Government announces Your First Home: 2.5% deposits and a 20% equity loan for first-time buyers of new builds in England

The Ministry of Housing, Communities and Local Government announced on 26 September a new equity loan scheme for England, Your First Home, under which first-time buyers could put down a 2.5% deposit and borrow up to 20% of a new-build home's value through a government-backed loan with an initial interest-free period. Because the loan cuts the mortgage needed to around 77.5% of the price, buyers would move out of 95% loan-to-value lending and into cheaper rate bands, which is where the government says the monthly saving comes from. For buyers without family help, this could bring a new-build purchase within reach, although the scheme is not open yet and some may pause their search until it is; for sellers of existing starter homes, it adds competition for first-time buyers from participating developers. Household income caps, local price caps and the scheme's cost are still to be confirmed at next month's Budget, and it covers new builds only, so the second-hand market gets no direct support.