UK unveils 'Your First Home' scheme with 2.5% deposit and 20% equity loan

The UK government plans to revive a Help to Buy-style assistance package, called "Your First Home," which will be detailed in the October 28 Budget. Under the scheme, qualifying first-time buyers can acquire a new-build home by providing a deposit of only 2.5% of the purchase price, while the state offers an equity loan of up to 20% that remains interest-free for the first five years. The buyer would then secure a mortgage for the remaining 75% of the property's market value.

The program applies to new-build properties valued at £600,000 or less and includes household-income and local price caps to focus support on those most in need. Participating developers are expected to make a financial contribution toward the scheme's costs. The equity loan must be repaid in full when the property is sold, within 25 years, or in line with the mortgage repayment schedule. The policy aims to lower the deposit barrier for first-time owners and stimulate demand for newly constructed homes, bolstering the construction sector.