For many aspiring homeowners, saving enough for a deposit remains one of the biggest barriers to getting onto the property ladder. With the cost of buying a home putting pressure on household budgets, taking that first step can still feel increasingly difficult.
To help address this, the government has introduced the Your First Home scheme, a new initiative designed to help first-time buyers purchase new-build homes in England. With a minimum deposit of just 2.5% and a government-backed equity loan, it offers a more accessible way to take that first step onto the property ladder.
The October 2026 Budget confirmed £4.7 billion in funding for the scheme, with the first property sales expected from April 2027. With five years of interest-free borrowing and the opportunity to secure a suitable plot ahead of full applications opening, there are several reasons for prospective buyers to start exploring their options now.
There’s also an opportunity to get ahead of the launch with Beal Homes. The team is now accepting £150 fully refundable pre-registration payments on selected plots, allowing prospective buyers to secure their preferred home before the official scheme applications open.
What Is the Your First Home Scheme?
The Your First Home scheme is a government-backed equity loan designed to help first-time buyers purchase a new-build home in England when saving a traditional mortgage deposit has proved difficult.
With £4.7 billion in government funding, the scheme aims to help around 70,000 households onto the property ladder and support the delivery of approximately 20,000 new homes.
Eligible buyers will receive an equity loan worth 20% of the property’s purchase price, alongside a deposit of at least 2.5% and a mortgage from a participating lender. One of the biggest benefits is that the government loan is completely interest-free for the first five years, helping buyers manage the initial costs of owning their home.
How Does the Your First Home Scheme Work?
The Your First Home scheme combines a buyer’s deposit, a government-backed equity loan and a mortgage from a participating lender to fund a property purchase.
Under the confirmed arrangements, buyers will need a deposit of at least 2.5% of the purchase price, with a maximum deposit of 15%. The government will provide a 20% equity loan, with the buyer arranging a mortgage to cover the remaining amount.
For example, on a new-build property priced at £200,000, the funding could look something like this:
• Buyer’s Deposit Amount: £5,000 (2.5%)
• Government-backed Equity Loan Amount: £40,000 (20%)
• Mortgage Amount: £155,000 (77.5%)
This means you could secure a £200,000 home with just £5,000 towards your deposit, making the initial step into home ownership more achievable.
You’ll also own your home from the day you complete your purchase. The government won’t become a joint owner or your landlord. Instead, the equity loan provides additional support towards the purchase price, with a particularly attractive interest structure.
There is no interest to pay on the government loan for the first five years. In year six, interest is charged at 1.5%, rising to 3% from year seven. This gives buyers an initial period to settle into their new home without additional interest charges from the equity loan.
The loan itself is normally repaid when you sell your property, although you can repay some or all of it earlier. Repayments are linked to your home’s market value, so you’ll typically repay 20% of its value at the time of repayment. For example, if your £200,000 home increases in value to £240,000, your £40,000 original equity loan would become a £48,000 repayment. Equally, if its value fell to £180,000, the repayment would be £36,000.
What Could the Scheme Mean for Your Deposit?
One of the biggest advantages of Your First Home is the potential to reduce both the deposit you need to save and your monthly mortgage payments.
For example, on a £200,000 property, a 2.5% deposit would be just £5,000, compared with £10,000 for a standard 95% mortgage. That’s £5,000 less you need to save before getting started.
The government’s official guidance also provides an illustrative comparison of the monthly costs. Based on a £200,000 property, the monthly figures for a standard mortgage and a Your First Homes mortgage look something like this:
Period Standard | 95% Mortgage | Your First Home
Years 1–5: | £1,020 | £832
Year 6 | £1,020 | £882
From year 7 | £1,020 | £932
These figures assume a 30-year repayment mortgage at 5% interest. The standard mortgage example uses a 5% deposit, while Your First Home uses a 2.5% deposit and a £40,000 government equity loan. The figures include the mortgage payment and applicable equity loan interest, assuming no repayment of the equity loan during the periods shown.
This means that, under these illustrative assumptions, a buyer could pay approximately £188 less per month during the first five years, with an estimated saving of £138 in year six and £88 from year seven onwards.
Actual costs will depend on the mortgage rate offered, your financial circumstances and the property you buy. These are illustrative figures rather than a mortgage quote and exclude other home-buying and ownership costs.
Who Could Qualify for the Your First Home Scheme?
Your First Home is designed for first-time buyers in England who would struggle to purchase a residential property without assistance.
Under the published guidance, buyers will normally need to:
• Be a first-time buyer.
• Purchase an eligible new-build home in England within the applicable local property price cap.
