The Government’s proposed ‘Your First Home’ scheme addresses a problem we hear about again and again: people who can afford the monthly mortgage repayments but cannot save a large deposit while paying the rent.
(It) can bring ownership closer to families without the help of a mom and dad bank.
It can also help in building houses. Developers need to have confidence that buyers will be there when the development is completed.
We welcome the government’s expectation that participating developers will contribute to the costs of the programme. It is only fair that the industry that benefits from increased sales should help pay for it.
But the size of this contribution, the total cost of the scheme, and the government’s financial exposure have not yet been published.
What we can learn from Help to Buy
As with the Help to Buy program before it, the Your First Home program highlights the promise and risks associated with equity loans.
that An independent evaluation commissioned by the Ministry of Housing, Communities and Local Government It found that 46% of customers said they couldn’t have bought a home without it.
The evaluation also found that the scheme had increased housing supply, with developers reporting that strong demand gave them confidence to build.
But the same evaluation found that Help to Buy customers paid about 1% more than buyers of similar new releases. New builds themselves cost around 5.5% more than similar existing homes over the period studied, with a new build premium of around 8-9% in London.
Part of the assessment, which compares areas near the border between England and Wales, estimates that the Help to Buy program has raised overall house prices there by about 2%. The broader price impact is less certain, but the warning is clear: government support should not become an excuse to charge buyers higher fees.
The mortgage environment has also changed. the Bank of England records It showed that the bank rate was 0.1% for most of 2021; It was fixed at 3.75% in September 2026. The bank rate is not the mortgage rate a buyer pays, but it underscores why affordability should be tested using today’s borrowing costs.
A smaller deposit doesn’t do much good if your monthly mortgage payment is out of reach.
Will he succeed in London?
London is a particularly difficult test. The previous Help to Buy program offered a loan of up to 40% of equity; The new proposal is 20%.
according to HM Land Registry House Price Index July 2026The average first-time buyer in London paid around £467,000. At this price, a 2.5% deposit would be worth around £11,700, but the buyer would still need a mortgage of around £362,000.
With an illustrative borrowing limit of 4.5 times income, this mortgage would require a household income of about 4.5 times income. £80,000before the lender takes into account other liabilities or apartment service fees. A deposit is only one part of the affordability problem.
We don’t yet know the proposed household income or local property price caps. If set too low, Londoners may qualify for the scheme but not be able to buy a qualifying home – or buy a home but be excluded by the income cap.
The government should test the caps against actual local prices for new construction and mortgage lending limits. It should also take into account whether London needs higher equity lending, weighing this against the risks of raising prices.
There is an additional risk for buyers of newly built apartments who make very small deposits. HM Land Registry’s July index shows this Prices for apartments and flats in London fell by 6.6% compared to the previous yearThis compares to a decline of 3.3% across all properties in London. A modest drop in value can wipe out the buyer’s small initial stake. High or increasing service charges, building safety concerns and onerous rental terms can make it more difficult to afford, remortgage or sell an apartment.
Helping people buy apartments while leaving rental problems unresolved would be short-sighted. We welcome the commitment to introduce the Common Tenancy and Tenancy Reform Bill before Christmas, including powers to cap management fees and excessive permissions.
Advice for buyers considering your first home
First-time buyers should explore your “first home,” but they shouldn’t assume it’s their only path to ownership — or that they can’t buy until it’s released. There are more mortgage options than many people realize, including 100% mortgages for qualified renters and family-backed mortgages that allow parents to use their savings as collateral without parting with money. Eligibility and costs vary, so talk to a mortgage advisor before ruling yourself out.
Ask an advisor to show you the total cost of each route, including what you’ll pay after any interest-free period ends. Budget for service fees, insurance, maintenance and transportation costs. Before purchasing an apartment, ask your conveyancer to check the lease, service charge accounts, planned major works and building safety information. Low deposits only help if it’s a home 
It is still affordable and salable.
Paula is the CEO and founder Homeowners AllianceOne of the most famous real estate consultancy sites in Britain. The organization exists to restore confidence in homeownership by campaigning for policies and industry practices that offer a better deal for homeowners and aspiring owners.
