Development
Your First Home: a welcome scheme, but London needs more than 20%
28 September 2026 · 4 min read
On 26 September, Andy Burnham confirmed a new equity loan scheme for first-time buyers, called Your First Home. Buyers will need a 2.5% deposit and can borrow 20% of the price of a new-build home, interest-free for an initial period. The detail is due in next month's Budget, and pre-registration should open before the end of the year. Two points are still unconfirmed: whether there will be an age limit, and whether there will be a cap on property value.
Outside London, this looks like good news for housebuilders. In London, the numbers are harder.
How Help to Buy handled London
The last version of Help to Buy, which ran from 2021 to 2023, lent up to 20% of a new-build price, or 40% in London, with buyers putting down at least 5%. The higher London rate is the reason the scheme worked in the capital. A bigger loan meant a smaller mortgage, and a smaller mortgage meant a lower income requirement.
As announced, Your First Home offers 20% everywhere. To see what that means in practice, take the average London first-time buyer price, which was £465,145 in May 2026. Rounding to £465,000 and assuming a lender offers about 4.5 times household income:
| Help to Buy (London, 2021–23) | Your First Home (as announced) | |
|---|---|---|
| Deposit | 5% (£23,250) | 2.5% (£11,625) |
| Equity loan | 40% (£186,000) | 20% (£93,000) |
| Mortgage needed | 55% (£255,750) | 77.5% (£360,375) |
| Household income needed (approx.) | £57,000 | £80,000 |
On those assumptions, a buyer needs around £80,000 of household income under the new scheme, compared with about £57,000 under the old London terms. The lower deposit will help, but in London the deposit is usually the smaller problem. The mortgage is what stops people buying.
That average also covers all first-time purchases, most of them second-hand. New-build homes usually cost more, so for many London developments the income gap will be wider than the table shows. Without a higher London rate, a lot of the capital's new-build stock will be out of reach for the buyers the scheme is meant to help.
Will there be a price cap?
Under the previous scheme, eligible London homes were capped at £600,000. If the new scheme has a cap, and especially if it is set nationally, it could rule out even more London homes.
What developers can do before the Budget
If you are launching or selling over the next few months, expect some first-time buyers to wait for the scheme to open, and keep a close eye on reservations. Once a cap is announced, look carefully at anything priced just above it, as those homes may become harder to sell to first-time buyers.
For schemes still at design stage, the numbers point towards smaller homes at lower price points if first-time buyers are the target market. And because equity loan purchases take longer and involve more parties, it helps to have a sales team that knows the process well.
A smaller deposit will make a difference for some London buyers. But a 20% loan won't go far where the average first-time buyer is paying over £465,000. Help to Buy had a London rate for good reason, and we hope the Budget brings one back.
We'll write again once the details are published. If you'd like to talk through what the scheme could mean for a particular development, get in touch.