The new 2.5% deposit scheme: what it means if you're selling

What is the Your First Home scheme?

Your First Home is a government equity loan scheme for first-time buyers in England, announced by the Ministry of Housing, Communities and Local Government on 26 September 2026. An equity loan is a loan of a share of a home's price that is repaid as the same share of the home's value when you sell or pay it off. Under this scheme the buyer puts down 2.5%, the government lends up to 20%, and a mortgage covers the rest.

The loan starts with an interest-free period, and the government says buyers could save hundreds of pounds a month compared with a 95% mortgage. Developers who sign up will be expected to contribute towards the cost, and support is aimed at buyers without family money behind them.

Can my buyer use the scheme to buy my house?

No, not if your home is an existing property. The scheme is limited to new-build homes sold by developers who sign up to it, so it cannot be used on a resale home. A first-time buyer who has already offered on your home cannot move this support onto your property.

If your buyer mentions it, the calm reply is that it is for new builds only and has no start date yet. A buyer who walks away from a home they have chosen is swapping it for a scheme with no price caps, no income limits and no launch date published.

Will the scheme affect house prices where I am selling?

It could at the margins, mostly close to new-build sites. New builds already sell at a premium: in May 2026, the latest month published for this split, the average UK new-build price was £369,759, up 8.1% in a year, against £267,183 and 2.7% for existing homes.

Industry voices raised the obvious risk within two days. Rob Houghton, chief executive of reallymoving, pointed to his firm's 2019 research finding that first-time buyers using Help to Buy paid 10.3% more for new builds, and warned that channelling buying power into one part of the market could inflate prices there.

For a seller of an existing home, the realistic effect is extra competition rather than lost value. Some first-time buyers will now look at a subsidised new build as well as your home. You can still sell to any buyer, including movers, cash buyers and first-time buyers with their own deposit, and your price is not bound by a cap.

What should I do if I am selling a home first-time buyers can afford?

1. Price from recent resales of similar homes on your own street, not from new-build list prices.
2. Check what a first-time buyer can borrow today, so your asking price sits inside a realistic budget.
3. Do not rush to list before the Budget, or delay because of it. The caps are unknown until 28 October, and a sale timed to your own plans beats one timed to a headline.
4. If you bought your home new with Help to Buy, read how the equity loan is repaid on a sale before you set a price.
5. Get more than one valuation before you commit to an agent.

ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents. It is free, always, and your details stay with you until you choose to connect, so you can see where your home sits in today's resale market before a new scheme changes the conversation.

A new scheme changes who is shopping. It does not change what your home is worth on your street today.

What does it mean if I am buying?

If you are a first-time buyer looking at new builds in England, it may pay to see the Budget detail before you commit, because the price and income caps decide who qualifies. If you are buying an existing home, nothing changes: the scheme cannot be used on resale homes.

An equity loan is repaid as a share of the home's future value, so if prices rise you repay more than you borrowed. Help to Buy worked the same way, and 387,195 homes in England were bought with it between April 2013 and May 2023.

How is Your First Home different from Help to Buy?

Common questions about the 2.5% deposit scheme