A new government-backed scheme has been announced which could make buying a first home more achievable for people struggling to save a large deposit.
The proposed Your First Home scheme would allow eligible first-time buyers in England to purchase a qualifying new-build property with a deposit of as little as 2.5%, alongside a government equity loan of up to 20% of the property value.
For example, on a £400,000 property, a 2.5% deposit would be just £10,000. A 20% equity loan could contribute a further £80,000, leaving the remaining amount to be funded through a mortgage.
For many buyers across London, the biggest obstacle isn’t necessarily affording the monthly mortgage payment — it’s saving the deposit in the first place. If introduced as proposed, this scheme could significantly reduce that initial hurdle.
There are some important restrictions. The scheme is expected to apply to new-build homes, with household income limits, property price caps and limits on buyers’ existing savings. The final eligibility rules have not yet been published and are expected to be confirmed as part of the Budget.
For East London buyers in areas such as Stratford, Newham, Leyton, Leytonstone and Forest Gate, the eventual London property-price cap will be particularly important given the higher cost of new-build homes in the capital.
The scheme has similarities to the former Help to Buy programme, although the government says the new version will be more targeted towards buyers who genuinely need support getting onto the property ladder.
At Lyss Homes, we work with first-time buyers across London, including buyers exploring shared ownership and other routes into home ownership.
If you’re thinking about buying your first property, getting your finances and mortgage position reviewed early can put you in a much stronger position when the right home becomes available.
Thinking of buying your first home? Get in touch with Lyss Homes to discuss properties currently available.