing, remortgage, sale and administration fee rules.
- Interplay with incentives, part exchange, assisted move, discounts, affordable housing and other public subsidy.
- Developer reporting, audit, record-keeping, data protection, customer-protection and breach/termination provisions.
- Tax and accounting treatment of developer fees and any interaction with revenue recognition or sales incentives.
- End-of-scheme arrangements.
Get in touch
If you would like to discuss the potential implications for your business and how to prepare, please get in touch with a member of Gateley’s Residential Development team.