A £6,250 deposit on a £250,000 flat sounds almost too good to be true. That is the headline arithmetic behind "Your First Home," the government's new low-deposit scheme, and for thousands of first-time buyers eyeing new-build developments across Wimbledon, Merton and the wider South West London corridor, tomorrow's Budget could change the maths on their biggest purchase. But before anyone signs a reservation form, there is a lot still unconfirmed, and some real risks that no press release mentions.
Chancellor John Healey will deliver the Autumn Budget on Wednesday 28 October 2026, and the Your First Home scheme Budget 2026 announcement is expected to fill in the gaps left since the scheme was first unveiled on 26 September 2026. Here is what buyers actually need to understand.
Key Takeaways
- The Your First Home scheme Budget 2026 is expected to offer first-time buyers a 2.5% deposit, a 20% government equity loan, and a 77.5% mortgage on new-build homes in England only.
- Household income caps are expected at £110,000 outside London and £140,000 in London, but price caps and the interest-free period length are still unconfirmed.
- Repayment is based on a share of the home's value, not a fixed cash amount, meaning buyers' liability can rise or fall with local price movements.
- New-build homes already carry an average £78,000 premium over existing homes (ONS, June 2026), so overpaying risk is real even before adding a low-deposit loan structure.
- An independent RICS snagging inspection and new-build survey, not relying on the developer's own checks, is essential protection when equity and deposit are this small.
What Is Confirmed So Far
Before the Budget, only broad outlines of Your First Home have been published. Confirmed elements include:
- Deposit: At least 2.5% of the purchase price.
- Equity loan: 20% of the price, provided by government.
- Mortgage: The remaining 77.5%, arranged through a participating lender.
- Eligibility: First-time buyers only, buying new-build homes from developers that opt into the scheme.
- Geography: England only. Wales retains its own Help to Buy, Wales scheme until 31 March 2027.
- Income caps (expected, not yet finalised): £110,000 outside London, £140,000 inside London.
Worked Example
- Buyer deposit (2.5%): £6,250
- Government equity loan (20%): £50,000
- Mortgage (77.5%): £193,750
Your First Home Scheme Budget 2026 vs Help to Buy
Comparisons with the now-closed Help to Buy (England) scheme are inevitable. Here is how the two stack up based on currently available information.
| Feature | Help to Buy (closed 2023) | Your First Home (expected) |
|---|---|---|
| Deposit | 5% | 2.5% |
| Equity loan | 20% (40% in London) | 20% (London share unconfirmed) |
| Income cap | None | £110,000 / £140,000 (expected) |
| Interest-free period | 5 years | Reportedly 5 years (unconfirmed) |
| Interest after free period | 1.75% from year 6 | Not yet confirmed |
| Property type | New-build | New-build only |
The lower deposit is the headline change, but a smaller deposit also means a smaller buffer against price falls, a point worth sitting with before reserving a plot.
What Remains Unconfirmed Ahead of the Budget
Several critical details are still missing, and buyers should treat anything beyond the basic structure as provisional until Wednesday's statement:
- Price caps by region or borough
- Length of the interest-free period (five years is reported but not confirmed)
- Interest rate charged after the free period ends
- Repayment rules, how the equity share is calculated and repaid
- Launch date, though pre-registration is expected by the end of 2026
- Developer contribution towards scheme costs
- Whether London gets a 40% loan, mirroring old Help to Buy terms
- Lifetime ISA interaction with the new scheme
Until these are published, estimates like the £250,000 example above remain illustrative rather than guaranteed.
Why Repayment Structure Matters More Than the Headline Deposit
The equity loan is not a fixed debt, it is a percentage share of the home's value at the time of repayment or sale. If a £250,000 home rises to £300,000, the 20% share becomes £60,000, not £50,000. If the home falls in value, the government's share falls too, but so does the buyer's equity, and with only a 2.5% deposit, that cushion is thin.
This is where recent ONS and Zoopla figures matter. ONS data for England (June 2026) shows:
- New-build average price: £367,000, up just 0.2% annually and down 8.3% between May and June
- Existing homes average: £289,000
- New-build premium: roughly £78,000 above existing stock
Zoopla's 27 October 2026 analysis adds that London prices fell 1% with 85% of postcodes recording declines. A buyer stretching into a new-build premium with a 2.5% deposit in a softening market faces a real risk of negative equity if prices dip further before they build up equity through repayment or price growth.
"The Chancellor must avoid repeating past demand-stimulating schemes that pushed prices out of reach," warned Verona Frankish, CEO of Yopa, commenting ahead of the Budget.
Andy Morrison, also quoted in London Property News, framed the real test differently: whether the scheme improves viability for bringing more new homes to market, rather than simply fuelling demand for existing new-build stock.
Developer Incentives and Why Independent Valuation Matters
Developers who sign up to Your First Home are expected to contribute towards its cost, though exact figures are unconfirmed. That contribution creates an incentive: developers benefit from higher headline sale prices, because the scheme's equity loan is based on the purchase price, not an independent valuation.
This is precisely where South West London buyers need caution. A new-build premium already averages £78,000 nationally. Layering a government-backed equity loan on top of an inflated asking price can lock buyers into paying more than a property is genuinely worth, a risk that becomes painful if the market softens, as recent Zoopla figures for London suggest is already happening.
Before You Reserve: Practical Steps for SW London Buyers
- Do not rely on the developer's own snagging checklist or in-house inspection. It is not independent.
- Commission an independent new-build survey or RICS Level 2/3 snagging inspection before legal completion, ideally during the reservation period and again at key construction stages.
- Request comparable sales evidence for existing homes nearby to sense-check the new-build premium being charged.
- Model a price-fall scenario, what happens to the equity loan and your deposit if values drop 5-10% in the first two years.
- Wait for Budget confirmation of price caps and interest terms before signing anything binding, where possible.
- Check Lifetime ISA compatibility once rules are published, since stacking benefits may not be permitted.
FAQ
When does the Your First Home scheme Budget 2026 announcement happen?
Full details are expected in the Autumn Budget delivered by Chancellor John Healey on Wednesday 28 October 2026.
Is Your First Home available in Wales or Scotland?
No. It applies to England only. Wales continues to run its own Help to Buy, Wales scheme until 31 March 2027.
Is the deposit really just 2.5%?
That is the expected minimum buyer deposit based on announcements so far, though final terms are confirmed only at the Budget.
Does the scheme cover existing homes?
No. It is expected to apply only to new-build homes from developers who opt into the scheme.
Why should buyers get an independent survey if it's a brand-new home?
New-build homes commonly have snagging defects, and developer contributions to the scheme create a financial incentive to maximise sale prices. An independent RICS inspection checks build quality and value separately from the seller's interests.
What is the biggest risk with a 2.5% deposit?
A small deposit offers little buffer against price falls. If property values drop, buyers risk negative equity faster than with a traditional larger deposit.
Conclusion
The Your First Home scheme Budget 2026 announcement promises to lower the deposit barrier for first-time buyers, but the scheme's full shape, price caps, interest terms, repayment rules, will not be clear until Chancellor John Healey speaks on 28 October. South West London buyers eyeing new-build homes in Wimbledon and surrounding areas should treat the scheme as a potential opportunity, not a guarantee of value. Before reserving any plot, commission an independent RICS snagging inspection and new-build survey, stress-test the equity loan against a falling market, and wait for confirmed terms rather than relying on developer marketing. A smaller deposit is only good news if the underlying home is genuinely worth what you are paying.