Could the new first-time buyer scheme make buying more achievable?

For many aspiring homeowners, getting onto the property ladder isn’t necessarily being held back by a lack of desire to buy. Instead, one of the biggest challenges continues to be saving a large enough deposit while also dealing with rent and everyday living costs. That makes the government’s newly announced Your First Home scheme particularly relevant as we head into October 2026.

Announced on 26 September and expected to be confirmed at the October Budget, the proposed scheme is designed to reduce the amount some first-time buyers need to save before purchasing a new-build property in England. Under the plans announced so far, eligible buyers would contribute a deposit of just 2.5%, with a government-backed equity loan potentially covering up to 20% of the property’s value.

That could make a considerable difference. On a £250,000 property, for example, a 2.5% deposit would be £6,250, compared with £12,500 for a 5% deposit or £25,000 for a 10% deposit. For someone already saving but struggling to close that gap, the proposed scheme could potentially bring their buying plans forward.

There is, however, an important word in all of this: proposed. The scheme isn’t yet something buyers can apply for, and several significant details are still to be confirmed. The government has said that household income limits and local property price caps are expected to apply, while further information about costs, eligibility and the timetable for launching the scheme is expected alongside the Budget.

That means first-time buyers shouldn’t put their existing plans on hold solely because of the announcement. Instead, this is a useful moment to understand what you can afford under today’s conditions, while keeping an eye on whether the new scheme could provide another option.

Affordability is still shaping buying decisions

The announcement comes at an interesting point in the property market. Recent Zoopla research suggests that higher mortgage rates have reduced buyer purchasing power by around 9% since January, with the portal estimating that the average mortgage-funded buyer would need around £18,200 more towards their deposit to maintain the same monthly mortgage repayments.

That helps explain why deposit assistance could be valuable, but buyers should remember that reducing the initial deposit doesn’t remove the need to think carefully about monthly affordability. The amount you borrow, the interest rate available to you, the length of the mortgage and your wider household expenditure will all influence whether a particular property is comfortably affordable.

Speaking to a mortgage adviser before starting your search can therefore be particularly useful. Rather than working from an online estimate or headline mortgage rate, you can get a clearer understanding of what you could realistically borrow and what your repayments might look like.

There are also reasons for buyers to explore the market now

While affordability remains a challenge, buyers entering the autumn market are benefiting from greater choice. Zoopla’s latest figures show that property searches are 7% higher than a year ago, while the number of homes available for sale is around 5% higher.

More choice can be positive for buyers. Instead of feeling pressure to pursue the first suitable property that becomes available, you may have greater scope to compare homes, areas, asking prices and overall value.

The proposed Your First Home scheme will be focused on eligible new-build properties, so it also won’t necessarily be the right route for every first-time buyer. If your ideal first home is an older property, for example, the wider market and conventional mortgage options may remain more relevant.

What should first-time buyers do this October?

The most useful step is to prepare rather than wait. Review your savings, understand your credit position, speak to a mortgage professional about affordability and start building a realistic picture of what your budget can achieve. When the final Your First Home details are published, you’ll then be in a much better position to compare the scheme with the options already available to you.

Buying your first home is a major financial decision, and no government scheme changes the importance of finding a property and mortgage that work for your circumstances over the long term. But for buyers who have found the deposit to be the biggest obstacle, October’s Budget could bring an important new route to consider.

If you’re looking to move in the next 6 to 12 months and want to stay local, reach out to us and we can send you a link to our Heads Up Property Alerts, giving you early access to homes before they hit the market.