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October 14, 2026
At HomeOwners Alliance, we have welcomed the potential of the government’s proposed Your First Home scheme but we believe it must not repeat the mistakes of Help to Buy.
Under the proposals, eligible first-time buyers in England could purchase a new-build home with a deposit of just 2.5%, supported by a government-backed equity loan of up to 20%. Further details are expected in the Autumn Budget.
The proposed scheme addresses a problem we hear about repeatedly: people who could afford monthly mortgage payments but cannot save a large deposit while paying rent.
It could bring ownership closer for households without help from the bank of mum and dad.
The scheme could also encourage more housebuilding by giving developers greater confidence that buyers will be there when properties are completed.
We also welcome proposals requiring participating developers to contribute towards the scheme’s costs.
While Help to Buy helped hundreds of thousands of people purchase homes, there are important lessons for the government.
An independent government-commissioned evaluation found that 46% of Help to Buy customers said they could not have bought a home without the scheme.
However, it also found that Help to Buy customers paid around 1% more than buyers of comparable new builds, while new-build homes themselves cost around 5.5% more than comparable existing properties during the period studied.
Looking ahead to this proposed scheme, government support must not become an excuse for developers to charge buyers more.
We are also calling for the government to consider extending the scheme beyond new-build homes. There is a strong consumer case for considering existing properties. It would give buyers more choice over location, property type and price, and could help them avoid a new-build premium.
We do question whether the proposed scheme will do enough to help first-time buyers in London.
While the previous Help to Buy scheme offered an equity loan of up to 40% in London, Your First Home is expected to offer 20%.
With the average London first-time buyer paying around £467,000 in July 2026, a 2.5% deposit would be approximately £11,700. However, the buyer would still need a mortgage of around £362,000.
At an illustrative borrowing limit of 4.5 times income, that would require a household income of approximately £80,000.
The proposed income and property price caps must reflect actual local new-build prices and realistic mortgage affordability.
Otherwise, buyers could qualify for the scheme but still be unable to afford an eligible property.
Another concern is the risk of negative equity, particularly for buyers of new-build flats putting down very small deposits.
With a deposit of just 2.5%, even a relatively small fall in property value could wipe out a buyer’s initial stake.
The latest available figures show that London flat and maisonette prices fell 6.6% in the year to July 2026.
High service charges, building safety concerns and restrictive lease terms could also leave buyers struggling with costs or finding it difficult to sell or remortgage.
As a result, we believe that helping people buy flats while leaving wider leasehold problems unresolved would be short-sighted.
If you’re a prospective buyer, you should explore all your options rather than assume you must wait for Your First Home to launch.
There are already mortgage products available for eligible buyers who are struggling to save a deposit, including 100% mortgages for some renters and family-assisted mortgages.
It’s important to compare the overall costs of buying through different routes, including mortgage repayments, equity loan charges, service charges and maintenance costs.
Buyers considering flats should also ensure their conveyancer examines the lease, service charge accounts, planned major works and building safety information.
We believe that Your First Home could make a positive contribution to helping people onto the property ladder, but its success must be judged by more than the number of new-build homes sold.
The government needs to ensure the scheme offers genuine value for money, protects buyers from excessive costs and does not simply increase housebuilders’ profits.
Making home ownership more accessible is an important goal. But buyers must be able to afford their homes in the long term, not just the deposit needed to get through the door.
I’ve shared my views on the scheme in the national media, including writing for What Mortgage and contributing to The Observer. Please get in touch if you would like to discuss further at press@hoa.org.uk
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