New first-time buyer scheme to be confirmed at Budget

[sbplanet]

"The government has today (Saturday 26 September 2026) announced a new equity loan scheme - Your First Home - in England will be confirmed at next month’s Budget, to support more people into homeownership.

This is expected to support 2.5% deposits, backed by 20% government-backed equity loans, for prospective first-time buyers purchasing a new-build property from a developer signed up to the scheme.

People will be able to access equity loans with an initial interest free period, meaning that those who use the scheme could save hundreds of pounds per month compared to a 95% mortgage.

The Your First Home scheme will help tackle the deposit barrier for first-time buyers who would be unable to afford their first home otherwise, building on the government’s existing work to help more young people and families onto the housing ladder. The scheme will also set a household income cap with local property price caps to further ensure support is targeted at those who need it, the detail of which will be set out at Budget.

With the new build housing market currently facing challenging headwinds driven by international economic pressures and rising construction costs, the scheme will also act as a much-needed stimulus to support the market and boost housing supply.

Developers will be expected to make a contribution when signing up to the scheme to help cover costs.

Further details, including costs and implementation timelines, will be announced by the Chancellor at the Budget next month. "

https://www.gov.uk/government/news/new-first-time-buyer-scheme-to-be-confirmed-at-budget

I am old enough to remember when my mortgage went up from 7.5% to 14.5% in a matter of a few months (1992). I was lucky that I’d had a big hike in salary.

A couple of years later, when DH and I were househunting we saw so many “repo houses” where the departing owners had trashed the kitchens and bathrooms.

Terrible decision by the government. Loading more debt onto the national finances. A previous poster said this money would be better spent investing in building social housing. I agree.

2 bed flats are £395,000 - £500,000

But does anyone build social housing at all these days?
I think developers just give certain % of newly built flats to council to house council tenants, thus the council doesn’t have to maintain the building etc.
So if they don’t build new homes, social housing stock doesn’t grow either

I googled. A double room is around 750 a month in my town, not London, though commutable to London. I am gobsmacked

I'm really pleased to hear that the scheme has worked out for some people.
I think part of that was the timing (time of rising house prices which is unlikely in the nearish future), one poster was able to very sensibly save ££ as the mortgage was cheaper than local rent (not always the case, especially not now), interest rates were low (not so now and unlikely in 5-6 years), minimum deposit was 5%, not 2.5%. I see this new one going badly for most buyers.

The Australian government introduced a similar scheme towards the end of 2025 with a 5% minimum deposit. A lot of those buyers are now in negative equity as the property market has fallen in 2026 and is likely to continue to do so. Very bad timing for these poor people.

If it’s not a Uni town, it may be because that’s how much housing benefit covers for a room in your town. If not for free money, rent would be half of what it’s now.

There something not right about taxpayers money being used to outbid the taxpayer in a scramble for a resource.

Private renters: Around 19% of households (roughly 4.7 million households) rent from a private landlord.
Social renters: Around 16% of households (roughly 4.1 million households) live in social housing, such as council housing or a housing association.

At the same time,
Approximately 1.6 million claims (specifically around 1.59 million legacy Housing Benefit claimants) receive traditional Housing Benefit in Great Britain, while an additional 3.7 million households receive housing cost support through Universal Credit.

So 62% of the renters don’t pay full rent out of their pocket, while inflating prices for self-paying minority. Not ideal.

Yes, as many posters have said, the landlords and property developers are being bank rolled by the tax payer. Housing costs would come down sharply if the government put in some proper controls rather than using taxpayer money to make rich people even richer.

It’s really stupid.

Why are we encouraging FTB into new builds?

I don"t believe that he can"t get cheaper accommodation, sorry, even if it means a longer commute/driving there is nothing cheaper?

What happens when the 20% interest free stops and they have to add that to the mortgage? Sounds like another disaster waiting to happen probably after Labour is voted out so they won't have to deal with it.

I think it's great news. For the developers. Are they donating to Labour too now? Obviously it's not great for any unwitting buyers and I hope anyone considering the scheme does some research. They won't need to do much to know to stay away!

I'm not sure how easy it will be to get a mortgage anyway as presumably lenders will also be rather worried about the very high likelihood of negative equity and not getting their money back. Unless the government forces them of course, which with this lot is definitely not beyond the realms of possibility. We really will be back to Labour's glory days, with a full financial crash.

Anyone still want to claim they're not entirely incompetent? And we've not even had the budget yet...

Yes - it’s £1K a month average in London all inclusive, £800 for Bristol and £700 in Manchester, sharing with more than one person. So not at all “insane” and doable if you’re on the median salary or even not quite there.

The point I am making is that "owning" a home with mortgage debt is not a milestone, and with the HTB/SO schemes it quickly becomes a millstone, being cash/investment rich or having a large cash cushion, or saving 1500 a month because you moved back to your Mum"s house (like someone I knew) is something to aspire to IMO, if that means blanking out the mortgage sales propaganda about "moving on with your life" Yadda Yadda Yawn etc. then so be it, hopefully more people will be able to see through the B.S this time around.

They must have been really angry to do that?

https://www.thisismoney.co.uk/money/mortgageshome/article-16026941/Sales-London-new-build-homes-drop-sharply-time-buyers-investors-buying.html

lol that’s a mental article…

I can’t believe someone wrote this sentence with a straight face…

Someone moving to a £1.6 million house in London would have to stump up £105,750 in stamp duty even if it was their first or only home.

@KeepPumping

And sorry took me a moment to process that lol 😂

To the point of to line developers pockets… yes that’s obvious. But what’s the effect of encouraging ftb into new builds.

Thats what I am thinking about.

To me ftb are useful to keeping our old house stock ticking. No one’s doing a top to bottom Reno on an entry level terrace standard old brick unless you see it as your forever home. FTB are useful as they come for 5 years. Do their bit (whether that’s electrics, windows, flooring, bathroom etc) and move on. They don’t do it all. And that works.

Yes, almost like the writer was on Acid, or maybe just a heavily invested vested interest? There are literally dozens of these articles if you search "New Build Sales collapse". One thing for sure, AB has been taking lots of calls from bankers and developers recently, hopefully the bond market does what is needed this time though.

Yes, but it only works at present prices if interest rates drop back to zero, otherwise it doesn"t work, look up recent mortgage approvals for evidence. Also remember that the average person now has probably zero DIY skills, there are exceptions but I have found them to be few, little skill or interest in renovation and no cheap credit to buy up all these ex-rental flats etc. just means more and more people opting out of the market.

Why are the government so desperately wanting to make sure young people are in as much debt as possible?

Many young people are graduating university in over £50k student loan debt. They get a graduate level job and pay hundreds of pounds a month in student loan repayments. Can’t afford to buy a home, can barely afford to rent. Now the government want them to get even more in debt with another loan for a house deposit, on top of the mortgage they’ll need.

We need a government to make common sense decisions though to move the country forward and Labour and Burnham are just not capable of fixing anything.
We need Labour out now.
The only way to fix the housing market for younger people is to cut house prices and cost of living. This is another ridiculous policy not fixing the issue.

A heavily indebted population is a population that will never strike or riot.