Your First Home scheme: what it means for first-time buyers in 2027
Getting a foot on the property ladder just got easier for tens of thousands of people. The government's Your First Home scheme, backed by £4.7bn of funding over five years, is designed to help 70,000 households buy their first property without relying on parental financial support. If you've been frustrated by deposit requirements and monthly mortgage payments, this could be worth understanding in detail.
The scheme essentially offers a different route to homeownership compared to traditional mortgages. Instead of needing a substantial deposit upfront, eligible buyers can access a government-backed equity loan covering 20% of the purchase price. For the first five years, this loan costs nothing to service. That interest-free period could save buyers hundreds of pounds each month compared to what they'd pay on a standard mortgage.
How the numbers work
Let's say you're buying a new-build home for £250,000. Traditionally, you'd need a 5% to 10% deposit (£12,500 to £25,000) plus thousands more in legal and surveying fees. Under Your First Home, you'd put down just 2.5% (£6,250), the government loan covers £50,000 (20%), and you'd take out a mortgage for the remaining £193,750. Your monthly outgoings during those first five years would be noticeably lighter because that £50,000 chunk isn't accruing interest.
At current mortgage rates (around 5.13% for five-year fixed deals), this structure makes a meaningful difference. On a £193,750 mortgage at 5.13%, you're looking at roughly £1,040 per month over 25 years. Add the interest-free loan, and the scheme's savings claim begins to make sense.
Who's actually eligible
This isn't a free pass for everyone wanting to buy. The government has deliberately built in safeguards to prevent those who can already afford a home from taking advantage.
First, there's a household income cap. Outside London, your combined household income must be £110,000 or less. Within London, it rises to £140,000. These figures apply to everyone in your household, not just the mortgage applicant.
Second, there are property price caps that vary by local authority. Inner London homes must be under £650,000, while outer London properties have a £500,000 ceiling. Other regions have their own limits. Reading, for example, caps at £375,000. The government will publish a full list of local caps soon, so it's worth checking what applies to your area before getting your hopes up.
Third, crucially, the scheme only applies to new-build properties. If you're hoping to buy a Victorian terraced house, a 1970s semi, or any existing stock, you won't qualify. Participating developers will offer the loans directly, so you'll need to buy from their developments.
The timeline: what happens next
The scheme moves in phases. Customer pre-registration opens by the end of December 2026. From February 2027, formal applications start. The first loans should be issued from April 2027 onwards. If you think you might qualify, registration early in that window could make sense.
It's worth noting that this is an England-only scheme. Scotland, Wales and Northern Ireland have their own devolved housing policies, and it's not yet clear whether they'll launch equivalent programmes.
A practical word of caution
The scheme is genuinely helpful, but it's not a silver bullet. After five years, the equity loan starts accruing interest. You'll need to be comfortable with that transition and plan accordingly. Also, because you're only putting down 2.5%, lenders might scrutinise your finances more carefully than they would with a larger deposit.
Competition from other first-time buyers will also be intense. Places with lower property price caps in desirable areas will attract more applications. Starting your pre-registration as soon as it opens in December could give you a competitive edge.
For the 70,000 households this scheme is designed to reach, it represents a genuine shift in how they can access homeownership. If you've been stuck in the renting trap, unable to save enough deposit despite healthy earnings, it's absolutely worth checking your eligibility.