• Use the property as their main home.
• Have a household income of £110,000 or less outside London, or £140,000 or less within London.
• Be able to obtain a repayment mortgage from a participating lender.
Meeting the income requirements alone does not guarantee eligibility or mortgage approval. Buyers will need to satisfy the full scheme criteria and the lender’s affordability and credit checks.
Will There Be Local Qualifying Criteria for the Your First Home Scheme?
Yes. The government has confirmed that property price caps will vary by local authority, based on local median property prices. This is intended to ensure the scheme supports buyers looking for homes that fall within the relevant area’s price range.
London has separate price caps of £650,000 for Inner London and £500,000 for Outer London. The remaining local authority price caps are still to be published, including those relevant to Hull, the East Riding of Yorkshire and Lincolnshire.
In the meantime, Beal Homes is already accepting £150 fully refundable pre-registration payments on selected plots priced under £250,000 in Hull and East Yorkshire, and under £300,000 in Lincolnshire. This gives prospective buyers an opportunity to secure a suitable plot now, rather than waiting for the official scheme launch.
These are Beal Homes’ current qualifying plot-price limits for its pre-registration offer, rather than the government’s final local authority price caps. The team will keep registered customers informed as soon as the official figures are announced.
Interested in securing your new home? Contact Beal Homes to find out more about available plots and pre-registration.
When Will the Your First Home Scheme Launch?
The government has confirmed the following key dates for the scheme:
• By the end of December 2026: Customer pre-registration and guidance are expected to open, alongside the first developer registrations.
• February 2027: Full customer applications are expected to open.
• April 2027: The first property sales under the scheme are expected to take place.
However, you don’t necessarily need to wait until December or February to secure your preferred new-build home. Beal Homes is already accepting pre-registrations on selected plots, giving customers the opportunity to get ahead of the queue and secure a suitable home now.
For a fully refundable payment of £150, buyers can pre-register on qualifying plots priced under £250,000 in Hull and East Yorkshire, or under £300,000 in Lincolnshire.
This means you can start planning your move and secure your preferred plot ahead of the government’s full application process.
Beal’s pre-registration process is separate from the government’s customer pre-registration, which is expected to open by the end of December. Customers will still need to complete the official application process from February 2027 and meet the scheme’s eligibility and mortgage requirements before their purchase can proceed.
With limited qualifying plots available, pre-registering now could be a great way to get ahead and avoid waiting until the official application window opens.
How Can First-Time Buyers Prepare Now?
Although full applications are not yet open, there are practical steps prospective buyers can take in the meantime.
The best way to get ready is to start exploring your options now. Review your finances, consider what you could comfortably afford each month and speak to a mortgage adviser about your borrowing options.
You can also browse Beal Homes’ current developments to find a location and property that suits your needs. With £150 fully refundable pre-registrations now available on selected plots, there’s an opportunity to secure your preferred home ahead of the official scheme launch.
What Should Buyers Check Before Applying?
The government has published its initial guidance for Your First Home, but some practical details are still to come before applications open. These include minimum repayment amounts, valuation requirements, applicable fees and the arrangements for selling or remortgaging a property.
Buyers should also check whether their chosen home and developer qualify and understand how equity-loan interest and repayments could affect their finances over time.
What Other Help for Buyers Does Beal Homes Offer?
While applications for Your First Home are not yet open, Beal Homes already offers a range of support to help buyers move into a new home. Depending on your circumstances and the property you’re interested in, options include:
• Launch Pad: Designed for first-time buyers, this scheme offers up to £5,000 towards upgrades and extras in our state-of-the-art Design Lounge, plus an extra £1,000 towards legal fees on select homes.
• Key Workers scheme: Eligible key workers could receive up to 5% towards their deposit, worth up to £12,500.
• Smooth Move: If you’re selling your current home to buy a new Beal property, Smooth Move can help manage the process, including arranging valuation and covering estate agent fees.
• Part Exchange: If you’re looking to move home without the uncertainty of a property chain, Beal’s Part Exchange scheme offers a simpler alternative. Subject to suitability, Beal can make an offer on your existing property, helping you plan your move with greater certainty.
Final Thoughts
The Your First Home scheme could offer a new route onto the property ladder, with a minimum deposit of 2.5%, a government-backed equity loan and an initial five-year interest-free period.
With pre-registration opening by the end of December 2026, now is the time to start exploring your options.
Register your interest with Beal Homes to receive updates on local property price caps for Hull, East Yorkshire and Lincolnshire, and find out how you could secure your preferred plot ahead of full scheme applications opening in February.